Sorry for my absence from the blog. Lots of projects and lots of travel lately...
I wanted to talk a bit about workforce planning and the role it can play in contingency planning. I know have talked a little bit about this in the past. Lately I have been asked about modeling everything from the economic impact of new conflicts in the Middle East to the impact of potential labor actions on the ability to continue operations. While the workforce is not the only factor that plays into these scenarios, it is an important element.
To do effective contingency planning, it is important to have a baseline workforce plan for the current operations. This plan needs to be more that just straight line projections, however. You really need to have the full view of processes, skills, outputs, hours, etc. that I have discussed in the "Techniques That Make a Difference" posts. In a contingency situation, you need maximum flexibility from your workforce and you need to understand the potential for redeployment of resources. Not only who can be redeployed and to where based on their skills, but what things will not happen in the case of those redeployments (i. e. what won't get done) and what are the impacts of this on the organization's overall metrics. This data allows decision-makers to see what the ideal redeployment approach might be and how long it can be sustained. It also allows decision makers to plan for prolonged response needs such as what happened with Hurricane Katrina. In those cases, decision makers may want to examine potential rotations of response staff based both on evolving needs and on the need to rotate staff back to their normal jobs. For example, you may be able to redeploy procurement specialists to the response effort for several weeks, but past that point the normal responsibilities of the agency in this area are compromised. How long can the agency afford to shift those staff to the response effort for? Past a certain point, the agency may need to look at a contingent workforce to either relieve those in the response zone or to cover its day-to-day work while the response effort continues. Good workforce planning can tell decision makers which option is the right one based on cost, efficiency, etc.
But to be clear, I am not just talking about some kind of natural disaster. There are a number of potential events for which a company might want to have this type of plan including:
- Labor Dispute / Action
- Supply Disruption
- Economic Crisis
- Pandemic or other Health-Related Event
- Power Outage
- Terrorist Attack
This is just a brief list - there are many potential issues. For global businesses they have to look at the potential for disruption in one country and how you might use your workforce from elsewhere to respond. And certainly the events of the past year alone illustrate the potential. Just look at the long-term impact that the Japanese earthquake has had on their economy and on the global supply of a number of goods.
Another facet that needs to be considered in this type of model is the potential for staff or contingent labor to be unavailable. Not necessarily because they are injured or such, but they could potentially be without transportation or something could have happened to their home / family that makes them unable to get to work or work a normal schedule. Your contingent labor could be in a similar situation. So what will your plans be if 10% of your workforce is unavailable? 20%? 30%? How would you redeploy resources and what would be impacted? How long could you survive? Will you need to deploy financial or other resources to assist your workers?
Yet another factor to analyze is the impact of stress, etc. on the productivity of your workers. As we have discussed before, if there is a reduction in productivity, you can't assume the same level of output from your existing workforce. How will that impact your performance and what resources will you deploy to address this? Will prolonged work in responding to a disruption further reduce the productivity of your workers and what impact will that have? How do you mitigate these dynamics?
Certainly this type of planning is among the most complex and it involves a lot of judgment calls. There are numerous variables to consider and many unknowns. It also requires a thoughtful approach to determining what kinds of disruptions an organization can potentially face and what the appropriate responses are. I mentioned some of these above but each business needs to look at its operations and locations to determine the potential issues. But the value that come from being able to perform and respond when others can't is tremendous. And even the fact that the organization has a plan that is deliberate and communicated helps reduce the stress in the event of a disruption and helps the people respond more effectively.
That is not to say that organizations have not just "made it work" in terms of their response strategies in terms of some sort of disruption like a natural disaster or a labor dispute. But in my experience, the toll on the organization both in terms of its performance and its people goes well beyond the disruption itself. Having a plan helps ensure that the organization maximizes its ability to respond while minimizing the damage done to its operations and its people.
Brian E. Wilkerson
Revolution Advisors
(303) 926-5278
bwilkerson@revolution-advisors.com
I wanted to talk a bit about workforce planning and the role it can play in contingency planning. I know have talked a little bit about this in the past. Lately I have been asked about modeling everything from the economic impact of new conflicts in the Middle East to the impact of potential labor actions on the ability to continue operations. While the workforce is not the only factor that plays into these scenarios, it is an important element.
To do effective contingency planning, it is important to have a baseline workforce plan for the current operations. This plan needs to be more that just straight line projections, however. You really need to have the full view of processes, skills, outputs, hours, etc. that I have discussed in the "Techniques That Make a Difference" posts. In a contingency situation, you need maximum flexibility from your workforce and you need to understand the potential for redeployment of resources. Not only who can be redeployed and to where based on their skills, but what things will not happen in the case of those redeployments (i. e. what won't get done) and what are the impacts of this on the organization's overall metrics. This data allows decision-makers to see what the ideal redeployment approach might be and how long it can be sustained. It also allows decision makers to plan for prolonged response needs such as what happened with Hurricane Katrina. In those cases, decision makers may want to examine potential rotations of response staff based both on evolving needs and on the need to rotate staff back to their normal jobs. For example, you may be able to redeploy procurement specialists to the response effort for several weeks, but past that point the normal responsibilities of the agency in this area are compromised. How long can the agency afford to shift those staff to the response effort for? Past a certain point, the agency may need to look at a contingent workforce to either relieve those in the response zone or to cover its day-to-day work while the response effort continues. Good workforce planning can tell decision makers which option is the right one based on cost, efficiency, etc.
But to be clear, I am not just talking about some kind of natural disaster. There are a number of potential events for which a company might want to have this type of plan including:
- Labor Dispute / Action
- Supply Disruption
- Economic Crisis
- Pandemic or other Health-Related Event
- Power Outage
- Terrorist Attack
This is just a brief list - there are many potential issues. For global businesses they have to look at the potential for disruption in one country and how you might use your workforce from elsewhere to respond. And certainly the events of the past year alone illustrate the potential. Just look at the long-term impact that the Japanese earthquake has had on their economy and on the global supply of a number of goods.
Another facet that needs to be considered in this type of model is the potential for staff or contingent labor to be unavailable. Not necessarily because they are injured or such, but they could potentially be without transportation or something could have happened to their home / family that makes them unable to get to work or work a normal schedule. Your contingent labor could be in a similar situation. So what will your plans be if 10% of your workforce is unavailable? 20%? 30%? How would you redeploy resources and what would be impacted? How long could you survive? Will you need to deploy financial or other resources to assist your workers?
Yet another factor to analyze is the impact of stress, etc. on the productivity of your workers. As we have discussed before, if there is a reduction in productivity, you can't assume the same level of output from your existing workforce. How will that impact your performance and what resources will you deploy to address this? Will prolonged work in responding to a disruption further reduce the productivity of your workers and what impact will that have? How do you mitigate these dynamics?
Certainly this type of planning is among the most complex and it involves a lot of judgment calls. There are numerous variables to consider and many unknowns. It also requires a thoughtful approach to determining what kinds of disruptions an organization can potentially face and what the appropriate responses are. I mentioned some of these above but each business needs to look at its operations and locations to determine the potential issues. But the value that come from being able to perform and respond when others can't is tremendous. And even the fact that the organization has a plan that is deliberate and communicated helps reduce the stress in the event of a disruption and helps the people respond more effectively.
That is not to say that organizations have not just "made it work" in terms of their response strategies in terms of some sort of disruption like a natural disaster or a labor dispute. But in my experience, the toll on the organization both in terms of its performance and its people goes well beyond the disruption itself. Having a plan helps ensure that the organization maximizes its ability to respond while minimizing the damage done to its operations and its people.
Brian E. Wilkerson
Revolution Advisors
(303) 926-5278
bwilkerson@revolution-advisors.com
