The Risky Business of HCM: Capacity

talent riskThis second blog in my series on talent risk focuses on capacity risk – an organization’s ability to put the right succession and talent acquisition plans in place to ensure enough volume of talent to support business strategy. (Use this link to check out our list of the top five global talent risks, based on data from over 1200 global organizations)

Capacity risk is all about ensuring that there is a big enough pipeline of talent – at all levels of the organization – to ensure that organizations can get the employees they need to meet their short-term and long-term needs.

Workforce management practices such as absence management can help organizations meet near-term capacity needs. Absences can create big problems, not only with compliance and ensuring the correct documentation and implementation of the right leave policies, but also with customer and employee engagement. Many organizations simply have managers or co-workers fill in during a leave of absence, but this can impact other work, make top performers feel put-upon for having to cover for others, or leave customers without the support they require. Strong absence management solutions and practices can help organizations better plan for absences and ensure continuity through short-term absences on longer-term leaves.

Capacity risk also speaks to the long-term talent pipeline. In several of the conferences I have been to in the past few weeks, succession was a hot topic. Organizations are struggling to ensure that they have a strong talent pipeline not only for executive roles, but for all critical roles. But what do we mean by critical roles? Organizations need to have a strong process for identifying critical roles and critical talent, and workforce data plays a huge role in that. By understanding what roles are involved in driving revenue, customer satisfaction, and other key business metrics, organizations can narrow the list of critical roles where they focus their succession and recruitment efforts. It requires too much time and money to simply take a peanut butter approach to succession or recruiting – spreading your investment evenly across all roles. Organizations need to combine workforce and business data to understand where they really should be spending their time, and which roles are mission-critical.

Here’s one excellent example, told at a recent conference by the chief recruiter for a chain of walk-in health clinics. The organization’s business plan included opening four new clinics in a large Midwestern city. To open each clinic, the most critical role is the nurse practitioner, with each clinic requiring 6 to 8 on staff in order to open. But in looking at the external demographic data, compensation information, and the level of skill and cultural fit required for nurse practitioners to be successful in their organization, they quickly realized that the supply of talent in that area was inadequate for one new clinic, let alone four.

Business plans made in the absence of the right capacity data will not be successful. But organizations that use workforce and talent data to understand their critical roles, and use them to guide their succession recruiting efforts, will be able to manage capacity risk and make better business decisions. In this case, the clinic was able to stop its plans before making significant investment, and re-think the clinic location based on the right capacity data.

I have often repeated the mantra “no business plan without a talent plan” and when it comes to planning for capacity, organizations must manage this risk in order to ensure their business plans don’t fall flat.

Mollie Lombardi, VP and Principal Analyst,
Workforce Management, Brandon Hall Group

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Mollie Lombardi