Understanding Workforce Flow to identify the right people issue

It is common knowledge today that the world is going through big changes on so many levels and it is only getting faster. The ongoing industrial revolution is clear evidence of this. Each iteration of the revolution has rendered entire industries and job families obsoelete while creating new industries and jobs along the way. The most recent revolutions (Industry 5.0) will be built on data and technology; but organizations and the world are operating across Industry 3.0 - 5.0, where most are now operating on Industry 4.0.

As organizations are busy adapting to these changes to build their respective competitive advantages, their success will depend on how well they manage their most valuable and scarce human capital through this transition. Human capital with the right data skills are scrace and highly sought after in the labour market; which makes them expensive to hire and even harder to keep. To a large extent, most organizations will have to rely on their existing workforce; some of whom may already have the skills, some have the aptitude to pick up new ones, some will require some hard work and finally, some may not want to or be able to pick up the requisite skills to remain relevant for the impending changes. While managing through these changes, organizations still need to keep the busines running.

That is a very tall order for HR. HR will need to build capabilities to quickly understand the state of the entire workforce, identify the right people issue and develop the right intervention when needed. Workforce analytics can help, but only if the data is organized and presented to HR in an intuitive fashion to facilitate practical analysis.

Workforce Flow Framework

The Workforce Analytics landscape is busy, with disparate frameworks and tools to understand talent attraction, turnover, talent development and even the employee experience. However, each of these approaches typically show one aspects in the employee lifecycle and at a point in time; which presents some challenges:

Local Optimization, Global Suboptimization - By seeing only one aspect in the employee lifecycle, HR can only diagnose issues and present solutions in that one area and potentially miss the root cause.
"Skate to where the puck is going to be, not where it has been" - Wayne Gretzky. - Many workforce analytics frameworks consider the workforce at a point in time. But workforce are not static in nature, they are dynamic. Human Capital flows through organizations.

The workforce flow framework is designed to illustrate the human capital dynamics across the entire employee life cycle.

Business needs drive new workforce requirements; which results in vacant positions
When HR fills the vacancies, the candidates join the organization as new hires, where they would be onboarded and trained for the new role
When new hires acquire enough skills and productivity, they can contribute effectively to organization outcomes in the main workforce. And in return, they get paid, engaged, trained....
And some get promoted
For various reasons, some employee leave the organization. This could include resignations, terminations or retirements etc.

In this simple framework, HR is able to see the roles that the various functions play along the value chain (e.g. Talent acquisition clearly impacts vacancies and new hires; C&B, L&D, OD impact the general workforce etc.). In similar fashion, business leaders, who may not be familiar with HR terms, also find the framework easy to relate to. They are able to vey quickly figure out if the organization would have enough people to get the work done.

The framework is basically made up of 5 metrics; vacancies, new hires, workforce, promotions and exits. While each metric is informative by itself, the power of the framework comes when data is organized around it and when HR considers all 5 metrics in their analysis.

Workforce Flow Powered by Data

The workforce flow framework can be easily powered by commonly available HR data; such as number of open positions, number of new hires, workforce size, number of exits and number of promotions. Thus, almost any organization can assemble their own workforce flow diagram. But it doesn't stop there, when the data is organized as follows, organizations is now able to visualize employee movements in, out and up through the organization.

By visualizing the workforce dynamics, a few observations would be quickly apparent:

The shape of the organization; top-heavy, bottom heavy, diamond or rectangle. And each shape presents different cost, management, agility and productivity advantages and disadvantages.
Where talent loss is occuring; talent loss at top management and at the bottom clearly present different concerns and challenges for the organization.
Where the organization is unable to attract talent; at the top, middle or at the bottom?

Gleaning insights from Workforce Flow

The power of the framework comes from the insights gained from considering several metrics together and the questions the arise from them. For example,

If many exits are observed as well as low promotios at the same level in the organization, there might be a question if the low promotion rates could be a driver for turnover; as opposed to what the exit interviews say.
An orgnization may be to fill vacancies and are asking for talent acquisition for a plan to reduce their time to fill at a certain level. However, the same level appears to also have high number of exits. Perhaps it isn't a problem that talent acqusition to fix; the real issue might be retention instead.

But it is hard to tell with a cheat sheet for reading the workforce flow map.

With reference to the slide above, the workforce flow map can help HR

Identify a host of people issues and whichs ones should be prioty
The specific groups and levels that the people issues are impacting
The right questions to ask

The biggest challenge for Workforce Analytics is usually the ability to ask the right question and how to scope it for analytics. Insights from the workforce flow framework sets HR up for Workforce Analytics success.

Next steps

The workforce flow framework provides a practical and accessible way to organize HR Data to facilitate an assessment of state of the workforce across the employee life cycle. The data requirements are very simple and most of the required data fields are available for more organizations large and small. With the right training, most HR professionals can leverage it to help their organizations better manage their own human capital risks.

If you are interested to find out more about the workforce flow framework, you can contact FYT Consulting here. If you're interested in learning how to build your own interactive workforce flow tool, you can check out our upcoming workshops here.