Technology vital to realizing Total Workforce Optimization
Posted August 6, 2020
By Vance Tiller
Total Workforce Optimization (TWO) describes a blended approach to viewing the employees and non-employees of an organization. Assessing the current state, available data, business reality and a vision of expected outcomes outline the elements required to achieve an optimized workforce. The right blend of “hi-tech and hi-touch” lead to fully realized potential results.
Achieving an optimized workforce does not have to be complicated.
Talent Pursuit – What do we need, when do we need them and where will we source them?
Talent Onboarding – How do we make the hiring process employee-centric and easy to do?
Talent Management – Why does each person matter to the organization and how do we convey that?
Total Workforce: All employed and non-employed contributors to enterprise success.
Optimization: A strategic initiative to determine the best mix of the total workforce to achieve the greatest productivity for the optimal cost.
Attract: Are we reaching enough potential candidates?
Select: Are we choosing the right talent?
Onboard: Is the experience candidate friendly?
Pay: Is it on time, accurate and accessible?
Manage: Are we maximizing performance through training and development of our talent?
Retain: Are we optimizing retention? (Reducing voluntary turnover?)
Offboard: Are we professionally completing engagements such that we gain positive brand imaging?
Report: Does the data support what we perceive?
Every journey starts with a vision of the future. Gathering available data to understand the starting point is the first step toward Total Workforce Optimization. A thorough gap analysis based on data will set the stage based on reality.
Organizations do not always understand their workforce. Remarkably, less than half understand the motivations, skills and productivity of the workforce. Some are uncertain how many workers they have, the number of open positions, tenure, or total labor costs.
Getting every data point in one place is essential. Each organization has a formal or informal system. It may be a HRIS that is deep and rich with data, or it may be a spreadsheet on a desktop or server. The goal is to gather the data and validate it, then put it in one place. Many organizations believe they have strong insight into their workforce. Data either confirms or conflicts with perceptions. We seek to learn:
Who is doing what? Where? Why? When? And at what cost?
Where is the decision point on changing the workforce mix?
How is the decision made to add or change the workforce mix and number?
Does our workforce have the makeup to achieve our goals?
Is our workforce aligned for maximum efficiency and economic value?
Technology provides valid data to help define the potential ROI for a TWO effort.
Unmotivated talent is a dilemma facing many organizations. Only a small portion make significant efforts to motivate their non-employed workers. A slightly larger portion try hard to motivate their employed workers. Many employers state the desire to motivate employees but remain indifferent about the non-employed workforce.
Why? How? Who?
The typical organization has limited bandwidth in human resources. Engaging and motivating the employed workforce is a central objective of the human resource professional. The non-employed workforce is isolated and disconnected unless there is a direct focus and link to them. If this link is missing or ineffective, turnover and safety suffer costing the organization time and money.
Embarking on the Total Workforce Optimization course requires comprehensive delineation of responsibility for each element of the workforce. Any gaps in this critical step will result in deterioration of the outcomes and failure. Turnover in temporary employees is nearly always the highest in the workforce. It is not surprising that this group is generally the most detached from the core initiatives of the enterprise.
Alignment to purpose is a vital piece of optimization. This requires a hi-touch approach with key measurement of engagement throughout the employment lifecycle.
A stunning data point from a recent webinar by Gartner Group, a well-respected consulting firm, supports the need for hi-touch and connected employee experiences.
They framed it like this: How employees internalize and interpret the interactions they have with and within the organization and the contexts that influence those interactions – and the impact on business outcomes.
Culture – the set of behavioral norms and unwritten rules that shape how individuals get work done within their experience.
EVP – Employee Value Proposition – the perceived value they will experience from their experience.
Engagement – the level of discretionary effort and intent to stay with the organization given their experience.
Of the almost 3,000 employees surveyed, 87% were not fully satisfied with their experience!
Think about the effect on business outcomes impacted by dissatisfied employees. It is significant, to say the least! Gartner's study pointed out organizations whose employees are fully satisfied are:
48% more likely to meet organizational customer satisfaction goals
89% more likely to meet organizational innovation goals
56% more likely to meet organizational reputation goals
You do not have to be a wizard to realize the opposite effect if employees are NOT fully satisfied. The damage to the brand's reputation is compelling enough, but the other impacts are just as concerning.
Satisfied employees stay longer, report higher discretionary effort, and are more likely to be a high performer. Isn't that the goal of business as related to the workforce? It is all about the people, right?
The American Staffing Association has tracked temporary employee tenure for 20 years. The high-water mark was 14.3 weeks in 2013. The low was 9.7 in 2000. For the last four years from 2016 the average has been 10 to 11.5 weeks.
Temporary employment is a great strategic tool in Total Workforce Optimization. Understanding where it fits in the overall workforce mix is critical. Expectations should be based on reality and clear insights on what output is expected from this group, as well as what risks and challenges may exist.
Entertaining a “Temp-to-Hire” or Evaluation Hire talent acquisition approach is effective, if consistent and realistic. This strategy becomes ineffective if temp-to-hire becomes temp forever. Forward thinking employers recognize this risk and work to build a culture of positive employee experiences. Building a brand reputation that is positive among all workers, employed and non-employed, is essential.
The communication undercurrent runs deep in hourly wage earners. A strong grapevine exists and is trusted by the peer group. Bad news travels far and wide. If unacceptable turnover is a theme in your organization, check the employee experience sub-culture on the front line.
Total labor costs are seldom calculated accurately
The U.S. Bureau of Labor Statistics is full of useful information. The chart below shows that the U.S. average cost of benefits per hourly employee is 28%. Most employers know better. The actual labor burden carry cost includes training, recruiting, hiring, offboarding, administrative and workers compensation costs that are rarely factored properly into the equation.
Having the right assessment of the workforce on a job-to-job basis is a critical data point to determine true ROI for an effective Total Workforce Optimization effort. A thorough review of the true labor burden carry costs for your organization should be completed. Using an average carry cost for the entire company can result in a skewed view of what the lower-paid hourly workforce truly costs to employ. Keep in mind that many costs are soft costs often missed in the calculation. Do not forget about hiring costs, training costs and lost productive time due to breaks and absenteeism. An effective labor burden calculator is very helpful in this endeavor.
Employers struggle to prioritize the challenge
It was once said, “If you don’t know where you are going, any road will take you there.” Wise words and true when employers begin to face workforce challenges. Organizations vary greatly when it comes to picking their top talent priority. Among the top priorities are:
Accessing and retaining key skills
Improving workforce flexibility and agility
Improving workforce productivity
Reducing labor costs and risk mitigation
As if it were not difficult enough before, now organizations must navigate pandemics and a “new-normal” on all fronts. While a new normal is a subjective, a perception now exists. How does your organization prioritize the new employee experience? Regardless of the source, the reality is that the world changed. In the spirit of innovation successful companies will adapt, collaborate, and lead the workforce to optimal outcomes.
The workforce design that delivered results in the past will not be enough to reach your future goals. Unorthodox and creative models will begin to develop as workers’ expectations continue to escalate. What was important to previous generations may not motivate the workforce of today. Understanding the needs of employees is the first step in adopting the workplace culture needed to sustain the organization into the future.
Total Workforce Optimization should not be a scary thought. Taking the first step should not make an organization nervous or fearful. There really is nothing to lose. Gaining insight on perhaps the most essential element of the business, its workforce, is extremely valuable.
Take a moment to reflect on your current reality and consider the options. There is technology available to support the migration to Total Workforce Optimization. There is proven methodology to support the humanization of the endeavor. Today is the day to push the start button and activate the start sequence.
Checklist for Total Workforce Optimization
Cast a vision of what you believe needs to be achieved.
Gain executive sponsorship and state the imperative.
Remove silos and engage leadership from all stakeholders (HR, Purchasing, Finance, Operations).
Understand the gap and provide insight into the “what’s needed” to optimize.
Complete business case with compelling data and support for the return on effort.
Pilot smaller groups if necessary, to obtain quick wins and proof of concept.
Identify expert partners to support you with analytics, credible experience, and proven best practices.
Report and track the data candidly and frequently – measure the progress.
Prepare to scale after proof of success is realized.
About the author
There is a TV commercial where the actor says, "We know a thing or two 'cause we've seen a thing or two." Vance Tiller says that describes his career perfectly. Having started a staffing career in 1986, somewhat by accident, he made $7 an hour answering the phone in a branch office of an international staffing company. Staffing is a great industry If helping solve problems is in your DNA!
Over his career, Tiller has led sales and business development teams, been the managing partner in a real estate development firm, led due diligence teams in mergers and acquisitions for a global software firm, has owned his own business and served on nonprofit and trade association’s boards of directors.
A native Texan, Tiller is a graduate of Stephen F. Austin State University in Nacogdoches, Texas. He holds an active real estate broker license in North Carolina, and is a Certified Staffing Professional (CPC) and Certified Search Consultant (CSC) as designated by the American Staffing Association, and serves on the Board of Governors of the Southern Textile Association. He currently serves as executive vice president of sales at Impact Workforce Solutions.
Tiller and his wife Vicki live in Charlotte, N.C., where they enjoy time with their new granddaughter and three dogs.