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A House Divided: The State of Strategic Workforce Planning

While employers know that there is a tough road ahead for employee training and Strategic Workforce Planning, they can’t agree on what that path looks like, according to a recent study commissioned by the ADP Research Institute®andconducted by The Economist Intelligence Unit® (EIU). The study, Strategic Drift: How HR Plans for Change, sources responses from corporate leaders on the current state of the workforce and the main issues they face as they plan their overall HR strategy.

What concerns employers most?


According to ADP’s Workforce Vitality Report jobs holders’ wages grew by 4.3 percent year over year for the third quarter of 2016. This is a sign that employers want to retain their workers and are increasing wages in order to do so.

However, employers know that wage increases aren’t enough and they are still concerned about turnover. Seventy-three percent believe that higher turnover rates and shorter tenure will be the “new normal”. That is especially true as Millennials have become the largest segment of the workforce. Seventy-five percent of respondents expect to see high turnover in the next three years among younger workers as they become a bigger share of total employees. This will have an effect on the overall labor market, with 76 percent of employers agreeing that the market for skilled workers will only continue to tighten.

Do employers know the path forward?

According to the report, companies are divided on how to solve the growing skills gap and curb turnover. Twenty-eight percent of respondents cite recruiting highly-skilled employees as their top concern, while 25 percent say it is retaining experienced employees and 24 percent say their top concern is to simply manage employee turnover.

While more than three quarters of respondents consider Strategic Workforce Planning (SWP) the greatest challenge for their company, there is a nearly even split as to what this term actually means. Thirty-six percent say that SWP is about retaining key people to avoid skills gaps, 33 percent say it is understanding what talent will be required in the future and how to find it, and another 33 percent believe it is recruiting new qualified people to plug existing skills gaps.

Additionally, not only is there no clear definition or prescription for the path forward, companies cannot even agree on who owns the process. Forty-two percent say it lies with the CEO and board of directors, while 28 percent believe it is the responsibility of HR.

How does that affect employers?

Even though employers want to improve their talent pipeline for long-term internal promotion, potential job seekers continue to have leverage in the immediate future. Further, they have more tools than ever to find new opportunities. “As we continue to transition to a digitally-savvy, networked recruitment system, where job seekers can easily find new opportunities, we also need to understand the value of retaining and developing talent,” says Dermot O’Brien, chief human resource officer, ADP.

So, while qualified job seekers stand to benefit from the current situation financially, employers today will ultimately need to change their practices and establish a more long-term plan to attract and retain top talent over time. This could include a rededication to training programs, changing the corporate culture to focus more on promoting more from within, and allowing for more flexible work options that meet the needs of today’s workforce.

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