Since the middle of last year, the world has been braced for an impending recession and this has had a significant impact on consumer and business confidence. Although according to some analysts, Asia Pacific (Apac) economies are likely to avoid a significant downturn despite facing headwinds from higher interest rates and slower trade growth.
Despite the optimistic outlook, Apac is certainly not immune to disruptive global forces. We only need to look back at the recent collapse of Silicon Valley Bank (SVB) and tumbling stock prices of other financial institutions, to know that such crises can cause ripples or waves across the globe.
One example of this effect is the global talent crisis, with warnings that by 2030, more than 85 million jobs could go unfilled because there aren’t enough skilled people to take them. In the wake of the Great Resignation, Apac employees feel ready to test the market in search of better pay and more meaningful work. Further, a workforce survey by PwC revealed that employees with specialisation are increasingly in high demand in the region and we keep seeing this play out in many sectors, but most prominently in technology. In fact, IDC reports that 53% of organisations in Apac are now taking three to four months longer compared to a year ago to fill technology roles.
Strategic workforce planning is critical for providing much-needed agility in the face of digital disruption, financial pressures, and external market factors. SVB was reportedly missing key personnel (including a head of risk management) leading up to their solvency crisis, which leaves us wondering if adequate succession and workforce planning measures were in place.
Even during economic uncertainties, organisations will need to solve several workforce dilemmas such as whether to continue to hire specialists or does a hiring freeze make more business sense. Is shift planning more effective by hours or in months? Companies need to be able to plan for broad and narrow hiring needs as well as employee expectations to continue moving forward.
Eliminating organisational siloes to drive better workforce decisions
See also: Becoming an adaptive leader in the age of technology
Against a backdrop of uncertainty, reactive hiring and ad-hoc workforce mobilisation don’t make sense. Not only does this leave businesses unprepared for potential disruption, but it doesn’t quite align an organisation’s workforce with long-term growth or diversification objectives and revenue targets.
Workforce planning can mean different things to different people depending on their role in the organisation. This can range from tactical workforce scheduling optimisation, capacity planning and activity management through to strategic workforce planning. Strategic workforce planning takes effort across multiple functions and requires true collaboration and synchronisation between HR, finance, and business leads. In most companies, headcount is the largest element of controllable cost typically accounting for 35% to 40% of total expenditure. Streamlining this expenditure is essential for an organisation to hit targets in terms of business goals and revenues.
Chief finance officers and their finance teams are experts at managing how money flows through the enterprise, but that doesn’t necessarily mean they are experts in how talent management is aligned to organisational and financial performance. Finance will make people's decisions with a predominantly financial perspective. So a workforce plan initiated by HR on the request of a particular business function may not necessarily tally with budget caps set by finance.
See also: Board members in Singapore feel least prepared to cope with cyberattacks
Improved cost control is not the only objective when it comes to workforce management. While over-staffing results in extra costs that impact a company’s balance sheet, under-staffing can conversely be damaging if it leads to service failures and long-term revenue generation.
Organisations across Apac are realising value through overall efficiency and competitive advantage with more strategic workforce planning. As an example, one of the largest banks in Apac reduced its forecast variance from 13% to 5% by replacing manual processes with statistical forecasting, also saving workforce expenses across three business units and 9,000 employees.
Moreover, with an increasingly mixed workforce made up of full- and part-time employees as well as contractors, it’s important to give line managers a flexible solution to help plan and get their resourcing right. This means having the right number of people with the right skills in the right place at the right time. In another example, a state railway operator turned to a data-driven workforce planning strategy to execute complex engineering projects, recruit and deploy specialists, and focus on planning for critical roles such as drivers, guards, and brake systems engineers.
Companies across Apac are further turning to a contingent workforce to overcome headcount shortages and are likely to increase usage over the next two years, which will also impact workforce planning decisions.
Workforce planning also allows for scenario (“what-if”) modelling for attrition for critical roles and to identify key talent to retain while creating a hiring plan to fill gaps. This enables HR and business leaders to gain accurate information of organisational workforce capacity and gaps.
However, many organisations are not properly equipped with the right technologies or data sets to enable strategic workforce planning. To achieve integrated, collaborative planning, using a connected planning platform is essential to keep organisations agile and adaptable in any situation.
Connected workforce planning for future growth
To stay ahead of the latest tech trends, click here for DigitalEdge Section
Data-driven insights are helping us make better decisions about people in areas such as workforce allocations to address specific operations and priorities, keeping staff aligned with demand, and facilitating inter-department or project transfers.
Workforce strategies may have once been outsourced to specialist firms and consultancies, but today forward-thinking organisations are increasingly bringing these capabilities in-house. By investing in a connected planning platform, HR, finance, and business leaders can gain a singular, accurate view of their organisation’s workforce, workload, and costs. This allows you to collaboratively plan and optimise your workforce, respond swiftly to market and talent-supply changes, and deliver on your business strategies and performance goals.
Apac has long been an engine of growth and prosperity and is predicted to be a ‘bright spot’ in the global economy in 2023. It’s time for businesses and governments to take on a proactive, data-driven approach to workforce planning and management and not let prevailing talent challenges obstruct opportunities for progress in the region.
Alvin Liew is the vice president of Customer Success for Asia Pacific at Anaplan
