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Webinar presented to HCI (Human Capital Institute) on March 2, 2010
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©2009 Regence
Transform Your Talent Management Capability Through EffectiveStrategic Workforce Planning:A Case Study
Jan Ahrens JohnDirector, Strategic Workforce Planning
March 2, 2010
2©2009 Regence
The Current Landscape
Regence—Our Journey
Approach
Lessons Learned
Impact
Agenda
3©2009 Regence
The Current LandscapeStrategic Workforce Planning (SWP)
Sources:• Sibson Consulting, Rewards of Work Study, 2009• Bersin & Associates, The Modern Approach to Workforce Planning, 2009• HCI, Identifying Business Value in Workforce Planning—Articulating the Return on Strategic
Workforce Planning, 2008
SWP is a Relatively New Practice
While workforce planning has been around for decades, only recently has attention been focused on its strategic value:
92% of companies have some level of workforce planning, but only 21% take a strategic, long-term approach to addressing their talent needs
Identifies Key Roles and Workforce Data to Drive Performance
Enables senior leadership to understand and forecast future talent needs based on relative value to strategy execution:
74% of executives consider workforce planning a priority in their organizations, while only 57% of HR professional perceive it as a corporate priorityOnly 25% of organizations are able to help business leaders forecast revenue and operating budgets
Prioritizes Talent Management Actions and Investments
Informs the business and HR of the “build, buy, or borrow” actions and investments needed to close critical talent gaps:
Almost 70% of the surveyed organizations are changing their talent management programs based on the results of their workforce planning analyticsHigh performers had higher Engagement, EVP satisfaction overall, and lower turnover intentions than the overall sample
4©2009 Regence
Three Types of Workforce Planning
21%
Business Planand Headcount
TraditionalWorkforce Planning
Business Planand Headcount
Business Planand HeadcountBusiness Planand Headcount
Basic Workforce Data and Analytics
Workforce Data, Analytics andForecasting
Workforce Data, Analytics andForecasting
Business Strategy and Segmentation
of Workforce
Business Strategy and Segmentation
of WorkforceWorkforce Analysis
StrategicWorkforce Planning
Increased Value to the Business
Deg
ree
of P
eopl
e In
vest
men
t
5©2009 Regence
Driven by business strategy and objectives
Accurate and objective segmenting of the workforce
Consistent process and approach
Readily accessible analytics
HR capability to lead change
Keys to Making Strategic Workforce Planning…“Strategic”
5©2009 Regence
6©2009 Regence6
Poll Question
If you were to implement strategic workforce planning, which of the following challenges/barriers would you experience:
Lack of resources
Little support from top management
Lack of business case
Lack of capability or defined methodology
Lack of tools and technology
Two or more of the above
Three or more of the above6©2009 Regence
7©2009 Regence
The Current Landscape
Regence—Our Journey
Approach
Lessons Learned
Impact
Agenda
8©2009 Regence8
Who is Regence?
Regence, a member of Blue Cross and Blue Shield Association, is the largest health insurer in the Northwest/Intermountain region, serving members in ID, OR, UT, and WA
We have 2.5 million members accessing health careacross the country and around the world, andprocess nearly 3.5 million claims a month
We have 6,200 employees and partnerwith more than 52,000 providers and2,400 facilities in nearly1,000 communities
Our $8.9 billion company defines success by how well we advocate for—and make a difference in—the health of our members…a promise we have kept for more than 90 years.
9©2009 Regence
Where we were in 2008
Rising health care costs
Increasing focus on health care reform fueled by political debates
Aging workforce—potential lossof critical knowledge
Changing landscape—with morecompetition from national players
Expanding product lines thatrequired new capabilities
Broadening use of technology to provide instant validation
Understanding the current workforce and the required future organizational capabilities and talent was a top priority for the business and HR.
10©2009 Regence
New Problems Required a New Approach Key Questions
How do we identify which roles are most and least critical in driving results?
What capabilities are absolutely essential, and what investments are needed?
How do we predict and analyze the implications of our internal workforce dynamics?
How do we better anticipate dynamics in the external labor?
Targeted Outcomes
Understanding of our Current and Future Talent NeedsClear connection between the business strategy and our people strategy
Right skills in the right places to drive execution of our strategic objectives
Control of Workforce DynamicsBetter insight into the internal and external workforce dynamics to ensure we have the right people in the right roles at the right costs
Talent Management as a Core Business ProcessEstablished and repeatable processes to do the work, owned, and driven by the top of the organization
11©2009 Regence
Our Journey
Initiated Diagnostic Baseline
Assessment of HR
Began announcing
layoffs
Launched SWP engagement
Completed 19th
(and final!) SWP for year one
Built internal capability of
HR staff
Researched consulting firms & selected Sibson
Jan moves from Director OD to
Director SWP role
Launched 3 SWP pilots
2008 2009‘08Q1 ‘08Q2 ‘08Q3 ‘08Q4 ‘09Q1 ‘09Q2 ‘09Q3 ‘09Q4
Building Accountability & Buy in: If you build it RIGHT…they WILL come.
Scheduled additional 16
Divisions
Launched additional plans, provided just-in-time training for other
HR staff
Analyzed input by Strategic
roles in annual Engagement
Survey
Installed web-hosted tool; rolled up enterprise-
wide data
Announced pension plan changes and
more layoffs
Developed initial EVP collateral for Strategic roles in
3 Divisions
Incorporated SWP into annual
planning process
Roll out succession
planning for all Strategic roles
2010
Launch SWP Year 2
‘10Q1 ‘10Q2
12©2009 Regence
The Current Landscape
Regence—Our Journey
Approach
Lessons Learned
Impact
Agenda
13©2009 Regence
Our ApproachUpfront Considerations
What expertise did we need?Decide on the appropriate subject matter partner—credibility and track recordAbility to move fast was criticalMust transfer capability, we could not afford to be consultant dependentAvailable as ongoing lifeline
How could we make SWP sustainable?Ensure internal HR capability and business ownership for the long runRequire a repeatable, yet customizable processAccess to robust analytics—real time decision making
Where should we start?Build support and address resistance early on Start small and grow from thereSelect pilots from both ends of the spectrum (large and core to the business/small and more fringe)Use our successes as leverage
14©2009 Regence
Our ApproachConceptual Framework
Specific HR and Line
Operating Plans to
Execute the Strategy
Actions and Investments
Talent Development“Actions to develop
current andnext generation
talent”
Succession Management
“Talent portfolio anddecision process”
Integrated Performance
Management and Rewards
“Reinforcements that drive accountability”
Talent Acquisition“Branding,
sourcing, and engagement”
RoleRequirements
Business Strategy and Objectives
Strategic Workforce Planning
Type
Gaps and Priorities
Number
Actions/Investments
4
2
3
1
DifferentiationDifferentiation
Strategic Workforce Planning serves as the headwaters to make informed decisions on Human Capital Priorities and Investments.
15©2009 Regence
Our ApproachConceptual Framework
Segmentation enables you to understand and manage your human capital like a portfolio of assets.
Segmentation strategically values talent and enables prioritization of talent needs and talent investments.
StrategicCritical to driving long-term competitive
advantage, with specialized skills or knowledge
CoreThe “Engine of the Enterprise,” unique to the company and core to delivering
on its products and/or services
RequisiteCannot do without, but whose value could be delivered through alternative staffing
strategies (other than full-time headcount)
MisalignedTalent whose skill sets no longer align with the company’s strategic direction
Roles that drivethe strategy
Roles thatsupport
the strategy
Roles impacted bythe strategy
Talent SegmentImpact Investments Over Time
Strengthen
Protect
Streamline/Outsource
Redeploy
16©2009 Regence
The Current Landscape
Regence—Our Journey
Approach
Lessons Learned
Impact
Agenda
17©2009 Regence
Lessons LearnedFirst Steps
Piloted with three different divisions
“Timing is everything:”The BOHICA Syndrome
The Ugly Baby Syndrome
“Strategies? What strategies?”
“All of our roles are strategic!”
“Layoffs tomorrow”
“How can we…if we don’t know…?”
TIP #1: Be ready to be an ACTIVE cheerleader & change agent.
18©2009 Regence
Lessons Learned“We are where we should be”
Rolled out consistent process for 19 Divisions:Each Division has a planOver 105+ leaders involvedOver 35 talent requirements developed out of 110 strategic roles (8% of workforce)10 enterprise-wide actions and investments are being tracked
Emphasized collaboration—Divisions and functions worked across silos Increased risk awareness (e.g., time to proficiency, build/buy decisions, etc.)Increased knowledge of workforce implications on business—web-hosted tool Gained ground: Old Way—“Think people first, position second”Proactive applications
TIP #2: Link to the business and get the role requirements RIGHT.
19©2009 Regence
Exhibit 7: Staffing Needs to Fill Talent Gaps
Lessons Learned“We are where we should be”
Exhibit 6: Talent Gaps
Exhibit 8: Cumulative Quarterly Staffing Costs
Exhibit 5: Training Needs and Residual Talent Absorption (Ramping Up)
TIP #3: Speak the language of business, let the data talk.
20©2009 Regence
Lessons LearnedWhat People Are Saying…
“ This is the first time we’ve ever talked about what we’ll need 3 years from now.”
“ Great tool for making strategic decisions…viable option to look at future (e.g., Demographics, age, very telling).”
“ Opened a window that not all skills sets/people are interchangeable. Helped us name premium roles.”
“ A discipline that comes with repetition”
“ Better understanding of the inter-relationships of my Strategic roles in other divisions. I’ll manage their availability to cover the most critical work.”
“ Looking at this data will change the way we run our business.”
“ Let’s use this again as soon as federal reform info comes out.”
21©2009 Regence
The Current Landscape
Regence—Our Journey
Approach
Lessons Learned
Impact
Agenda
22©2009 Regence
ImpactWhat is different today?
SWP is now included in the annual business planning process—prior to budget settingSWP metrics are part of the Regence corporate balanced-scorecardTalent requirements for the majority of current/new “strategic” roles are in place Specific retention strategies have been created to address specific markets and talent needsExecutive “pull” established for an enterprise-wide succession plan for all critical rolesA Differentiation culture is emerging vs. a “everything, for everyone, all the same”cultureConsistent approach in place across all major divisions for developing external sourcing strategiesQuantified that our “strategic” roles averaged .5 STD below other company employees on engagementClear definition and agreements on which roles are most critical to the organizationEmployee Value Propositions (EVPs) created for several “strategic” roles
TIP #4: “It ain't over till it's over.” —Yogi Berra
23©2009 Regence
ImpactConnection between Strategic Roles and EVP
24©2009 Regence
ImpactConnection between Strategic Roles and EVP
25©2009 Regence
ImpactConnection between Strategic Roles and EVP
26©2009 Regence
Final Words from a SWP Expert
“ Opportunities are never lost. Someone will take the ones you missed.”
“ Ignoring the facts doesn’t change the facts.”
—Andy RooneyImage Source: billypalooza, Flickr.com