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It can cost over 200% of an employee's salary to replace them, an especially scary stat when you realize that companies lose 25% of new employees in their first year.
But what if your human resources department could predict with 95% confidence when that turnover was going to happen? Not only would you save valuable time and money, you’d also be able to use such statistics to keep your hiring pipeline perpetually moving to prevent future talent gaps. Does it sound like science fiction to you?
According to Sebastien Girard, it’s not. It’s called strategic workforce planning. “This is obsolete in other industries and other departments,” he says, “We need to catch up.”
Sebastien is the SVP of Workforce Operations for Atrium Health, a North Carolina non-profit health system with over 70,000 employees across 42 hospitals. We recently connected with him to learn about his experiences using data analytics to enhance people operations, and what implications strategic workforce planning will have on future HR trends and business strategy in general.
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Understanding Strategic Workforce Planning
What is “strategic workforce planning?” (3:19)
When asked to provide a definition for strategic workforce planning, Sebastien instead provided a quote from the legendary hockey player Wayne Gretzky: “I skate to where the puck is going to be, not where it has been.”
Therefore, strategic workforce planning is defined as using detailed reporting from the past to forecast where you’re going to be in the short-term (6 - 18 months) and long-term (3 - 5 years).
According to Sebastien, HR has been seriously lagging in this kind of analytical forecasting and decision-making. “If you compare to other departments or industries [such as] marketing or manufacturing or tech, [it’s] all about predicting the needs ... and making it happen.”
Strategic workforce planning in action: attrition forecasting (5:44)
At Atrium Health, Sebastien leads the charge on predictive turnover. Using a regression model, they’re able to predict with 95% confidence when and where turnover will happen. “If you know that filling a [nursing role] takes 3 months, if you open the requisition before the turnover happens… you lower your turnover rate tremendously.” Atrium Health is therefore ready to make an offer before the turnover even happens, diminishing time-to-fill and never experiencing vacancy.
With "when" and "where" taken care of, all that’s left is the "who." They scan the job market, looking at competitor’s postings. Then, they map those postings to nearby teams to see if the competitors offer a better livelihood (commuting, compensation, benefits, etc) to make Atrium’s current employees consider applying.
Then on Atrium’s end, they are able to see what employees have given bad reviews or have been under corrective action, sensing turnover well before the vacancy opens. “Your talent acquisition function is one step ahead,” Sebastien says, “That’s how you can generate so much value to your organization.”
Doesn’t that put you at risk of over-hiring? (9:30)
“Yes, over-hiring means you can have two people doing the same job,” Sebastien starts, “but at the same time if there’s a true risk of turnover, what’s the cost of being short staffed?”
There are times where over-hiring is much cheaper than being short staffed and spending months trying to fill a role. It’s not just a matter of lost productivity, it’s also burdening existing staff with more responsibilities to close the gap. Sebastien explains that it then becomes a feedback loop. Overburdened staff get tired and look for new opportunities, turnover happens and you’re understaffed, overburdening remaining staff. Repeat.
“I would always recommend [doing] a business case and a full cost-benefit analysis. It may be worth it to over hire if there’s a true feeling that turnover is an option.”
In the case of Atrium, they can often recruit without making an offer. If over-staffing is a true risk, they just pay attention to the job market, see who’s interested in working with them, and let interested parties know that while they’re not ready to move forward yet, they will be considered next time there’s an opening.
Implementing Strategic Workforce Planning
Sounds great! So where’s the starting point? (12:00)
First, Sebastien recommends learning the difference between tactical and strategic functions of HR. Tactics refer to short term stepping stones, while strategy is the skeleton for long term scenario planning.
There’s a growing need for HR to drive the people strategy of an organization. Sebastien estimates that “the current need of strategy coming out of an HR department is 70% strategy, 30% tactical… in the next 5 years we’re going to be at 90/10.”
Knowing that, it’s important to ask business leaders what they truly need from HR as compared to what they currently get. Sebastien firmly believes that just by asking that question, you’ll see the gap. Stakeholders want strong talent acquisition strategies, total reward strategies, and incentive. All of those are considered strategic functions, not tactical functions.
Sebastien then lays out a five-step model that he uses to prepare an HR department for stronger strategic planning.
- Assess the structure of your HR department: “We are not in a world of jack of all trades, master of none anymore,” Sebastien cautions. Just as you would never ask a brain surgeon to perform heart surgery, “I would never ask somebody amazing in investigation to be in charge of employee experience.” Segment your department to maximize expertise.
- Assess what you are measuring: Make sure that the metrics you’re basing decisions on drive towards your business goals. In Sebastien’s eyes, the best example of misplaced importance is time-to-fill. “I hate that metric because the only thing it measures is speed. So the incentive is to go fast [regardless] if the quality is there.”
- Look into technology and tools: Utilize applicant tracking systems, payroll & benefits software, and other systems to automate tedious tasks and streamline HR processes.
- Make profiles of people hired: HR is evolving into a business department with a people specialty. You need to have a balance of people from HR backgrounds and people from other business backgrounds with the right skills. At Atrium Health, the ratio is about 50/50. “The best way to tap into knowledge that’s going to make your department better is to bring them from outside what you already know.”
- Strategic workforce planning: Build your HR processes around a proactive mindset. Then you can bring that function to executives to never be behind the eight ball.
If I’m an HR team of one, that doesn’t seem feasible. (15:47)
Even if you’re a small team or a team of one, Sebastien says you have to assess how you’re spending your time. “If the work you’re doing is tactical and not strategy, you’re already missing the mark.” In that case, it’s not about having the right amount of people, it’s about having the right tools. If the tools are handling the tactical work, you can focus on the strategic work.
For example, Sebastien is mentoring someone who is an HR team of one. For the most part, her job is very tactical. But her true value would be keeping great talent around and preventing turnover. How can she do so when she’s spending so much time on her administrative tasks? She’s now building a business plan to obtain the proper tools to streamline her menial duties.
Sebastien urges that strategic workforce planning is mindset, not necessarily a role. You don’t desperately need a data scientist in your HR department (although Atrium Health does have one). Conversely, you can take a strategic workforce planning certification course. You’ll learn how to build that mindset to harness data properly.
So I understand how to predict future trends. What about looking retroactively? (18:55)
In one of his previous positions, Sebastien noticed the connection between overtime and engagement. Nurses who worked 4 hours overtime saw just the right amount of additional compensation to keep them engaged. If they worked any less than 44 hours per week, they felt they weren’t earning enough. When they worked any more than 44 hours per week, they felt overworked. Any other ratio saw a rise in turnover and drop in engagement.
By using strategic workforce planning with your past data, you can map key HR components to each other to create correlation, just as with nurses and overtime.
Expert Insights
How have you used SWP to understand the long term work trends? (20:20)
HR has been becoming a business function. But thanks to strategic workforce planning, Sebastien saw it change into an experience function. “It’s a department that needs to create [a] point in time that’s going to generate emotion… and [emotionally-invested employees] are very loyal.” As such, they’re paying attention to the growing experience economy.
There were a few other trends on Sebastien’s radar. He found remote working to be a rising trend even before COVID-19 hit, when its adoption rapidly accelerated.
He also recognizes that the future workforce of Gen Z will shift to a gig economy, where they’ll do the work but stay off company payroll.
He foresees that employed people will increasingly find new jobs passively. Sebastien notes that the percentage of these passive job seekers grew from 35% before social media to 80% currently, with new technology soon pushing the number to 100%. “If 100% of our teammates have access on their phone to any job at any point, they can do it while they work, and they're not even looking and they’re happy, how do you keep them engaged?" he asks.
Video recruiting is another growing tech trend. Sebastien acknowledges that there’s video interviewing software out there with lie detection features. How will that change the way a talent acquisition team functions?
Why so many questions but not so many answers?
You can’t get an answer if you don’t ask the question. Strategic workforce planning is the catalyst for questions. It begs you to look back at your company’s HR trends and think: what do we improve, and how do we improve it?
Strategic workforce planning gives your HR department the skill set it needs to rise from the dredges of administrative work into sharp people analytics operations. Whether it's by preventing turnover, capturing the attention of passive candidates, or even preparing for the gig economy, your company will be two steps ahead.
About Sebastien Girard
Sebastien Girard is the Senior Vice President of Workforce Operations for Atrium Health. Despite his French-Canadian roots, his favorite sport isn’t hockey. Instead, he’s a huge American football fan, having accomplished the impressive feat of visiting more than half of the NFL’s stadiums with the goal to see every single one.
He encourages anyone interested in learning more about strategic workforce planning to connect with him on LinkedIn, as he’s always happy to share.
This is part of a series on Select Software where we interview the best and brightest People people who support our mission to make buying HR tech easier.
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