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November 1, 2010

The Five Most Common Workforce Strategy Mistakes

By Brad Kamph

Imagine a small car manufacturing plant that employed 100 people to produce 1,000 new cars in a given period. Then management formulates a strategy to expand that plant up to a production level of 10,000 cars. It lays out extensive plans for a new building, equipment, construction, supply lines and distribution, but it forgets to address perhaps the most crucial issue: that the existing 100 personnel are never going to be able to run the expanded facility.

Similar plans are made every week in the power industry. Management plans for a new natural gas plant, a huge expansion to a coal plant, or major additions to the transmission/distribution system. It designs the facility in detail and works out how to run the lines, position the boilers, the turbines, the auxiliary equipment, the supply lines/pipelines to bring in the fuel, and so on. But the personnel side is little more than an afterthought. In most cases, they manage to man it up and get it running. But such operations never seem to fulfill their potential. Conceived so poorly, the personnel situation results in low efficiency and unforeseen downtime.

Let's look at the five biggest mistakes that the industry makes with regard to workforce strategy.

Omitted Workforce Strategy

The most obvious error is not having a workforce strategy. Human resource (HR) management is an area that is too often dealt with on a last-minute basis; that often means paying the highest rates for already-trained staff. For some reason, managers are able to plan 10 years ahead to create new plants or greatly expanded operations. Yet they generally adopt too short-term an outlook on the people side.

For some reason, organizations are quick to lay off thousands as a "necessary economy," yet are painfully slow at hiring to meet pressing operational needs. At this writing, for example, one major utility has mandated a hiring freeze at a time when it is badly understaffed in key areas and losing millions as a result.

What is required is a workforce strategy that is every bit as detailed as the brick and mortar side. This planning must go into every aspect, from recruitment to retention and from operations to maintenance. It must encompass knowledge management, including both capture and transfer. It must take the long-range view to include the development of recruitment pools and mitigation of attrition from retirement and headhunting. Process optimization also plays an important role.

Furthermore, it must be done intelligently. That means getting an in-depth picture of the existing situation. That means taking a long and hard look at current employment levels and linking them to efficiency metrics. This should be done at a granular level, looking at every position and its associated performance.