For the past 18 months, we have all been living a once-in-a-generation moment. It has taught us that we have the resilience and skills to reimagine our current structures and policies on the fly; remote working, telemedicine and talent sharing are just a few examples. This pandemic ushered in unprecedented transformation at unprecedented speed, impacting what people want and how those wants vary by gig workers, core workers and others.
In response, executives were able to rally around a single, outside-in view of the enterprise and came to see the important demand drivers on HR. The impact of workforce strategy on business strategy and business continuity came into focus and is now becoming a central part of what future-forward HR teams are engaged in.
By imagining future events and analyzing the potential impacts, HR leaders are well positioned to bake challenges and opportunities into their strategy. In essence, scenario planning sits at the intersection of, and supports, two things every HR professional is consumed with today: workplace strategy and business continuity.
Here are six tips for successful scenario planning, whether you're dealing with short-term impacts, worst-case scenarios, bouncing back or resetting your future of work agenda:
- Use data to pre-fabricate scenarios. The pandemic has given us rich data on how businesses will fare during this type of shock, the implications on the workforce and their benefit needs. Combine this data with known megatrends that might hit your business to build realistic storylines that enable implications to be mapped out, as well as the likelihood and impact of risks calculated.
- Get the right people in the (virtual) room. Scenario planning and the discussions that ensue are only as good as the people contributing. Divergent thinking thrives when you use remote working tools for this part of the process. Cognitive diversity is key. Always have someone from outside the business (customer, supplier, competitor or the like) in the room as well as those that operate close to your current HR policies and processes.
- See this as a two-part process. First, validate and hone the scenarios so they are beyond your current thinking but not unfeasible (bring in data and experts to help as needed but don't let the desire for certainty stand in the way). Secondly, narrow the scenarios down to one or two and work out the HR implications across relevant dimensions (e.g. agility/efficiency, employee experience, risk/cost, HR flexibility, etc.) and the preparation needed to mitigate the risk.
- Consider the impact on both workforce plans and spending under different scenarios. How might the HR team need to flex and realign resources to support these outcomes? Also, consider how technology and the wider ecosystem can be used to optimize outcomes for the business and the individual.
- Share financial implications and recommendations with decision-makers. Digital whiteboards, digital focus groups and other collaboration tools and techniques ensure all inputs are captured. Leverage communication experts to share findings into a compelling plan or story that speaks to the business risk and/or financial impact to inform decision-makers of the steps to take in ways that are memorable.
- Identify alerts and define triggers. Part of the value of scenario planning is being able to see and quickly respond to a crisis. Thus, you want to understand what market-sensing or employee-sensing data is needed to give early warnings of one or more scenarios playing out.
When considering scenario planning in the HR context, it's essential to combine cross-functional perspectives with predictive analytics using existing company data. To this end, HR will want to consistently conduct and document a cross-functional dialogue that brings experts from across the enterprise together — personal representatives, business leaders, workforce scientists, economists and so on. This will put finance (costs); people managers (retention and attraction); business strategy (long-term planning); and the voice of the employee in conjunction with one another. The result? Effective balancing of economics and empathy in decision-making.
To meet the needs of the moment, technology and analytics can be powerful scenario planning tools. Predictive analytics has long been used in strategic workforce planning, but it can also help predict benefits costs, for example, and demonstrate the downstream consequences of workforce changes on any number of talent and reward strategies.
With or without technology, the ability to plan together and consider the impact of changes in the workforce on health, well-being and productivity losses and/or benefit costs is tremendous. Bringing human sensing into the equation to understand the personal impacts of workforce health and benefit cost changes can't be understated. Digital focus groups are one way to bring the voice of the employee into the planning, and most have gotten comfortable with digital whiteboarding for generative discussions when the team is remote.
On the surface, scenario planning can feel a bit like fortunetelling: you gaze into the unknown future to see what happens. But unlike being told by a crystal ball what your future will be, scenario planning is the act of getting you, your people and your organization where you want to be.