and the implications for operating practices such as approaches to
individual development, performance management, compensation and
decision making. Let’s now take a look at the second of the workforce
planning components: namely projecting how current workforce trends will
likely influence future workforce composition. We will use an example
(similar to a real case) of an organization of 15,000 people that has
been in existence for 15 years. Leaders throughout the organization are
beginning their workforce planning process and wish to know about
possible attrition in the future, what this might mean for future
hiring, and the cost and organizational value implications.
Using mathematical modeling we can estimate future attrition and hiring
and the value implications. For example we can explore the influence
of: varying attrition rates by years of service, a changing profile in
how long people stay with the organization, and changes in the size of
the workforce. Let’s examine our organization of 15,000 people. For
this example we will look at the case where three thousand people have
been with the organization one, two and three years, while every other
annual cohort contains 500 people. Attrition is 20% for those who have
been with the organization one year, 30% for those who have been there
two and three years, it then gradually falls to 5% for those with six or
more years of service. With this basis we can now project what will
happen to future attrition and what this means for future hiring. The
following figure shows the results of the mathematical modeling process,
projecting five years into the future based on a desire that the
workforce grow 10% each year.
The solid line shows the workforce growing from its starting point of
15,000 people to almost 25,000 people after five years. The bottom
line, with smaller dashes, shows the cumulative number of people lost by
attrition if the historical attrition profile prevails. After five
years the organization has lost more people by attrition than were
present at the beginning of the five year period. To replace this loss
and to accommodate growth aspirations, the organization has to hire a
total of more than 25,000 people over the five year period (cumulative
hiring is shown by the line with the larger dashes). This is a
monumental task and speaks to the critical issues facing the
organization. It can be expressed in terms of value as shown in the
following figure:
Here we see the value subtracted from the organization over the next
five years due to attrition for two cases: the first, which we just
examined, 10% per year growth in the workforce, and the second
maintaining constant size of the workforce (15,000 people) over the five
year period. The bars in the figure, which refer to the left vertical
axis, show the calculated value that is subtracted from the organization
due to attrition, in millions of dollars using the assumptions shown on
the figure. The red line, which refers to the right vertical axis,
shows this subtracted value as a % of total organizational value. We
see that for the earlier example of 10% per year growth of the
workforce, attrition subtracts $1.3 billion or 21% of the value of the
organization over five years. The lost value is even greater for the
constant workforce case due to the opportunity cost of lost growth.
Given these projections, it is clear that for this organization there is
a substantial incentive to invest in stemming the tide of attrition.
This will likely begin with appropriate diagnostic tools to understand
root cause concerns (see the June 2005 issue of Bringing Work to Life),
followed by taking steps to strengthen affiliation (see the November
2005 issue of Bringing Work to Life for a discussion of affiliation).
The modeling aspect of workforce planning helps guide and focus decision
making by quantifying the incentives to commit resources, the potential
benefits of such commitments and, as a result, the expected contribution
to value creation. As such, it is an important tool to help provide key
insights into how to secure the workforce needed for the future.
Some of the material in this article is extracted from Affiliation in
the Workplace by Ron Elsdon, Praeger, 2003.
Social and Economic Trends
Information from the U.S. Bureau of Census (U.S. Bureau of the Census,
Income, Poverty, and Health Insurance Coverage in the United States:
2004, Report P60, n. 229, Tables B-1 and B-2, pp. 46-57).shown in the
following figure continues to point to a disturbing increase in poverty
that is again emerging in the 2000s, just as it did in the 1980s.
In this affluent society of ours we are failing to meet our obligations
to future generations, as it is children who are bearing the brunt of
these recent disturbing trends. The following figure shows how the
gains that were made in the 1990s are rapidly eroding in the 2000s for
children. (Source: Austin Nichols “Understanding Changes in Child
Poverty Over the Past Decade” The Urban Institute, May 2006.)
These trends come from choices we make in social policy, taxation and in
the lack of equity in distributing the fruits of our labor in
organizations. They result from growing inequity in income in our
society. The following table provides insights into how this inequity
varies by State. Here the comparisons are between families in the top
and bottom and bottom fifth of income, and between those in the top and
middle fifth. (Source: Jared Bernstein et al, “A State-by-State
Analysis of Income Trends” Economic Policy Institute, January 2006.)
Here is the perspective of Muhammad Yunus, the 2006 recipient of the
Nobel Peace Prize, in an address to the University of the South in
Sewanee, Tennessee in 1998. “We have created the present world in this
particular manner because our minds were trained to behave in a
particular set of ways which led to this formulation of the world. If
we train our minds to think differently we can create another kind of
world. For example, we accept the fact that we'll always have poor
people around us. So we have poor people around us. If we had believed
that poverty should not belong to a civilized human society, we would
have created appropriate institutions and policies to create a
poverty-free world. We wanted to go to the moon --- so we went there.
If we are not achieving something, my first suspicion will fall on the
intensity of our desire to achieve it. I strongly believe that we can
create a poverty-free world, if we want to. We can create a world where
there won't be a single human being who may be described as a poor
person. In that kind of a world, the only place you can see poverty will
be in museums. When school children will be on tour of the poverty
museums, they'll be horrified to see the misery and indignity of human
beings. They'll blame their ancestors for tolerating this inhuman
condition to continue in a massive way.
My work in Grameen has given me a faith; an unshakable faith in the
creativity of human beings. That leads me to believe that human beings
are not born to suffer the misery of hunger and poverty. They have much
more important things to do than struggle for physical survival. They
suffer from miseries and indignities of poverty because we trained our
minds to accept the fact that nobody can do anything about poverty
except offering charity.”
In founding the Grameen Bank, Muhammad Yunus made resources available to
those in abject poverty and provided a foothold to begin a climb out of
poverty. We can emulate this inspiring act and provide our vastly
greater resources as a blessing to all those in our society.
Quotes
“We have grasped the mystery of the atom and rejected the Sermon on the
Mount … Ours is a world of nuclear giants and ethical infants.”
General Omar Bradley
“Can't
run no more
With the lawless crowd
While the killers in high places
Say their prayers out loud”
Leonard Cohen, Anthem
“… wars are poor chisels for carving out peaceful tomorrows. One day we
must come to see that peace is not merely a distant goal that we seek,
but the means by which we arrive at that goal.”
Martin Luther King Jr.
Upcoming Elsdon Organizational Renewal (EOR) Events and Recent
Mentions
Upcoming Events/Recent Publications
·
Presentation for U.C. Berkeley,
Haas School of Business, April 18, 2007, “Progressing Outside Your
Organization.”
·
Presentation for John F. Kennedy
University, School of Management Open House, April 26, 2007, “The Have’s
and Have-Not’s: The Growing Divide, Implications for America’s
Workforce.”
o
http://www.jfku.edu/oh/04262007/
·
“The Growing Divide Calls for
Advocacy.”
o
Article in March, 2007, NCDA Career Convergence magazine
§
http://209.235.208.145/cgi-bin/WebSuite/tcsAssnWebSuite.pl?Action=DisplayNewsDetails&RecordID=947&Sections=&IncludeDropped=1&AssnID=NCDA&DBCode=130285
Recent Mentions
·
Reviews of “Affiliation in the
Workplace: Value Creation in the New Organization.” Ron Elsdon.
Praeger, Westport, CT (2003)
o
Harvard
Business School
·
HBS Working Knowledge: Organizations
o
Global Diversity Institute
·
Global Diversity Institute - The Journal of Diversity Praxis
o
Journal of Asian Economics
·
ScienceDirect - Journal of Asian Economics : Ron Elsdon, Affiliation in
the Workplace: Value Creation in the New Organization, Praeger
Publishers, Westport, CT (2003) 280 pp. (hardcover), ISBN 1-56720-436-8,
$49.95.
o
Greenwood Publishing Group
·
Affiliation in the Workplace — www.greenwood.com
·
Chapter titled “How Can You Grow
Your Practice with Purpose?” in National Career Development Association
Monograph, “Starting and Growing a Business in the New Economy” Edited
by Sally Gelardin, 2007
·
Recorded webinar for Project
Management Institute
o
“Becoming Career Fit in Turbulent Times”
·
http://pmi-issig.org/Default.aspx?tabid=319
·
“Building a Strong Workforce
Through Affiliation.” Chapter 26 in “On Staffing: Advice and
Perspectives from HR Leaders.” Eds. Nicholas Burkholder et al, John
Wiley & Sons, Inc., Hoboken NJ (2004)
o
http://www.wiley.com/WileyCDA/WileyTitle/productCd-0471410691,descCd-tableOfContents.html
·
“Reaching for Our Deep Gladness”
o
Article in May, 2005, NCDA Career Convergence magazine
·
http://209.235.208.145/cgi-bin/WebSuite/tcsAssnWebSuite.pl?Action=DisplayNewsDetails&RecordID=625&Sections=6&IncludeDropped=&AssnID=NCDA&DBCode=130285
·
Mention in article on cost of
turnover
o
East
Bay Business Times,
April 2005
·
Turnover costs exceed employers' estimates - 2005-04-25
·
“Worklife Survival: Finding a
Fit”
o
Article for HR West, February 2005 (Northern California Human Resource
Association)
·
http://www.nchra.org/StaticContent/Download/EXT0205007.pdf
·
Interview in the education field
“Affiliation as a Unifying Principle in Education”
o
Career Pro News
·
Affiliation and Education
·
MBTI Step II workshop
o
CCDA News, April 2005
·
Local Chapter News
·
Review of ICDC Global Issues
Forum
o
CCDA, January 2005
·
ICDC Global Issues Forum
About EOR: Our Value Contribution
We enhance your workforce,
leadership and organization by:
·
Using proprietary approaches to
understand workforce and leadership challenges
·
Creating tailored action plans
and solutions to strengthen workforce and leadership practices
·
Building individual capabilities
and contributions
We enable you to focus on
external results and building value, confident that your organization
and leadership are operating at peak effectiveness.
Our Mission
To support your organization by
enhancing performance, productivity and effectiveness through
revitalized workforce relationships and leadership practices.
Our Approach and Values
We tailor our engagements to the needs of each organization with a
process designed to surface critical issues, identify root causes, build
effective solutions, monitor progress and implement.
With a scope that ranges from system and organizational interventions to
work with individuals, our focus is on the heart of the relationship
among the individual, the organization and the community. We believe
that organizational and community prosperity are built on enabling each
person to fulfill his or her potential.
Our Services
We work with individuals and
groups in your organization to drive performance and development for
both the short and long term. As a result people will choose to work in
your organization and will prosper there.
We bring solutions when you need
to:
·
Reverse declining revenues and
performance
·
Revitalize your workforce
·
Stem the loss of key talent
·
Redirect your organization to
new areas
·
Stop losing customers or market
share
·
Penetrate new markets
·
Combat aggressive competitors
·
Handle major change
·
Break down communication
barriers
·
Energize your leadership team
·
Successfully build on an
acquisition or merger
Our proprietary services
include:
·
State-of-the-art tools to take
the pulse of your organization and then move to action
o
Web enabled systems
o
Experts to gather and analyze information, moving your organization to
action
·
Individual leadership coaching
to give you world class leadership capabilities
o
Leaders who know themselves and their aspirations, build their
capabilities and become catalysts developing others
·
Workshops to build interpersonal
skills in your organization so that:
o
Communication is timely, concise, accurate and personal
o
People listen to each other
o
Negotiations are quick and effective
o
Differences create rather than destroy value
o
Teams move forward, get results and quickly commercialize new products
and services
o
People understand and link their motivations to your organizational
needs
o
Your teams understand what it takes to create a committed, energized
workforce
o
People use their time well
·
Systems that make it easy to
drive performance and build capabilities by:
o
Linking objectives throughout the organization
o
Strengthening key competencies
o
Making sure you have the bench strength where and when you need it
o
Giving people tools to take charge of their own careers and development
and have a major long term influence on your organization
·
Proprietary simulation and
modeling techniques that let you explore how to maximize the value of
your workforce
o
Move from guessing what might happen to looking in depth at the
financial impact of different approaches
