Carolina Credit Union League HR and Professional Development Conference October 23, 2014

1. Strategic Workforce PlanningAligning Talent and StrategyPresented by:Jill LackeyAllegacy Consulting Group Carolina Credit Union LeagueHR and Professional Development Conference October 23, 2014

2. What is Strategic Workforce Planning? • Strategic workforce planning (SWP) is the analytic, forecasting, and planning process that connects and directs talent management activities to ensure an organization has the right people in the right places at the right time and at the right price to execute its business strategy • Strategic workforce planning (SWP) is a critical business initiative and not a human resources activity Strategic (or long-range) planning = long-range planning for the business Strategic workforce planning = long-range planning for talent

3. Organizational Development:Strategic Workforce Planning

4. Two Types of Workforce Planning • Operational workforce planning – focuses on skills and capabilities needed within the next 6 to 18 months. • Strategic workforce planning – looks 3 – 5 years in the future and anticipates new skills, roles and situations that might not exist today. Deals with variables that cannot be predicted but can be prepared for.

5. The Business Case for Strategic Workforce Planning Each year, The Conference Board conducts a survey of CEOs, presidents, and chairmen from more than 1,000 companies around the world. The executives are asked to identify and rank the most pressing challenges they face. For the second year in a row, Human Capital — how best to develop, engage, manage, and retain talent — was named the leading challenge among ten choices.

6. The Business Case for Strategic Workforce Planning The strategies these CEOs plan to implement to address their concerns include: • Provide employee training and development. • Raise employee engagement. • Improve performance management processes and accountability. • Increase efforts to retain critical talent. • Improve leadership development programs. • Focus on internally developed talent to fill key roles. • Enhance effectiveness of the senior management team. • Improve effectiveness of front-line supervisors and managers. • Improve corporate brand and employee value propositions to attract talent. • Improve succession planning for current and future need

7. The Business Case for Strategic Workforce Planning • A 2014 survey conducted by pwc states “As US companies return to growth mode, anxiety over skills needs intensifies: 70% of US business leaders are concerned about the availability of key skills, a sharp increase over 54% that said so in 2013. Demand for highly valued skills is strong; the “war for talent” is as fierce as ever. Thus addressing the skills shortage is about much more than hiring fresh talent. It means taking a fresh look at the talent within. Businesses that have been able to build up intellectual capital by continuously cultivating the next generation can experience a distinct advantage”.

8. The Business Case for Strategic Workforce Planning • Aging workforce and approaching retirement wave • By 2020, 25% of the labor force will be age 55+, up from 12% in 1990. • In 2014, the annual growth rate of the overall labor force will shift • 55-and-older = 4.1 % (4 times the rate of growth of the overall labor force) • 25-to-54-year = 0.3 percent • 16-to-24-year-olds - essentially flat • Projected labor shortages • By 2018, with no change in current labor force participation rate or immigration rates and an expected return to healthy economic growth, we will have more jobs than people to fill them. • Anywhere from 5.0 million to 5.7 million potential jobs vacant • If the full employment gap is not filled, using Congressional Budget Office data, estimate the loss in total output as high as $3 trillion across a 5-year period beginning in 2018

9. The Business Case for Strategic Workforce Planning Projected Leadership Shortage In numeroussurveys, senior executives are expressing concerns that stiffening competition for exceptional individuals is curtailing plans for progress. • The Corporate Executive Board reports that 60% of organizations feel constrained by the leadership shortage • The Bersin Deloitte Advisory Board cites the need to develop organizational leadership capacity as one of the three biggest business challenges companies face today. • Bloomberg also rated leadership development among the top issues confronting HR professionals • Industry Week Magazine called the lack of potential leaders the most pressing human capital problem of our time

10. Strategic Workforce Planning Model

11. Align to Business Strategy • Analyze the long-range plan to identify impact to talent • What new core competencies emerge? • What organizational structure will best meet your future needs? • What systems and tools will be needed? • What are the cultural implications? • How will staffing needs change?

12. Align to Business Strategy Strategic Imperative: Implement business intelligence tools that drive performance to ensure long-term stability • Do you have the right technology people to identify, implement, maximize and continually evolve the use of these tools? • What impact will this have on the need for skills or competencies for users of this new data?– (how to analyze, systemic thinking, flexibility, change readiness)

13. Align to Business Strategy Strategic Imperative: Become an employer of choice Criteria for top 100 workplaces is based on trust and culture • How will this impact what you look for in leaders? • How will you shift the mindset of current leadership? • What training is needed? • How does this impact your succession planning criteria for promotable potential? • How will you measure and evaluate this?

14. Role Segmentation

15. Environmental Scan • External – Economic and regulatory • External – Labor market supply (external supply of candidates, employment brand, competition, recruiting sources like colleges, trade associations, etc.) • Internal – Organizational factors (long-range strategy, business plans, resource allocation, budgetary constraints, culture).

16. Environmental Scan

17. Economic Forecast External Environment Source: WSJ January Consensus Forecast

18. Key Regulatory Agenda Items for Credit Unions Taxation Risk-Based Capital Secondary Capital Business Lending Data Breaches/”Target” Incident Mortgage Regulations (QM) CFPB Definition of ERM External Environment

19. Environmental Scan

20. Unemployment Trends External Environment Source: BLS.gov; Data reported for December 2013

21. Environmental Scan

22. Future State Analysis

23. Current State Analysis

24. Gap Analysis • Compare current state to future state for EACH role • Role segmentation • Headcount needs • Skills and competencies • Experience and education • Behavioral characteristics • Level of engagement

25. Gap Analysis

26. Action Planning • Organizational structure design • Job redesign • Attraction and acquisition plan (recruitment strategies) • Outsourcing options • Redeployment needs or retooling plan • Performance management • Succession planning • Learning and development plans • Total rewards strategy • Retention and engagement strategy

28. Monitor and Report • Establish metrics • Create quarterly reporting and accountability procedures • Schedule quarterly SWP review meetings

29. Keys to Making Strategic Workforce Planning… Strategic • Driven by business strategy and objectives • Executive team’s commitment to making SWP a priority so it is proactive vs. reactive • Accurate and objective segmenting of the workforce • Consistent and sustained process and approach • Readily accessible analytics • Executive team’s capability to lead change

30. Supporting Infrastructure • Superior communication strategy • Enterprise-wide project management • Technology • Teamwork and collaboration