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1. BUILDING
STRATEGIC
WORKFORCE
CAPABILITY
HOW TO ALIGN RESOURCES WITH STRATEGY
FOR BETTER BUSINESS OUTCOMES
SUSAN DEFAZIO

2. TABLE OF CONTENTS
/04 Creating opportunities with strategic workforce planning
/08 Building knowledge and capability
/12 Aligning strategy with capability
/18 People implications
/22 Evidence-based human resources
/24 Conclusion

3. /03
Increasingly, competitive
advantage comes not from
your traditional products
or services, but the skills,
knowledge and experience of
your employees.
THEY’RE THE
ONES WHO WILL
IDENTIFY AND
DEVELOP THE
BEST SOLUTIONS
AND OUTCOMES
FOR YOUR
CUSTOMERS.
– Dr. Anne Dibley,
associate professor of marketing
at Henley Business School

4. /04
CREATING
OPPORTUNITIES
WITH STRATEGIC
WORKFORCE
PLANNING
The ability to attract
and retain people with
valuable skills is vital
for companies seeking
to reduce risk and
stay competitive.

5. /05
Organisations often invest great time, effort,
and money in developing products and services,
but few take the same care with their workforce
resources. Although human capital accounts for the
majority of all operating expenses in most enterprises,
too many still apply the same demographic and
psychographic HR processes to every role and
worker, without differentiation.
This one-size-fits-all approach is no longer enough
to maintain a competitive advantage. To succeed,
organisations must now segment the workforce to
elevate critical roles and better align people’s personal
motivations with core business values.
This is where strategic workforce planning (SWP)
comes into play. SWP is the practice of aligning
workforce resources with strategic priorities. It involves
segmenting strategically important roles from standard
roles, allowing businesses to better meet demand for
key skills to support business objectives.
CEOs and executives are coming to understand the
strategic importance of human capital and many now
view workforce strategy as a priority. But taking a more
strategic approach to workforce planning is complex
and requires HR leaders to:
• match demand for workforce resources with
supply dynamics
• account for the changing motivations among sought-
after people with strategically valuable skill sets
• segment and prioritise strategic roles across
the business without distancing other members
of the workforce
• align job roles with strategic execution, finding
the right balance between strategic and
non-strategic roles.

6. /06
Without the necessary experience and skills, the right
workforce data or a proven model to follow, these
outcomes can seem unattainable for HR leaders. But
those who fail to focus on SWP risk losing responsibility
for workforce planning as executives turn to marketing,
operational design and strategy functions to fulfil their
business’s need for critical skills.
SWP represents a major undertaking for any business,
but HR leaders should be able to demonstrate its value
to the business with adequate planning. The key is
to start small and structure pilot projects around four
central processes:
1. Taking stock. Gain a clear understanding of the
organisation’s current workforce planning maturity
level and how this needs to change.
2. Setting goals. Consider how to align strategic plans
with worker capabilities and psychographics in key
focus areas that might be receptive to SWP.
3. Making a plan. Create a new organisational
framework that supports the flow of strategic
and nonstrategic workforce resources through
the business.
4. Measuring the results. Apply evidence-based
human resources (EBHR) practices to measure
and demonstrate successes, and use the resulting
metrics to support a business case.
This paper explores each of these practices in detail. If
you are ready to demonstrate the value of SWP
to leaders in your organisation, then read on.
CREATING OPPORTUNITIES WITH STRATEGIC WORKFORCE PLANNING

7. /07
STEP 1
Strategic priorities
SWP
Workforce
Analytics
Selected Business Initiatives
Increase Organizational Capability
Change
Management
I believe real success comes
from right brain thinking and
tacit knowledge that deals
with aesthetics, creativity,
emotion – how a company
makes you feel.
CAPTURING
THAT IN AN HR
CHECKLIST IS
REALLY DIFFICULT.
BUT IF IT WERE
TANGIBLE,
EVERYBODY
WOULD BE
DOING IT.
– Dr. Moira Clark,
professor of strategic marketing
at Henley Business School.
FIGURE 1:
SWP IN PRACTICE
STEP 2
STEP 3
STEP 4
Measure, improve, and close gaps

8. BUILDING
KNOWLEDGE
AND CAPABILITYRather than trying to ‘boil the
ocean’ with an enterprise-wide
project, it’s better to focus on
small pilots in receptive business
areas, using existing capabilities
and workforce resources.
/08

9. /09
When choosing a pilot, it’s essential to find a part
of the business that stands to gain from SWP.
Think carefully about the strategic and core roles within
the business, and then look for ways a SWP framework
could help improve business performance.
Discovery and design
The first step in any SWP intervention is to embark
on a discovery phase. It’s important to understand your
enterprise’s current workforce planning capabilities and
how these must change to support a strategic focus.
There are five central steps when assessing an
organisation’s readiness for SWP:
1. Determine your workforce planning capabilities
and maturity. It is essential to have a clear
understanding of what your business is capable
of and how this will evolve under a strategic
workforce model.
2. Outline realistic goals for your project. Build
on quantitative and qualitative activities such
as headcount planning and workforce analytics.
Research external workforce planning models to
develop a decision framework that will inform and
support the shift to SWP.
3. Consider the level of investment required. Do you
already have financial capacity in your headcount
budget, or will you need additional funding to
support your pilot? Will you need to build, buy or
borrow the expertise required to develop a
strategic capability?
4. Create a roadmap. Outline your ambitions for
change and plot key milestones along the way.
It’s important to account for tolerance within the
business; if your organisation is overloaded with
change initiatives, you will need to consider how
best to position SWP to avoid ‘change fatigue’
among key stakeholders.

10. 5. Establish clear roles for ownership and
accountability. Ensure your key stakeholders
understand the importance and complexities of
meeting performance expectations. Some may be
blissfully ignorant and need education.
Engaging the business
Strong leadership can help secure support from
stakeholders and ensure the success of your SWP pilot.
In the absence of a big-budget organisational buy-in or
a dedicated SWP team, it’s ideal to position your chief
human resources officer (CHRO) as a champion for the
initiative—someone who drives ownership among key
employees and has a clear vision for the organisation’s
strategic workforce capability.
Gaining stakeholders’ support is an important step.
For SWP to work, it needs to be embraced by people
throughout the business, from the boardroom through
to leaders in divisions such as finance, marketing,
operations and strategy.
If the organisation uses HR business partners to
align workforce practices with business strategy, it is
essential to gain the support of these partners from
the outset. It’s also worth involving key contacts from
customer groups, and other influencers. Consider which
people might be valuable allies. Who could help you
gain traction and carry out your plans for a strategic
workforce capability?
Gaining the buy-in of these advocates early on is an
important step toward the success of your initiative.
However, balancing ‘business as usual’ with future-
proof change is a delicate process. Traditional metrics
are not always the best indicators of future success, and
you will need to show stakeholders why and how this is.
BUILDING KNOWLEDGE AND CAPABILITY
/10

11. Prioritising customer outcomes
According to Anne Dibley, associate professor in
Marketing at Henley Business School, the key to
gaining support within the business is to discuss
ideal outcomes for customers, rather than products
or best practices.
This concept—that the provision of services rather
than goods is fundamental to exchange—is known as
‘service-dominant logic’ and will require stakeholders to
carefully consider whether their current processes best
serve customers’ interests.1
Ask: “Are we solving the right problems and creating
the right solutions for our customers?” Encouraging
stakeholders to consider such points will help them
shift their focus from legacy processes and products,
and help them think strategically about future value
and business priorities.
Rather than imposing your roadmap on the business,
offer a transparent view of your design and goals for
SWP. Share headcount and workforce analytics data
with key stakeholders, and show how these metrics
support their strategic goals.
Identifying strategic priorities and gaining the support
of the business are only the initial steps; the real
challenge lies in aligning your capabilities with your
workforce ambitions.
1 Vargo, Stephen L. & Lusch, Robert F. (January, 2004). Evolving to a new dominant logic for marketing. Journal of Marketing, vol.68, pp.1-17.
/11

12. ALIGNING
STRATEGY
AND CAPABILITYResist the temptation to create
a lofty vision statement for
strategic workforce capability,
which can make it harder for key
stakeholders to recognise specific
and attainable project goals.
/12

13. /013/13
Creating a simple, concise statement that
outlines your goals will help translate your
ambitions into tangible strategic workforce
competencies and capabilities.
Directional alignment
Directional alignment is a valuable consideration when
creating a strategic statement for your project, allowing
you to synchronise strategic workforce objectives with
the business’s internal and external priorities.
Aligning current capabilities with internal objectives
is key, but it is also important to account for external
stakeholders. Take care to consider how a shift to
SWP will serve the processes and practices of your
strategic partners and customer groups. This will help
you better understand the capabilities you need—
from both workers and partners—to support a
strategic workforce capability.
Your strategic statement should also account for
the organisation’s responsibilities to its shareholders
and analysts. Consider what the executive team
needs to address with these stakeholders to ensure
the business will remain an appealing and viable
investment for them.
Additionally, it’s essential for a strategic statement
to align internal and external priorities with workers’
psychographics. A candidate or employee might have
the correct qualifications for a role, but their personal
values and motivations will need to fit with those of
the business and its customers for their work to be
meaningful and valuable.
Once you have outlined your strategic goals, test
them out within the organisation, considering internal
processes and whether existing practices can support
your ambitions for SWP. Concepts such as the
McKinsey 7S Framework are useful for gauging the
strength of a strategic statement in this context.

14. Role segmentation
Separating critical and strategic roles from non-
strategic roles is the core process in building a strategic
workforce capability. Understanding which roles are
critical to the future of the business will help you
source workers with skills that can best support the
organisation’s strategic priorities.
Role segmentation is a useful exercise in this process
and involves clustering necessary skills and existing
roles into different groups, based on differing needs.
This allows you to think about the future in terms of
strategy rather than resources by considering where
there are unmet or under-served market requirements
and how the business might need to change to
maintain competitive advantage.
Once you have determined what you need to achieve
strategically, review all the roles within your pilot focus
area, identify competencies that are strategically
important, and develop a plan to support these roles
into the future.
Consider both contingent and full-time employees
when conducting this segmentation exercise, as
workers required for strategic roles may fall into
either category. Take care when distinguishing
between talent and workforce resources—all jobs
are important to the business but not all are equal,
and the most strategically significant roles might not
be the ones you expect.
Throughout this process, it can help to view your pool
of workforce resources as a portfolio of assets, with
workforce analytics and SWP forming bridges to the
operations, resourcing and procurement methods that
support your strategic plan (see Figure 2).
/14
ALIGNING STRATEGY AND CAPABILITY

15. FIGURE 2:
A HOLISTIC VIEW
OF WORKFORCE
RESOURCES
/15

16. Understanding workers’ needs
Segmentation helps marketers understand who their
customers are, and group them together according to
needs, priorities and the benefits they associate with
satisfactory outcomes.
In a similar way, segmentation can help you
understand what matters to strategically valuable
candidates. The more you know about their
capabilities, skills, motivations and personal values, the
easier it is for you to attract key people and place them
in roles that match your organisational priorities and
strategic needs.
Professor Moira Clark, head of strategic marketing at
Henley Business School, stresses that psychographic
and demographic segmentation is essential. She
believes that HR managers too often focus on
a candidate’s skills and competencies without
considering their attitudes and motivations, and how
these align with company values. Similarly, she notes
it’s important to strike a balance between people with
logical, rational skills and those with strong creative and
interpersonal skills.
“HR needs to be passionate about getting the people
with the right personal values and attitudes,” says Prof.
Clark. “We become obsessed with checklists, but I
think real competitive advantage comes from looking
at the attitudes, motivations and personal values of
workers. Anyone can recruit a candidate with the right
skills—but the intangible, tacit, right brain knowledge
that relates to creativity and relationships is what will
differentiate the business from its competitors.”
/16
ALIGNING STRATEGY AND CAPABILITY

17. Segmenting employees according to psychographics
and demographics can help you understand how
workforce implications such as style of working,
benefits and organisational design might affect their
experience within the business. This process will help
you understand workers’ priorities and align them with
those of your organisation, which helps to create more
meaningful engagement practices.
/17
Most companies these days are weakly
differentiated. One bank is like another,
one airline is like another, and each can
copy the other’s customer service and
IT strategies, products and services.
THE THING THEY CANNOT
COPY – THAT GIVES
THEM REAL COMPETITIVE
ADVANTAGE – IS THE
QUALITY AND HISTORY
OF THEIR RELATIONSHIPS.
It follows, then, that if you recruit the right
people, segment them in the right way and
make sure you cluster employees with
particular skills, competencies, attitudes and
motivations, you’re going to be much more
successful at reaching your target market.
– Dr. Moira Clark,
professor of strategic marketing
at Henley Business School.

18. PEOPLE
IMPLICATIONSWhich tools and
practices will best
support your strategic
workforce objectives?
/18

19. /019/19
With an SWP model in place, you will need to
devise a new framework to manage the flow of
resources through the organisation in a way that people
understand and accept.
The method you use to design and orchestrate SWP
in your business must support the business’s strategic
goals. In many cases, you will need to supplant
best practices with frameworks that better suit the
organisation’s strategic workforce priorities.
It’s also essential that your organisational design
and people practices allow for changing worker
psychographics, and support the practice of matching
right-brained and left-brained workers or resources
with roles that suit their capabilities. In other words,
you need to let workers engage with you on their own
terms, while placing them in roles that make best use of
their psychographic strengths.
Human Capital Institute’s (HCI’s) 6B talent framework is
useful when applied to organisational effectiveness (see
Figure 3). Buying external resources or workers through
traditional hiring practices and borrowing necessary
skills in the form of consulting, outsourcing, and
contingent labour can help meet your organisation’s
strategic need to acquire talent.
The framework then breaks talent management into
four categories:
• Building or developing talent within
your organisation
• Binding or retaining workers critical to your
strategic goals
• Balancing contingent and permanent, strategic
and non-strategic roles
• Bouncing low-performing or unproductive roles
and re-skilling workers who have ‘old’ skill sets.

20. Frameworks such as this can help you gain a holistic
view of existing workforce resources within the
organisation, while accounting for strategic priorities
in talent acquisition and management, and
psychographic variations among employees.
Communication for continuity
Frequent and regular communication with specific
business leaders is critical to ensuring your strategic
workforce initiative is not treated as a one-off project.
Your pilot needs to characterise the way your
organisation will conduct business moving forward.
Communicating with key stakeholders about your
successes and project milestones helps convey the
message that SWP is a powerful, active initiative
capable of driving change and delivering positive
outcomes. HR leaders will also benefit from
translating strategic priorities into activities that
resonate with leaders.
Aligning process with practice and publicising the
results is an effective way to gain internal traction
with SWP. But how do you demonstrate the return
on investment (ROI) to shareholders, analysts and
the board?
/20
PEOPLE IMPLICATIONS

21. BUSINESS OPERATIONS
6B TALENT PLAN BUILDBUY BORROW BIND BALANCE BOUNCE
HR/BUSINESS
STRATEGIC
LEVERS
HUMAN CAPITAL PRACTICES
TALENT ACQUISITION TALENT MANAGEMENT
/21
FIGURE 3:
HCI’S 6B TALENT
FRAMEWORK

22. EVIDENCE-BASED
HUMAN
RESOURCES
Return on investment
is an essential piece of
the strategic workforce
puzzle. So how do you
measure the effect SWP
has on your business?
/22

23. /023/23
Evidence of your pilot’s success will be important
in promoting uptake of SWP in other parts of the
business. Using workforce analytics to create a platform
for EBHR is an essential step in gaining buy-in from
stakeholders inside and outside the organisation.
As you roll out your project, use workforce analytics
to track changes in key metrics such as fulfilled
strategic objectives, worker satisfaction, and
retention. You should also take care to measure key
organisational health metrics so you can demonstrate
the organisational effectiveness of your SWP pilot.
These should be both qualitative and quantitative, and
comprise an effective blend of leading, lagging and
public performance indicators.
Implemented well, SWP will help to fill key roles with
suitable candidates who will likely perform more
effectively than before. To determine whether your SWP
plans are on track, you will need to ask a few questions:
Are workers in key roles performing more effectively
following the pilot? Have you seen better rates of
retention in roles previously plagued by high turnover?
Building a business case
The ability to create a business case for strategic
workforce capability—both for internal departments,
and for external shareholders and analysts—is critical
when scaling your SWP initiative beyond the initial
pilots. There are three key considerations at the core of
any strong business case:
1. How is your initiative relevant to the overall
business strategy?
2. What impact will it create?
3. How will you secure the support of stakeholders
throughout the business?
With a successful pilot behind you, creating a business
case will help guide the development of strategic
workforce capability throughout your business.

24. When will your
organisation turn
speculation about
the benefits of
SWP into actions
and tangible
outcomes?
CONCLUSION
Adopting a model for strategic workforce
management is a major undertaking for any
organisation. It requires careful planning and intricately
aligning business objectives with stakeholder
priorities—within and outside the organisation.
Yet SWP holds great rewards for businesses intent
on securing key workforce resources to support their
strategic priorities, reduce risk and grow competitive
advantage in future.
If you’re intent on establishing SWP in your business,
we recommend you follow these four core steps:
1. Start small – the secret to successfully creating
a strategic workforce capability in your business
is to focus on the functions likely to yield
promising results.
2. Articulate your goals – gauging current capabilities,
considering future goals, and engaging leaders
and partners with a compelling strategic statement
will help you garner core support for a strategic
workforce pilot.
3. Segment roles and resources – by segmenting
roles and resources according to strategic priorities,
worker capabilities and psychographics, and
integrating internal and external priorities with HR
processes, you can begin to align existing workforce
capabilities with strategic priorities.
4. Measure the results – apply workforce analytics
to build a platform for EBHR, and use key success
metrics to support a business case for SWP in other
parts of the organisation.
/24

25. Carefully targeted communication is key throughout
this process—whether you’re clarifying strategic
goals and aligning them with business priorities, or
implementing new people-management frameworks
and demonstrating ROI. By communicating and
sharing key details throughout the project, you can
establish a groundswell for SWP that will ultimately
support the business’s competitiveness and help
mitigate risk in future.
FIGURE 4: A BIRDS-EYE VIEW OF SUCCESSFUL SWP
PREPARING
FOR SWP &
BUSINESS
STRATEGY
ALIGNMENT
CAPABILITY/
ROLE
SEGMENTATION
MONITORING &
REPORTING
> TALENT
MANAGEMENT
> ORGANIZATIONAL
DESIGN
> WORKFORCE
SOLUTIONS
ENVIRONMENTAL
SCANNING
ACTION
PLANNING
CURRENT-
STATE
ANALYSIS
GAP
ANALYSIS
SCENARIO
PLANNING/
FUTURING
STRATEGIC
WORKFORCE
PLANNING MODEL
/25

26. /26

27. /27
REGARDLESS OF
THE SWP MODEL,
YOU MUST
EMBRACE THE
INSIGHTS AND
COMPETENCIES
OF YOUR PEOPLE.
If you lack the internal
expertise for change
management, data analysis
and interpretation, and other
required competencies, you
must accept the need to bring
in those resources or external
consultants as required.
– Nina Ramsey,
CHRO, Kelly Services

28. ABOUT THE AUTHOR
Susan is a Principal and Supervising Consultant within the Global Centres of Excellence. Based in London,
Susan’s specialist topics include strategic workforce planning, human capital strategies and advising on
stakeholder engagement practices. Susan has extensive experience in the human capital sector, which
includes leadership positions in staffing operations, strategic account management, thought leadership
and has developed a CRM model with practices designed to support understanding, mutuality, trust and
longevity. The institutions where Susan has studied include Henley University of Reading, INSEAD Business School,
Cranfield University, Human Capital Institute and London Business School. She is HCI certified as a human capital
strategist and in strategic workforce planning. Susan is also a certified to deliver SWP Accreditation Courses developed
by The Human Capital Institute.
ABOUT KELLYOCG
KellyOCG®
is the Outsourcing and Consulting Group of workforce solutions provider Kelly Services, Inc. KellyOCG is a
global leader in innovative talent management solutions in the areas of Recruitment Process Outsourcing (RPO), Business
Process Outsourcing (BPO), Contingent Workforce Outsourcing (CWO), including Independent Contractor Solutions,
Human Resources Consulting, Career Transition and Executive Coaching, and Executive Search.
KellyOCG was named in the International Association of Outsourcing Professionals®
2015 Global
Outsourcing 100®
list, an annual ranking of the world’s best outsourcing service providers and advisors.
Further information about KellyOCG may be found at kellyocg.com.
© 2015 Kelly Services, Inc.