2014 Workforce Planning and Analytics Conference Closing Keynote
Attendees of 2014 Workforce Planning and Analytics Conference in Alexandria, Virginia were treated to a passionate closing keynote on the current state of the economy and workforce planning from Robert Reich, Author, Former Secretary of Labor, and Chancellor’s Professor of Public Policy at the University of California at Berkeley. Prof. Reich laid out the big challenge facing market given that 76 percent of the middle class self identifies as living paycheck to paycheck when consumer spending makes up 70 percent of the economy. Explaining why workforce planning matters, Reich stated “It’s so important because the only barrier to entry (in the market) is your talent – your people.” Most of the other functions for business – advertising, marketing, finance, are readily available to all a firm’s competitors.
Why Is It So Hard to Plan?
While acknowledging that public policy plays a role in some of the economic uncertainty, Reich says the larger issue is that “everything is coming from everywhere.” Firms in the market seek out the low cost, high productivity, high value assets. Businesses must be nimble and are constantly looking for deals in a market that is changing rapidly. Organizations are moving from fixed costs to variable costs to remain competitive and labor is seen as the biggest fixed cost. Demographics are also playing a large role as well with an aging population and a shrinking talent pool. Healthcare costs are rising faster than inflation leading to a need for more preventative healthcare. Planning takes time and contingency planning takes even longer but the current situation is one where most CEOs are only thinking about the next quarter or six months out.
It Must Be a High Priority.
Given the challenges, Prof. Reich is still optimistic. When talking to the C-suite, HR leaders can point to “relational capital” as a value and reason to invest in talent. The relationships and trust that build up over time lead to more productive and efficient work between workers. He confesses that the metrics aren’t there yet to show that value, but he can point to several companies who have leveraged relational capital successfully. Reich finished his keynote encouraging the attendees calling HR, “the custodians of the most important capital that exists in society,” and suggesting that workers should be treated as assets to develop and not costs to be cut.