CHAPTER 7 ________________________________
A Road Map for Federal Strategic Human Capital Planning

Increasingly, federal agencies are developing strategic human capital (HC) plans to help them meet changing mission requirements and take a purposeful, long-term approach to HC management. The drive to do so is determined by several factors:

• The need for agencies to accurately forecast their future HC requirements based on the anticipated departure of thousands of baby boomers from government in the years ahead

• The need to streamline hiring and make government an “employer of choice” that is able to accommodate surges in job applications in economic downturns, as well as hire the best workers and compete with the private sector when the economy is strong

• The need for federal HC professionals to manage HC issues in a more comprehensive way, starting with recruitment and hiring, and encompassing retention, training, performance management, leadership development, succession planning, and employee retirement

• The HC requirements of the Obama administration, the Chief Human Capital Officers (CHCO) Act of 2002, and the Human Capital Assessment and Accountability Framework (HCAAF), the road map created by the U.S. Office of Personnel Management (OPM) for transforming HC management in government.

Successful Strategic HC Planning

What exactly is strategic human capital planning (SHCP), and what are the critical factors in effectively implementing SHCP within a federal agency? SHCP is a comprehensive, structured approach to assessing an organization’s current and long-term HC needs and making plans to meet them. It begins with thorough analysis of current workforce data—including demographic profiling, skill gap analysis, work climate assessment, and performance management analysis—and identifies the gaps between current capabilities and future needs. It then makes clear commitments to specific goals and objectives that close identified skill gaps and completes the process by developing implementation plans and assigning accountability for specific results.

To be successful, strategic human capital planning must:

• Focus on implementation

• Be tightly targeted in scope

• Be future oriented

• Make senior leaders accountable for results

• Create a clear set of planning steps.

Focus on Implementation

Most planning initiatives focus lots of time on plan formulation but don’t put enough emphasis on translating the good intentions of the formulated plan into action and results. Consequently, as agency leaders think about implementing strategic HC plans, it’s essential they follow through on commitments and set up the infrastructure to effect full implementation.

Tightly Target the Scope

Frequently, strategic planning activities generate numerous commitments (a.k.a. goals and objectives). But generating too many goals can be selfdefeating because it dilutes the ability of an agency to focus on just a few strategic priorities. One way an agency’s leaders can limit the focus of HC planning efforts is to be certain all commitments are directly mission driven. If leaders can’t directly link a goal to the agency’s mission, they shouldn’t include it as a planning objective.

Be Future Oriented

Some planning efforts deal with solving today’s problems in the future. In contrast, strategic human capital planning focuses on solving tomorrow’s issues today. Thus, an agency’s leaders must carefully answer certain key questions to ensure that planning efforts are truly future oriented. Among the questions to ask: “What will happen in five years if we continue to manage our HC resources the same way we manage them today?” And “What does our workforce need to look like in five years in terms of competencies, tenure, age, and diversity for us to fulfill our agency’s public mission?” As part of answering such questions, planners should review their agency’s strategic business plan and prepare responses in the context of that document.

Make Leaders Accountable for Results

HC planning is typically seen as the province of the human resources (HR) department. HR professionals do have an important role to play in supporting the HC planning process: providing HR data, designing defensible studies, and (in the federal government) advising on OPM and HCAAF requirements.

But HC management is a staff function that can’t drive organizational change by itself. By contrast, an organization’s line leaders have formal authority to effect real change in organizations. Not only do they possess daily decision-making power, they also have direct accountability for the actions they take. Consequently, it’s important that an agency’s line leaders be held accountable for HC plan implementation because they have the position power to influence others, align and assign resources, and follow through on HC issues. Accountability is further heightened when goals and objectives focus on specific, measurable, and time-bounded results.

Create a Clear Set of Planning Steps

A good planning process begins with the end in mind—a clear statement of the desired outcome (result) and a clear description of the steps required to get there. Good planning also follows a distinct road map. When that road map is graphically depicted, it helps focus people’s attention on key activities and milestones.

With that in mind, look at Figure 7-1. Here you see various inputs to planning that are key to shaping the planning process at the start of a planning initiative. Next, agency leaders must articulate specific HC goals, metrics, strategies for achieving goals, and implementation plans. These represent specific commitments to action. Finally, leaders must put certain implementation enablers in place to move from successful planning to effective plan implementation.

Inputs to Planning

In the inputs to planning phase, an agency’s leaders undertake eight critical activities:

1. Conducting a workforce analysis. This involves a comprehensive assessment of an organization’s workforce, including consideration of factors like workforce age and gender diversity and work-related elements like tenure and turnover. An analysis of these factors can yield a profile of an agency’s current and anticipated future HC resources.

2. Reviewing relevant business plans. Successful HC plans align human resources in pursuit of strategic business goals. Accordingly, a careful review of an agency’s strategic business plan can identify the business challenges and commitments for which human capital is required and organized within an agency. It can then shape the definition of HC initiatives to address these challenges and recommend how resources should be allocated to address critical HC requirements.

3. Factoring HCAAF requirements into SHCP. OPM has published a comprehensive framework for monitoring progress in HC management: the Human Capital Assessment and Accountability Framework. The five major HCAAF elements provide an organizing framework for identifying commitments in an agency’s strategic HC plan.

4. Reviewing third-party analyses. Public scrutiny of federal agencies yields independent assessments that affect HC management. For example, studies by the U.S. Government Accountability Office (GAO) and score reports from OMB-PART (the U.S. Office of Management and Budget Program Assessment Rating Tool), which assess agency program effectiveness, offer important insights into the challenges that should be addressed in an agency’s strategic HC plan.

5. Undertaking an HC future scan. This exercise asks agency decisionmakers to anticipate future trends and factors that will affect their agency before they define strategic goals and objectives.

6. Completing an HC strengths, weaknesses, opportunities, and threats (SWOT) analysis. This involves synthesizing all current-state assessments into one set of conclusions, as well as looking internally to determine what strengths and weaknesses affect the agency’s management of its human capital. It also involves looking externally to determine what opportunities and threats to effective HC management exist in the agency’s environment.

7. Incorporating commercial best practices. Private-sector organizations often experiment with innovative HC practices, and government agencies can benefit from examining the most successful of these. Many won’t meet government requirements or operating constraints, but some may unfreeze thinking and offer new ways of operating.

8. Assessing current HR programs. A popular way to initiate the strategic HC planning process is to conduct a baseline assessment of HR functions to assess the ways in which HR currently meets the needs of customers in an agency’s various business units.

Commitments to Action

Next comes the commitments to action phase. This phase includes:

• Vision setting. It’s critical that agency leaders articulate a vivid, specific description of the desired outcome the agency is seeking to accomplish with SHCP.

• Setting strategic goals. Establishing HC goals is the primary way to achieve an agency’s HC vision. It requires discipline and organizational focus to create goals that are directly linked to the HC vision and, in turn, to the agency’s mission. A good way to guide the definition of HC goals is to look at HCAAF requirements and ask: “How can our agency address HCAAF requirements in a succinct way?”

• Defining plan metrics. For each HC goal, agency executives should develop metrics by which work toward accomplishing that goal will be evaluated. Metrics focus an agency’s leaders on specific measurable results they want to achieve.

• Creating strategies to achieve goals. A strategy statement outlines the basic approach an agency will take to reach a goal.

• Defining objectives. Objectives are the specific means by which each HC goal is accomplished. They represent one more level of granularity in the planning process beyond the setting of strategies. Objectives operationalize outlined strategies into statements that delineate who will do what by when.

Implementation Enablers

All agencies experience some difficulty in following through on strategic plan commitments, so it’s important to include other elements in the SHCP process to facilitate plan implementation. These include:

• Accountability plans. The HCAAF prescribes development of an accountability plan for all HC initiatives. Accountability plans detail the planning process. Typically, they take major initiatives and break them down into specific, short-term actions and results. They stipulate who is accountable for specific results and the timeframe for completion.

• Assignment of HC plan champions. HC strategic plans often suffer from lack of effective follow-through, so it’s important to assign plan champions responsible for full implementation in specific areas. Champions are senior executives, assigned by the senior HC decision-making team and accountable to it, who are responsible for clearing away obstacles to plan implementation and providing resources for plan completion. They are people who regularly report to the senior decision-making team and who have sufficient authority, organizational experience, and accountability to drive achievement of specific plan outcomes.

• Progress reporting. To support the work of HC plan champions, it’s important to put a formal process in place to monitor progress on a regular basis. Are champions making progress in achieving their assigned goals? What obstacles, if any, are they encountering as they work to achieve specific HC outcomes? Progress reporting helps busy administrators keep a focus on plan implementation—to identify areas of success as well as issues that may be impeding successful rollout of HC initiatives.

• Change management. Strategic HC planning is a broad-based organizational initiative that often involves transformation of an agency’s culture. To achieve this requires the cooperation of all organization employees. To secure that cooperation, senior leaders must be highly involved as SHCP champions, communicating the importance of SHCP to all employees and making the case for why it is important to the accomplishment of the agency’s public mission.

• Communication strategy. It’s also important to put communication strategies in place to drive changes in people’s attitudes and work behaviors and to create employee buy-in for new HC practices. Organizational research shows that strategic messaging to employees during times of change enhances employee engagement with business priorities and helps create tight employee alignment with organizational goals.

• Project management. Finally, successful implementation of strategic HC plans must be undergirded by a strong project management mindset, one that links individual HC goals and initiatives to overarching organizational priorities. A strong project management approach also increases the likelihood of sustained success with SHCP by codifying the use of specific HC best practices, facilitating continuous improvement in the administration of all HR processes, and aligning employees with the organizational mission.

Conclusion

Effective strategic HC planning consists of structured decision-making around specific HC goals and calls for strong leadership accountability and plan monitoring to increase the probability of successful plan implementation.

SHCP will assume increasing importance in the federal government in the years ahead, as government executives grapple with the HC ramifications of the looming “retirement cliff;” as government agencies increasingly compete with the private sector to hire new generations of college graduates; as the federal government deals with expanding agency missions in areas such as defense, intelligence, and homeland security; and as the White House, Congress, and American taxpayers continue to demand that government agencies focus on performance, accountability, transparency, and results.