Approach
CalPERS applied a comprehensive and inclusive approach to workforce planning. Our approach included an environmental scan of the current workforce and data collection from team leaders from the unit level up to our chief executive officer. Our Senior Leadership Council conducted an enterprise-wide SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis in April 2016 and our Enterprise Strategy and Performance Division interviewed our stakeholders to produce the External Stakeholder Engagement Report. Both reports were provided to all leaders for consideration as they executed strategic workforce planning.
CalPERS implemented workforce planning in five phases (Figure 3).
Figure 3: Workforce Plan Five-Phase Approach
Collect Data
Based on lessons learned from a workforce planning pilot program completed in fall 2016, five data elements were collected from each team leader, from the unit level (first line managers and supervisors) up through the branch level (including division chiefs and executives), to identify workforce gaps and trends across the enterprise:
- Team member separation forecast – determined by three factors: retirement forecast, if the team member is at maximum salary, and any career goal information ascertained through regular team member communications
- Position gaps – any gaps pertaining to the position (e.g., requires specialized skillset, having no career advancement opportunities, training plan, or procedure guide)
- Gaps in incumbent development – any developmental opportunities for the incumbent in the position (e.g., training opportunities)
- Unit gaps – any gaps pertaining to the entire unit/section (e.g., training for any upcoming changes in process or procedure)
- Future workforce projections – whether the team leader forecasts any changes in staffing (e.g., adding, reclassing, or reducing any positions)
Each challenge includes an option to create an action plan that team leaders can implement and refresh on an ongoing basis. The data from team leaders was collected in May 2017, and compiled and analyzed using a web-based application, the Dashboard. The Dashboard maintains the workforce data collected from team leaders and rolls up to the division, branch, and enterprise level. We achieved a 97 percent completion rate across the enterprise for team leaders completing their unit assessments. This above-benchmark level of participation provided the baseline needed for team leaders to analyze trends, risks, and formulate action plans to mitigate those risks.
Identify Challenges
The Dashboard streamlined data collection and analysis. A Workforce Profile in the Dashboard was made available to our executive team, providing an overview of each of their teams' assessment results.
Six themes emerged from the 26 challenges identified by our executive team:
- Difficult to recruit
- Loss of knowledge
- Training and development gap (including leadership)
- Team engagement gap
- Inefficient processes and misaligned resources
- Succession planning
Engage Steering Committee
The Steering Committee was established to prioritize the challenges identified by the executive team. The Steering Committee is made up of 19 senior leaders at the Staff Services Manager III and equivalent levels, up through the division chief level. The Steering Committee was a diverse and inclusive group of leaders from across the enterprise, with representatives from every branch, across multiple divisions and business areas within CalPERS. Not only did each branch within our organization have representation on the Steering Committee, but specific program areas within our branches were represented. We felt it was important to bring a wide breadth of institutional knowledge to the conversation. This diverse committee provided perspective from a variety of operational and administrative areas in support of our priorities for the next four years.
The Steering Committee identified these top three themes as the most critical workforce gaps:
- Difficult to recruit
- Loss of knowledge
- Inefficient processes and misaligned resources
Develop Strategies
The Steering Committee met for three facilitated sessions to conduct root-cause analyses on the top three themes. The Steering Committee was guided through brainstorming exercises to identify factors contributing to our workforce challenges. Root-cause analysis proved helpful in identifying the true causes of our top workforce challenges, delineating from perceived or commonly accepted causes.
The HRSD's assistant division chiefs over Talent Acquisition, Talent Engagement, Personnel Operations, and Strategic Solutions, together with some of their subject matter experts, participated in the facilitated sessions with our Steering Committee members. HRSD and our business end users worked together to identify the root causes of our challenges. This group then brainstormed possible strategies to mitigate these challenges, giving hiring managers the opportunity to voice the changes they would like to see. Our HRSD team further helped balance assumptions and constraints surrounding civil service rules, laws, and regulations, and talent management best practices.
The facilitated sessions with our Committee and HRSD representatives resulted in high-impact, actionable strategies that are outlined in the Goals and Strategies section. We will track and measure these strategies annually.
Prioritizing Workforce Themes
CalPERS is a dynamic organization with nimble programs enabling us to provide innovative solutions for our workforce challenges. While the Steering Committee voted to move forward with three challenge themes included in the Workforce Plan with measurable, reportable strategies, the three remaining themes (engagement, training and development, and succession planning) continue to be addressed through established channels and preexisting programs.
Team Engagement Gap
The team engagement gap is addressed through the first annual Employee Engagement Survey, which was implemented in September 2017 and will be conducted annually. For the first iteration, we achieved a 70 percent participation rate. The survey insights below highlight key drivers that engage our team members, which help identify areas of success and areas where we can improve. As illustrated in Figure 4 below, each engagement driver for CalPERS is above the benchmark for organizations surveyed by McLean & Company. Initial survey results have guided us in developing action initiatives at the organizational level and tailored action initiatives at the division, or team level.
Training and Development Gap
The training and development gap is centered around leadership development and is mitigated through ongoing enhancements to the program by the HRSD Leadership Development team. The team has implemented new initiatives such as the Emerging Leader Pilot Program, brown bag conversations with our CEO, Leadership Essentials and Direction for Your Emerging Role (LEADER) performance metric measurement, and expanded LEADER coursework to meet the government code GC19995.4, which requires 20 additional hours of ongoing training every two years. We delineated the team leader training and development gap from team member training and development. CalPERS already offers a comprehensive training program, which continues to serve our team members well and adds tremendous value to our organization. This was validated in the Employee Engagement Survey where 60 percent of team members cited learning and development as high performing, which is 13 percent above the industry benchmark.
Succession Planning
The challenges with succession planning that emerged from our workforce analysis are being addressed in our 2018-22 Succession Plan. As part of our long-term efforts to maintain continuity in CalPERS' leadership and mitigate talent risk, our succession planning program actively develops leaders to compete for future vacancies in senior leadership and executive positions. Through the program, participants embark on a learning journey to gain the experiences that matter most in preparing them to lead at a level of greater scope and responsibility. The cornerstone of this program is CalPERS' Leadership Competencies, in which all leaders must demonstrate high proficiency. Each of the seven competencies is described by specific knowledge, skills, and behaviors that are needed to produce desired business results and carry out CalPERS' mission.
Other Considerations
While strategies for each enterprise-level goal are being implemented over the course of the Workforce Plan, team leaders at all levels created action plans for their position, incumbent, and unit level gaps. Team leaders completed their unit assessments in May 2017 and will have the opportunity to refresh their workforce assessments on an ongoing basis using the Dashboard. We developed the Workforce Planning Toolkit (Toolkit) to help team leaders assess their workforce needs and execute their action plans in real time. Nationally, nearly three-quarters of business leaders report that they have been unable to meet business goals because poor workforce planning led to talent shortfalls (HBR/Visier, 2015). Our framework and approach ensures workforce planning remains a continual process to align the needs and priorities of the organization with its workforce to sustain long-term success.
CalPERS is expanding our Diversity and Inclusion (D&I) program to recruit and empower a broad range of talents as part of the Strategic Plan. The renewed focus includes implementing best practices for hiring, capturing self-identifying data, and expanding partnerships with organizations and educational institutions to elevate our visibility as a destination employer. To learn more, view the full Diversity & Inclusion Annual Report. CalPERS is dedicated to developing leaders who can effectively create and sustain a culture of inclusion with the changing demographics of the CalPERS workplace and marketplace. We applied these principals and D&I best practices to our workforce strategies, where applicable.
We redefined the concept of retention and turnover to our Steering Committee when prioritizing our top challenges, and identified turnover as a normal and healthy part of our business. Our turnover rate for FY 2016-17 was 10.4 percent, and has consistently been between 8-10 percent over the preceding three years. This rate is consistent with similar organizations like the California State Teachers' Retirement System (CalSTRS), which has an annual turnover rate of 8.17 percent (CalSTRS, 2017). Turnover is expected in today's market. A survey of "more than 770 college and university student-members between the ages of 18 and 25" shows those entering the workforce "expect to work for many companies" (Robert Half, 2016) over the course of their careers. Our goal as an organization is to continue to focus on reducing turnover, but also highlight strategies that mitigate the negative impacts of turnover, by asking the following questions:
- What is the most challenging part of turnover?
- Are there opportunities to improve the hiring process and onboarding of new team members?
- Are there opportunities to improve the comprehensive training and mentoring that goes into onboarding a new team member?
- Is the most challenging part of turnover struggling through talent pools that are either too large or too small with candidates lacking the necessary qualifications or competencies?
- What can we do to improve our candidate pools?
These questions, together with their answers, helped frame the goals and strategies intended to mitigate our top workforce challenges at CalPERS by looking at challenges differently, highlighting our current resources, re-engaging established programs, and providing innovative solutions.