Planning strategic competences of the future
July 2018
HR long-term strategic planning as a key enabler of company success

Different companies from different industries have been linking HR planning with corporate strategy, but how could HR become an enabler of success?

While most often, HR planning is focused on workload management and the short term (or at least the medium term, according to the strategic planning horizon), over the next 5 to 10 years many relevant emerging trends could affect the business: technology switch, multi-channel sales, the customer of the future, industry convergence, open innovation.

The critical competences needed today will probably not be the same in the next 10 years, but it is important to think about how to grow them in the company now! It is critical for leading companies to retain critical competences (to avoid adverse impact on the make or buy business model).

Through a cross-industry survey, Arthur D. Little has investigated the role of longterm strategic planning in HR as a process aimed at:

  • Mapping business strategy-related competences as of today and the roadmap based on expected evolution
  • Defining a long-term HR competence evolution plan beyond the 5- to 10-year horizon
  • Defining an action plan to bridge the gaps

 1. The role of competence management in the current scenario

Disruptive changes have been affecting several industries, and the profile of human resources required to compete in the short term is not likely to be the same in the next 5 or 10 years.

These changes are mainly related to the digital transformation revolution and the development of the Internet of Things across all industries that interest players. This includes several hot topics, such as:

  • New emerging mobility concepts (OEM, utilities, telco, ICT)
  • Evolving customer needs and purchasing behaviors, as well as data analytics (consumer goods, OEM)
  • Virtual manufacturing and simulation, augmented reality, collaborative robots (OEM, utilities, oil & gas, etc.)

Furthermore, industry convergence trends, open innovation models and the raging war for talent are driving the main issues HR departments have to face.

Competences are becoming more and more crucial in big corporations’ life cycles in the short term, and even in the medium and long terms when following the targets of strategic plans. The HR department has to support top management in assuring critical competences, which involves answering the following key questions:

  • Which competences are strategic?
  • How to map competences within the company, today and in the future?
  • When will these competences become relevant for achieving strategic targets?
  • How to acquire or internally develop strategic competences?

In the past, HR plans have been often considered projections of companies’ headcounts, without highlighting the evolution of resource profiles. However, considering the reshaping many businesses are experiencing and ongoing digital transformation across all industries, this is not enough. HR plans have to be developed side by side with strategic plans, becoming “two heads of the same body”

During our project experiences, we always face these issues with understanding of the importance of a well-structured HR strategic planning process. For this reason we launched a crossindustry survey to collect different points of view regarding the relevant elements of HR long-term strategic planning, in terms of:

  • Competence mapping
  • Competence evolution
  • Link between strategy and competences

Indeed, managing competences correctly within an organization allows exploiting all potential for a defined transformation plan and makes changes in the way companies operate real, in order to evolve towards more competitive business models. Lack of HR competences usually means failure of a company transformation project, even after huge investments in IT assets, personnel effort and advisory services.

Building the right competences to face the competitive landscape successfully requires having appropriate HR processes in place in the organization.

Most HR processes – such as recruiting, training, assessment and incentives, and talent gaps – are generally focused on competences in the short term. However, the medium- and long-term perspectives are becoming more and more important to anticipate and face changes in the competitive arena.

For this reason, we have observed greater interest from big companies in different industries in HR strategic planning topics as fundamental enablers of strategic initiatives.

These companies recognize the stronger role of HR in the planning process, and the need for different approaches and tools to plan not only headcounts, but also new competences to achieve the business plan’s targets.