Many business owners aren’t in a position to hire full-time human resource expertise and your business may not need it, yet. But you do need a people strategy to be confident you’re evolving the structure of your business and hiring at the right time. That’s why we’d like to share a concept that HR experts use with leaders to diagram business needs and milestones with future employee requirements–the People Schematic.
People schematic defined
The people schematic is the first part of a successful people strategy that also includes a People Plan and People Metrics. Just like a successful people strategy, the schematic helps to assure that a business has the right people, in the right jobs, at the right time, for the right reasons. Also like the people strategy, a people schematic is a living, developing diagram that gets reviewed regularly alongside the people strategy and the company’s business plan.
The people schematic is one element of a broader strategic workforce planning process.
Components of a people schematic
The people schematic uses information from the business plan that includes
- the current state (number and types of employees vs. the business plan)
- the desired future state (number and types of employees vs. the business plan)
- business markers that indicate when key actions need to be taken.
The schematic is the plan used to close the gap between the current and desired future state. For those familiar with the traditional human resources lingo, this could be considered an extension or means to the development of a headcount or recruiting plan.
The people schematic is a graphed representation that shows the number and type of employees that will be needed over time against the business metrics that are used. The business metrics are different for each business. It could be the number of widgets necessary to be produced or the revenue needed to be generated. The metric could be the number of patients that need to be reached. It could be anything that the business deems to be its goal. However, two things are consistent regardless of the company’s product or service: the companies financials linked to the business plan, and the use of any and all metrics that measure key human resource information, such as turnover, time-to-hire, etc. The key point is that the schematic uses information derived from the business plan.
Drawbacks of not creating a people schematic
Is your business at risk if you don’t have a people strategy? Maybe not…initially. But it can catch up to you.
- Under-hiring can lead to excessive workloads on current staff, missing customer deadlines, and the inability to react to business needs or changes.
- Over-hiring can lead to financial stresses on the company, inefficiencies of the workforce, or put the organization in jeopardy that could result in layoffs or staff reductions.
- Not having the right people ready for the position at the right time for the business.
“Just-in-time” hiring is not easy and takes diligence. Factors such as manager input, recruiting ‘lead-time’, employee turnover and ‘lost time or opportunity’ need to be considered.
Evolve your people schematic along with your business
Naturally, as the business advances or encounters difficulties, you need to modify the people schematic and business plan. Actively review both documents regularly at the leadership level. Also critical is that your managers understand both plans because they hold knowledge and experience of your business that is critical to implementing an accurate business plan.
Important to note: Before determining your demand for external talent, identify gaps in skills and capabilities in your current workforce. Fill these gaps through internal mobility and ‘upskilling’ first. We’ll cover these topics as part of the People Plan in an upcoming blog.
Contact us if you have questions on a People Schematic.
Paradise Workplace Solutions, LLC works with business owners to improve productivity and profitable growth by aligning people strategies to the company’s business plan.