Shell’s Workforce Planning
Execution Risks Analysis
Organization: Royal Dutch Shell plc
Industry: Energy
Revenue (Billions): US$318.8
Employees: 110,000
Headquarters: The Hague, Netherlands
Objective
Having defined the key talent resourcing implications of business strategy and identified future talent
constraints, Shell implements an initiative to identify and overcome the key talent management risks
to closing strategic talent gaps.
Description
The HR leadership team brings together core workforce data and local talent manager input to
identify the talent management risks to the organization’s ability to close strategic talent gaps. HR
and senior business leaders then use the evidence collected during risk analysis to identify which
talent management risks to address with a targeted intervention. Finally, the HR leadership team
continuously monitors and manages execution risks through a quarterly risk assessment session.
Key Teachings
Identify and respond to the key constraints in resourcing the business plan and the key talent
management risks to closing strategic talent gaps identified through workforce planning.
Engage senior business leaders in overcoming talent management execution barriers.
HRFR1AM0ZMH © 2008 Corporate Executive Board. All Rights Reserved. 1
Practice Driver
Having invested time and resources in defining the key talent implications of strategy and talent supply constraints,
Shell faces a challenge in identifying the risks to the organization’s ability to deliver the talent needed by the
organization and defines three responses: First, HR focuses on the long-term talent management risks to the
organization’s ability to close strategic gaps; second, HR engages business leaders in overcoming talent management
execution barriers; third, HR monitors workforce plan execution effectiveness.
Executing on Strategic Talent Gaps
Shell Proactively Identifies Three Key Responses
to the Challenge of Closing Strategic Talent Gaps
Problem Analysis
Organization fails to adequately
Problem respond to identified strategic
talent gaps.
Focus on immediate No process exists
Failure to get buy-in from
talent risks instead to monitor effectiveness
the business into
of longer-term of executing on workforce
workforce action plan.
execution risks. strategy.
1 2 3
Shell Focus on the long-term Engage senior business
Responses Ongoing monitoring of
talent management risks to leaders in overcoming
workforce plan execution
the organization’s ability to talent management
effectiveness.
close strategic talent gaps. execution barriers.
Source: Royal Dutch Shell plc; Corporate Leadership Council research;
HR Leadership Council research.
HRFR1AM0ZMH © 2008 Corporate Executive Board. All Rights Reserved. 2
Practice in Context
Shell recognizes that as well as diagnosing strategic talent gaps, the organization needs to identify and respond
to the risks associated with closing those gaps.
Strategic
Shell defines long-term critical talent constraints
to implementation of the organization’s strategy…
Shell’s Future Talent Risk Management Strategy
Translate Strategy Diagnose Define Risks to Talent
into Talent Implications Strategic Talent Gaps Management Execution
Strategy Translation Supply-and-Demand Risk
Scenario Forecasting Identification
Business Strategy
Local
Scenario Analysis Local
Talent
Data
Supply Demand Manager
Input
Input
Talent Implications
Objective Objective Objective
Assess talent implications of business Assess range of talent demand and Identify talent management–related
strategy scenarios. talent supply scenarios over time. risks to closing strategic talent gaps
and the HR and business levers to
overcome them.
Action Action Action
Definition of talent scenarios given Identification of range of long-term Identification of risks using core
strategic initiatives critical talent need scenarios and workforce data and local talent
assessment of internal and external manager input
talent supply gaps
Stakeholders Stakeholders Stakeholders
• Corporate HR • Talent Managers • Talent Managers
• Business Leaders • Business Leaders • HR Leadership Team
• Talent Managers • Internal and External • Business Leadership Team
Talent Resourcing
Source: Royal Dutch Shell plc; Corporate Leadership Council research;
HR Leadership Council research.
HRFR1AM0ZMH © 2008 Corporate Executive Board. All Rights Reserved. 3
Execution Review
…and identifies initiatives to overcome
the key barriers to closing strategic gaps
Shell’s Future Talent Risk Management Strategy
Overcome Talent Management Select Resourcing Monitor Workforce
Execution Barriers Strategy Plan Execution
Strategic Resourcing Ongoing
Review Analysis Strategy Execution Review
Shell
Strategic Review Output
Resourcing
Risk Action Owner Strategy
Objective Objective Objective
Secure business leader buy-in to decide Evaluate and select resourcing options Ensure workforce planning action items
risk interventions. for closing talent gaps. get executed with desired impact.
Action Action
Action Selection of the most appropriate Review of workforce plan execution
Identification of key talent management talent management response to talent against key goals and targets
risks to target and agreement on gaps
intervention and next steps
Stakeholders Stakeholders
Stakeholders • Talent Managers • HR Leadership Team
• HR Leadership Team • VP Resourcing and Development • VP Resourcing and Development
• VP Resourcing and Development • Internal and External Talent
• Business Leaders Resourcing
Source: Royal Dutch Shell plc; Corporate Leadership Council research;
HR Leadership Council research.
HRFR1AM0ZMH © 2008 Corporate Executive Board. All Rights Reserved. 4
Step #1: Define Risks to Talent Management Execution
HR leadership team brings together core workforce data from multiple sources which is combined with local talent
manager input to enable the identification of the talent management risks to closing strategic talent gaps.
Identifying Risks to Closing Strategic Talent Gaps
HR Leadership Team Brings Together Core Workforce Data
and Local Talent Manager Input to Support Identification of Talent
Management Risks to the Organization’s Ability to Close Strategic Gaps
Data Input Local Talent Manager Input
Talent Management Enquiry
1. What strategic talent gaps will be the
most challenging to close and why? (Please
specify talent group, volume, and timing.) Local talent
manager
HR collects data
feedback enables
from multiple 2. How will the shifts in the direction of the identification of
sources to identify business and key markets affect our ability
Sources of Core Workforce Data execution risks.
trends in talent to close strategic talent gaps, and what are
gaps and sourcing • Local external talent supply information
the implications for our talent resourcing
performance. • Third-party (e.g., candidates, agencies, strategy?
levers) feedback
• Internal talent supply information
3. What potential changes have you identified
from integrated HRMS
to talent management and organizational
• Employee survey data and feedback practices that would enhance our ability
• Critical talent demand analysis output to deliver the talent needed most by the
organization?
HR examines three common
talent management derailers to
closing strategic talent gaps. Talent Management Derailers and Risks
Suboptimal Suboptimal Talent Organizational Design
Talent Development and Misaligned with
Potential Recruiting Deployment Workforce Plan
Derailers
Examined What impacts how effective What impacts our effectiveness How is our organizational
Using local we are at attracting and in developing and deploying design misaligned with
data and talent recruiting critical talent? critical skills and competencies? critical talent needs?
management • Limited recruitment from • Inadequate internal mobility • Underutilization of talent
input, HR key developing markets • Inadequate critical skills available through third
surfaces talent • Lack of a targeted attraction development parties
Sample
management strategy • Inadequate local presence
Risks • Ineffective career
risks to closing to access talent
Surfaced • Overly localized management
strategic talent
gaps. recruitment • Ineffective mapping of talent • Poor local EVP delivery
to business needs
HRFR1AM0ZMH © 2008 Corporate Executive Board. All Rights Reserved. 5 Source: Royal Dutch Shell plc; Corporate Leadership Council research;
HR Leadership Council research.
Step #2: Overcome Talent Management Execution Barriers
HR leaders engage business leader sponsors in identifying appropriate responses to key talent management risks to
closing strategic gaps. Shell typically targets three to five risk interventions, and criteria can include the intervention
has a high impact, is affordable, and has manageable human capital and business risks attached.
Addressing Key Execution Barriers
Hr Leaders and Business Leader Sponsors Identify Appropriate Interventions
to Target Against Key Talent Management Risks to Closing Strategic Talent Gaps
Strategic Review Output
Business leader sponsors and HR Business leader sponsors and
leaders use evidence collected during HR identify the expected impact
talent management risk analysis to on execution effectiveness and
support intervention identification. assign ownership.
Strategic Review on Workforce Planning Execution Risks
Impact on Execution
Risk Intervention Considerations Responsibility
Effectiveness
Redirect expatriation Increased flexibility of
Limited Recruitment
process to better exploit global talent pool enabling Rising costs from VP Resourcing and
from Key Developing
key critical talent centers faster critical talent expatriate workforce Development
Markets
in developing markets deployment
Increase control of Reduce wage inflation
Increased attrition caused
Inadequate internal job market for projects in remote VP Resourcing and
by increase in corporate
Internal Mobility to enhance talent areas and increase talent Development
control
deployment effectiveness availability
Target segmented Increase share of highest
Lack of a Targeted employment value caliber graduates at Loss of graduates from
Head of Recruitment
Attraction Strategy proposition at the expense of talent markets not targeted
highest-yield markets competitors
Under-Utilization Define guidelines Utilization
Loss of control, quality
of Talent Available for more effectively of critical talent Business Talent Managers
issues, and IP issues
Through Third Parties using third-party talent pools of third parties
Intervention Session
Business leader
Shell typically targets three to five participation enables HR
risk interventions. Criteria can include: HR Business to gage the flexibility
• Intervention has a high impact; Leaders Partner of the business toward
• Intervention is affordable; and Sponsors specific interventions and
secure sponsorship for
• Intervention has manageable human
the implementation.
capital and business risks attached.
Background
Objective: Identify interventions to target key talent management risks to closing strategic talent gaps.
Participants: Strategic review is led by HR VP for Resourcing and Development and supported by business leader sponsors.
Time Frame: Occurs every two to five years; in a review year, it takes place after strategic talent gaps have been identified, but before
the resourcing plan has been created.
HRFR1AM0ZMH © 2008 Corporate Executive Board. All Rights Reserved. 6 Source: Royal Dutch Shell plc; Corporate Leadership Council research;
HR Leadership Council research.
Step #3: Monitor Workforce Plan Execution
The VP of Resourcing and Development meets regularly with the Global Talent Network to review workforce plan
execution. The VP of Resourcing and Development then reviews workforce plan execution with the rest of the HR
leadership team on a quarterly basis.
Continuously Monitoring and
Managing Workforce Plan Execution Risks
HR Leadership Team Meets Quarterly to Review Workforce
plan Execution Performance and Address Emerging Risks
Quarterly Workforce Plan Execution Meeting
Checklist for Execution
Monitoring Agenda HR Leadership Team Performance Information
• Analyze progress in execution of Analyze progress in execution of
divisional workforce action plans. divisional workforce action plans.
• Evaluate effectiveness of interventions Evaluate effectiveness of
into the talent management risks to interventions into workforce plan
closing strategic talent gaps. execution failure.
VP Resourcing
• Identify and respond to significant and Development Identify and respond to significant
emerging interim barriers to emerging interim barriers to
execution. workforce plan execution.
Execution Meeting Output
Workforce Plan Execution Meeting Output
• Updated and amended workforce Workforce Action Plan
action plans Buy Align Build Retain
Risk
• Updated strategy for workforce Intervention
plan execution interventions Update
• Action steps with responsibility Interim Barriers Review
assigned to tackle emerging Barrier/ Action Owner
Risk Steps
interim barriers to execution
HRFR1AM0ZMH © 2008 Corporate Executive Board. All Rights Reserved. 7 Source: Royal Dutch Shell plc; Corporate Leadership Council research;
HR Leadership Council research.
Implementation Tips
• Risk interventions need to be supported by the relevant
business leaders and the executive team.
• Workforce planning should be driven by ongoing two-
way interactions between HR and the business to identify
and respond to strategic talent gaps and jointly overcome
workforce plan execution barriers.
• Workforce planning at Shell takes place at the business
unit level with different flavors of workforce planning for
very different business unit growth dynamics. A common
template is used to deliver workforce planning insights and
action plans to the center.
HRFR1AM0ZMH © 2008 Corporate Executive Board. All Rights Reserved. 8
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