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Workforce Segmentation

The AWS Skills-Based Model

Segmentation is a fundamental concept in business. Just as a marketer segments their products and clients, so the same concept should be applied to the workforce. One size doesn’t fit all!

Most organisations segment their workforce on a job level or hierarchical organisational basis or on a job cluster/family basis. However these segmentation approaches are potentially flawed or limited for a variety of reasons.

Firstly two jobs/roles may be on the same level in an organisation or within the same job family but have widely different impacts on business outcomes. Some roles may be “make” roles and some may be “buy” roles. As such, they will have very different Employment Value Propositions (EVPs), as well as turnover cost implications.

Secondly with most organisations continuing to invest in talent/roles by hierarchical level, and not by value creation and strategic impact, the danger is that over time, this results in an underinvestment in some roles and an overinvestment in other roles.

Segmentation and role differentiation lie at the heart of developing a workforce strategy – making a choice about the relative importance of roles to the business.

Our AWS Skills-Based Workforce Segmentation Model, adapted from the work of Lepak and Snell (1999), provides a basis for analysing and segmenting roles according to two dimensions of skills:

  • Skills value and their impact; and
  • Skills uniqueness.

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Valuable skills either create lower costs, increased revenue, or innovation. They comprise up to nine value drivers, and based on the SSQ, jobs/roles
can be analysed according to the requirement and impact of these value drivers. These drivers are: (1) revenue/sales, (2) stakeholder relations, (3) cost and efficiency, (4) quality, (5) innovation, (6) organisational capability, (7) reputation/risk management, (8) financial, and (9) processes/systems.

Unique skills are organisational specific, unlikely to be found in the open market, hard to replace, and hard for competitors to imitate or duplicate. These skills need to be nurtured over time, given that they are not developed and acquired overnight. Hence organisations are more likely to invest in the education, training, and development of these skills.

Based on this model, roles may lie in one of four skills quadrants:

(1) Criticals – high value and uniqueness;

(2) Professionals, Skilled and Semi-Skilled – high value and lower uniqueness;

(3) Doers – lower value and uniqueness; and

(4) Specialists – lower value and higher uniqueness.

Depending upon the skills quadrant in which a role falls, differentiated HR policies, including Employment Value Propositions (EVPs), levels of investment in talent, and the reporting of human capital data will apply.

The Skills Segmentation Questionnaire

This 52 item questionnaire enables roles to be assessed (and then plotted) according to two dimensions of skills:

  • Skills value and their impact; and
  • Skills uniqueness.

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This SSQ tool forms the foundation of a more “fine grained” strategic human capital management approach, providing the missing link connecting business and workforce strategies. It enables roles to be analysed and plotted according to a skills’ based workforce segmentation model. It provides an understanding of which roles create value and how.

There is provision to apply weightings on the skills value drivers, according to the business strategy, further identifying and highlighting those roles that are more important to the delivery of the business strategy and outcomes.

……. download a brochure to find out more