Annual organization health checks make all the difference
Even when you feel physically and mentally fit, regular health checks are always beneficial. They ensure you are in the best shape possible, identify potential areas of concern, and provide guidance on what you can do differently to ensure your long-term health.
Similarly, organizations of every shape and size benefit when they conduct regular health checks. While it’s nice to think you can sit back and presume your organization is as healthy as you and your leadership team thinks it is because there are no visible red flags, the past three years have shown the importance of keeping your fingers on the pulse of what’s happening in your workforce.
Recently, a U.S. winery’s HR leadership team leaned on a “better safe than sorry” train of thought as they considered their organization’s structure. It seemed to be in good working order, and there were no pressing HR “health” issues. Yet, the leadership team wanted to investigate what was happening within the business as well as get a sense for how similar companies within their industry were approaching career leveling and employee distribution – and how their own company’s structure compared.
The leadership team explored the information in WTW’s Workforce Analytics Reports to see if they could find the information they needed about current market practices around organizational design. Ultimately, the winery made the decision to leverage both the reports as well as human intelligence from WTW’s Custom Salary Data and Analytics team to get a more tailored perspective.
Identifying different job levels often starts with looking at job categories and titles to evaluate whether an organization is placing and naming different jobs into levels properly. For the U.S. client in this case example, we looked at both.
WTW’s surveys incorporate a consistent, global methodology based on job leveling and job architecture. This process allows for consistent leveling across career bands and functions and increases the focus on level matching, thus providing an apples-to-apples view of job levels across organizations, industries and geographies.
This broader view allowed the client to identify which levels within the organization should be investigated. The result spurred the leadership team to focus on executive and middle-management career levels, including a review of the headcount for each of those levels across functions.
The WTW team started the organizational health check for the U.S. winery by selecting comparable industry peers that would provide relevant and credible insights. This required a selection of firms that submitted a representative sample of their entire employee population to WTW’s annual salary surveys – the very data sources that feed the Workforce Analytics Reports.
The client also wanted broader insights that expanded past direct industry competitors. Aside from food and beverage companies, the leadership team wanted to look at other peers for their talent and broader business space, including consumer products companies. Ultimately, a peer group of 26 organizations was selected from various industries including food and beverage, manufacturing, hospitality and retail.
To provide the employee distribution at each executive reporting level, the WTW team looked at the organization as a whole and split by function. This also allowed us to compare different department ratios and job responsibilities.
Some functions were taken as standalones, such as Legal, HR and IT. In other cases, we combined similar functions, like Finance and Accounting, into work areas to match the structure of the organization and create a more accurate comparison. For each peer company, we then calculated the headcounts of each executive reporting level as a percent of total employee population within each function and developed summary statistics for the total peer sample.
The same process was followed to provide the headcount distribution and percentages for the middle-management levels.
The last piece of this analysis was identifying the ratio of individual contributors to managers within each established function or work area. This was key to providing the client:
The data and results shared with the client served as an organizational health check, allowing the leadership team to compare their structure against the market. The analysis provided insights on how well the winery was allocating internal resources to different functions and levels and whether the mix of executive and management levels to individual contributors was market aligned. These assessments allowed the client to recognize pain points in their staffing, review roles and responsibilities and the allocation thereof, address right sizing of the organization structure, and ultimately create a more efficient career leveling framework and properly shaped and fit organization.
Organization health checks play a pivotal role as continuous improvement is a priority. Balancing market data intelligence with relevant, decision-quality and tailored insights ensures your people are distributed efficiently and effectively, and that your business is performing at its best. That alone will extend the health and livelihood of any organization.
