Success comes to those with the right skills. In Internal Audit, proactive planning of what knowledge and skills your team requires or will require to brace the future is key. Now is the time for strategic workforce management. But what does that really mean?
Strategic workforce management instils confidence
IA functions rely on their people and their individual skills and experiences. An IA function without the knowledge and skills of its team cannot deliver and provide the insights and value enhancements key stakeholders expect. Companies often have workforce plans in place, however, most plans:
- only exist on paper and lack the necessary refinement
- do not or only marginally involve IA functions
- are either not or insufficiently aligned with stakeholders’ expectations and insights
- do not incorporate future developments and challenges in an organisation.
These factors can have a negative impact on the effectiveness of workforce management in achieving its objectives.
Workforce management includes proactively assessing, analysing, planning and developing the skills and knowledge that your team needs to fulfil their roles. In our experience, there is room for improvement in closing the gap between what workforce management can do and what it is doing.
Clever workforce management can…
- enable you to proactively assess the knowledge and skills your team needs in the future and prepare the required actions;
- give you the confidence that your function can deliver in high quality;
- be the basis for smart suggestion planning;
- motivate your people as the required skills have been clearly outlined;
- encourage an organisation to support its employees in their efforts to improve their skills.
Your company is changing in today’s disruptive environment. So is the know-how your Internal Audit team needs to perform. Your workforce management is therefore not a one-off exercise or a ‘let’s-get-that-one-off-the-agenda’ task in your annual planning. It has to be an integral part of workforce planning in your regular organisation and monitoring activities.
The set-up and maintenance of workforce management is not restricted to higher IA functions or specific industries. The active planning of expertise and skill sets is vital in every IA function.
Strategic workforce management, step by step
The ideal workforce management process is shaped by your organisation and industry, the IA function’s scope, size and maturity level as well as stakeholder expectations.
Therefore, the 4-step-approach proposed below should give you a first idea of how to approach strategic workforce management in your IA function.
Step 1 – Assess your team’s knowledge and skills
The first step aims to get a clear and complete overview of your team’s capabilities. This is key in understanding exactly where you ware today in terms of knowledge and skillsets within the Internal Audit team.
One way of achieving an overview of your team’s skills is by creating a comprehensive skills matrix.
The image below provides a first idea of how a skill matrix could look like. For every skill identified, each team member is noted as to whether they have that skill or not, and if they do, it gauges the degree of their experience.
Source: PwC 2019 Global Risk, Internal Audit and Compliance Survey
While assessing the knowledge and skills of your team, ensure that…
- your overview is complete, meaning that you have to document the most notable skills of your team members without getting lost in detail.
- the proficiency level of any skill can be rated.
- the created overview is updated regularly.
Step 2 – Define what skills and knowledge your function requires
With your team’s skills and experience assessed, start to evaluate the level of knowledge and skills as well as in what fields your team will need to meet the demands of the future.
Looking into the future and predicting how your function can be prepared admittedly is a challenge.
From a short-term perspective, your function needs to be able to fulfil the risk-based audit plan approved by the Board.
Strategic workforce management includes the word ‘strategic’. For this reason, Internal Audit functions should actively engage with key stakeholders to align Internal Audit’s strategic workforce management, and identify the skills and knowledge the function needs, or will need in the future, to keep adding value to your organisation. In this regard, it is also important to consider future trends and emerging technologies your organisation is planning to use or acquire, and how this will impact the workforce needs in your Internal Audit function.
Step 3 – Uncover the gaps
You have identified your team’s current knowledge and skills, and you have defined – with your stakeholders – what the abilities are that the function will need to display in the future. Bringing those two parts together leaves us with gaps to fill.
This step also takes into consideration any upcoming retirements and planned leaves of team members. Their departure also creates gaps that might have to be filled.
Step 4 – Close those gaps
The last step is all about planning how to equip your team with the knowledge and skills it needs going forward. The way you close your gaps varies from case to case and may be impacted by:
- the kind of knowledge and skills you require;
- the proficiency level you need;
- how often you need that specific knowledge and those skills (e.g. only for commitments in a specific area);
- your budget;
- the composition of your team.
When planning your team’s upskilling, we recommend involving your team members and incorporating their individual career ambitions and goals. Individual development plans can be used to align career ambitions/goals with the workforce management strategy.
In your strategic workforce management, it is also important to consider various talent models to support the agility and flexibility of the Internal Audit function. This could include, for example, guest auditors or external service providers.
For example, if you require specific knowledge in an area where your team is not experienced, it might be an option to bring in a guest auditor from within the organisation or possibly an external service provider. Your team members benefit from such collaborations as they can learn from the guest auditor/external service provider and hone their own skills. For guest auditors from within the organisation, it is important that Internal Audit assesses the guest auditor’s independence before bringing him/her onto the team.
The ‘PwC 2019 State of the Internal Audit Study’ reveals that 62% of the surveyed IA functions hire external service providers for commitments where they need specific digital skills.
