Workforce flexibility: planning is paramount

Human resources expert Stephen Bell describes workforce planning as being about creating an environment where people can work together to attain the best possible outcome for their organisation. “If you plan to be operational in five years, your workforce planning should cater for longer-term business goals,” Bell explains.

As a discipline, workforce planning blossomed in 1988 after Commonwealth and state governments started to publicly contemplate the country’s workforce into the future, given its ageing population. But the concept has gathered momentum more recently, with both levels of government investing heavily in this area and encouraging businesses to take the issue seriously.

From guidelines to standards

Standards Australia adopted workforce planning guidelines in 2008, with the document explaining that the guidelines are not a standard, but aim to further inform business managers on the topic and provide an overview to incorporating workforce planning into normal business practice. The guidelines are applicable for all businesses, including industry peak bodies, organisations, associations, government agencies and industry skill groups. However, change is in the air, with the guidelines about to come under the spotlight as they are progressed toward a standard that businesses will be encouraged to adopt. Principal author of the Standards Australia guidelines is Workforce Planning Australia founder and director Julie Sloan, who is recognised as an international thought leader and practitioner in strategic workforce planning. Sloan, who has led the development of the discipline in Australia since the late 1990s, says business leaders need to focus on producing evidence-based workforce planning, particularly for mission-critical occupations and roles within an organisation. She has written two books on the issue, with a third book earmarked for release later this year.

“This is a strong topic of interest among business and government. There is a lot of evidence out there that workforce planning is regarded as a new discipline that is being taken very seriously by business and government, and I have high regard for what government is doing in this space. They’re educating businesses and working hard to drive home the importance of workforce planning,” Sloan says.

Overseas, the discipline of workforce planning is being advanced by the finance industry in the UK and by the strategic human resources sector in the US, she says. Here in Australia, the resources sector is a leader in this field, Sloan says. “The resources sector is a very closed shop when it comes to workforce planning and their approach because it’s such a competitive sector, but I’ve researched their work in this area and the approach they take is outstanding. In particular, they are very good at projecting supply issues,” she says.

The education sector, utilities operators and the Northern Territory government (which released its strategic workforce plan in 2008) are also among the sectors leading this field, she says.

[breakoutbox][breakoutbox_title]How Australians feel about work[/breakoutbox_title][breakoutbox_excerpt]To understand how Australians feel about work, Australian workplace engagement firm fivefootfour conducted a nationally representative online study of 1000 Australian workers.[/breakoutbox_excerpt][breakoutbox_content]To understand how Australians feel about work, Australian workplace engagement firm fivefootfour conducted a nationally representative online study of 1000 Australian workers. Respondents spent 20 minutes online answering questions about work values, psychological wellbeing and stress, engagement and work happiness and future intentions and work-life balance.

The survey discovered that only 54 per cent of Australian workers are happy at work, and that 25 per cent of workers feel depressed during most of the day at least once a week. Employees crave greater flexibility, the report found, with 39 per cent of workers stating that flexibility is their biggest motivator when it comes to work.

Barbara Miller, organisational psychologist and principal at Potential Unlimited was quoted in the report as saying that the secret to improving happiness and well­being is for managers and employees to influence each other to identify strengths to perform at their best and flourish at work. “This is the key to building resilience, awakening creativity and harnessing potential for enduring fulfilment,” Miller says.

The report says that with economic ­uncertainty remaining on the horizon for 2011 and 2012, employers and employees need to take responsibility for making changes that will improve what is happening within the workplace.

Source: ‘True Blue: Why the Australian workforce is struggling and how to fix it’, fivefootfour, October 2011.[/breakoutbox_content][/breakoutbox]

A strategic approach

Businesses wanting to tackle workforce planning need to consider three strategic pillars, advises human resources expert Stephen Bell. As the managing director of human resources specialists, iHR Australia, he says it’s vital to build performance and capability, build employer brand and also to comply with the laws and regulations specific to your industry and local area. “Those organisations that simply focus on compliance and administration are not being strategic in their approach to workforce planning. The elements that lie beneath these pillars should be consistent with your overall business outcomes and not just an irrelevant adjunct.”

But that doesn’t always happen, he says. “Too often I see organisations failing to bring HR to the strategy table and wondering why they fail with key measures such as staff retention.”

Richard Watson, managing director of ADP, which focuses on employment relations services for employers, says the best tools are workforce management solutions that link time and attendance, payroll and HR data, which enable a business to analyse trends, workloads and capacity levels.

Organisational management tools can set up an organisational chart that lists the skills required for each role against the skills of employees across a business, Watson says.

“This allows managers to conduct a skills analysis of the company’s requirements against the actual skills existing in the organisation to better plan for fluctuating business needs,” he explains.

“With such data at their fingertips, businesses can determine realistic costs and forecast scenarios to help plan across different periods and be adaptable to changing market environments,” Watson says. Workforce planning implementation costs can vary greatly, according to Sloan, citing $3000 to $50,000, depending on a range of factors including current business operations, industry sector and the abilities of current staff. She says many businesses find it challenging to progress workforce planning programs because they assume the matter should fall to the human resources department. However, this is an executive issue and therefore should be driven from the top.

The legal angle

Before tackling workforce planning, businesses need to consider what has been legislated on this matter, according to Bell. The employment safety net established under the Fair Work Act 2009 (FWA) can affect workforce planning, and consideration should include the National Employment Standards (NES) and in most cases, a Modern Award.

These additionally specify obligations to consult with employees that are affected by major change, as defined in the Award, he says. “The NES requires employers to be family-friendly and extend flexible working arrangements to parents and people with carer responsibilities.

“A request by a carer to return to the workforce in a part-time capacity must not be unreasonably rejected and the employer needs to be able to articulate and document the grounds for which such a request is being rejected,” Bell explains. “The FWA also prevents sham contracting arrangements devised to avoid employment law obligations towards employees.”

So with legislation issues in mind, what tools are available to businesses wanting to tackle workforce planning for the future?

[breakoutbox][breakoutbox_title]Workforce planning challenges[/breakoutbox_title][breakoutbox_excerpt]According to Richard Watson, managing director of ADP, the recruitment, retention and development of qualified people can prove to be a major issue for some sectors.[/breakoutbox_excerpt][breakoutbox_content]According to Richard Watson, managing director of ADP, the recruitment, retention and development of qualified people can prove to be a major issue for some sectors. A major recent study published by ADP ES International that surveyed 2642 HR professionals from Australia, Europe and China found hiring qualified people and difficulties filling key employee positions were the number one concern for businesses. The next biggest challenge was developing managers and employees with high potential and retaining qualified people. And don’t assume that the current uncertain economic environment has resulted in an abundance of qualified candidates flooding the market, he says.

“This is because there has been a move from manufacturing to knowledge-based industries, which has been a major factor in creating the talent war. There has also been a major shift in the attitudes of young people, who seek a rewarding lifestyle rather than a long-term career in one organisation. And, Australia has an ageing workforce,” he says.[/breakoutbox_content][/breakoutbox]

Planning pitfalls

Businesses about to tackle workforce planning should tread carefully, with the result of poorly implemented workforce planning potentially catastrophic for a business, says the director of finance and accounting recruitment firm Aequalis Consulting, Simon Boulton.

“Because you’re dealing with people, you will always have situations arise that you least expect. In 15 years of recruiting, people have never stopped surprising me, and every week there will be another scenario that has its own unique peculiarities.”

Boulton named over-hiring based on bullish and often short-term forecasts as a major issue for a business.

“Compounding this are the lag time and commitment that it takes to get a new team member up to speed. Multiple hires brought in to meet increased demand or workload can actually add problems rather than assist.”

On the other hand, making wage cuts can be a difficult and emotive decision. “Unfortunately, the rule here is to cut once and if needed, cut deep. The price of not cutting enough is protracted uncertainty and with that, dwindling employee satisfaction and productivity,” Boulton says.

Under-hiring can also be a major issue for a business, with being short-staffed leading to workplace stress. “Markets change rapidly and being short-handed in an increasingly opportune environment is costly,” Boulton says. Lastly, over-cutting can be a big mistake. “You only realise what you have when you haven’t got it. Over-cutting can see skills, IP and morale walk out the door. Lots of things are irreplaceable, and replacement comes at a cost.”

Also, when deciding how to tackle your workforce planning for the future, don’t obsess about current economic conditions, HR expert Bell says. “It is a factor, but only a factor. Many successful businesses have been in operation for hundreds of years and have survived depressions, wars and revolutions because they are both strategic and flexible,” he says. Bell also points out that the widespread use of smartphones, home-based email accounts, video streaming and the like has enabled employees to work from home. This can make it more difficult to determine when an employee is working and to monitor hours actually worked, particularly in the case of part-time employees.

“It is challenging for employers to plan resources and operational coverage issues when working arrangements are more fluid than has been the case in the past. It requires the development of more creative labour input measurements other than head count based on Full Time Equivalents (FTEs),” Bell says.

So what does the future of workforce planning look like? Technology is expected to make the processes easier, with smarter solutions and slicker processes that introduce efficiencies the way of the future, according to Watson.

“Automation is the most popular solution to the talent management challenge, with 40 per cent of HR executives considering this solution to their challenges in the next one to two years. In addition, 33 per cent favoured delegating more HR tasks to managers and/or employees and 30 per cent cited engaging external consultants,” Watson says.