The new financial year is upon us, and now is the time Senior Line and HR Managers should be considering their 2011-12 Human Resource requirements.
With difficulties in the procurement of suitably qualified talent causing a major constraint on the future expansion plans of many organisations, workforce planning has never been more important. As the war for skilled candidates in growth industries becomes more intense, these pressures will only increase.
However according to a recent survey conducted by BCG, only 9% of corporate respondents have analysed the supply and demand of their future workforce, and 6% have started to look at developing retention, recruitment and talent management strategies for jobs affected by skill shortages.1
Fundamental to maintaining current levels of capability and productivity amidst growing employee mobility, workforce planning is also critical to planning and managing human capital for strategically planned growth.
The key to the success of a workforce planning strategy is in cross functional engagement and partnering, representative of all areas of the business, and then linking the workforce plan to the business plan, which can be achieved by mapping demand and supply to the current and future business strategy.2 Using the right set of measures, businesses are armed with the ability to determine the size of any talent gaps or surplus, and the urgency this should be addressed, whether that’s through retention strategies such as people development and succession planning, or the acquisition of new employees to meet current and estimated future attrition. 1
An important element to strategic workforce planning is of course conducting an environmental analysis, taking natural fluctuations and retirement into account to paint a clear picture of the composition, age profile and capabilities of the future workforce. Factors such as productivity developments, skill shifts, expected advancements or changes in technology and the way your business operates, as well as future strategic assumptions derived from your business plan all aid in predicting future demand for the skilled employees you require to sustain growth. 1
The Australian Master Human Resources Guide, September 2010, references a 6-step workforce planning model proposed by a leading HR academic, Dr John Sullivan. 3
By following this 6-step process more rigour is provided to the workforce planning process, allowing companies to strengthen their future talent pool.
Step 1: Forecast the need for talent
Predicting your organisation’s growth rate through utilising sales forecasts and budgets, will allow you to forecast the need for employees by estimating the number of new positions needed and possible redundancies, whilst taking into consideration any likely marketplace changes.
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Step 2: Prioritise positions
Key jobs and key resources should be prioritised, with those which are critical to the organisation being focused on.
Many businesses realise the potential risk of losing quality employees due to a lack of career direction, but only take action when it is too late – causing lengthy vacancies in key positions, rushed appointments or forcing unprepared leaders to step up at a major cost to all. Through identifying key future positions and growth areas, a succession planning process should be developed for key roles.
Succession Management involves several key steps to be successful, Success Profiling, Identifying Talent, Assessing Readiness and Developing Readiness.
Step 3: Predict potential turnover
While you may be engaging in retention strategies such as increasing compensation, improving employee benefits, offering flexible working conditions, supporting training and development and improving employee engagement – with increased competition from other industries, in some cases turnover can not be avoided.
When developing your workforce planning strategy, it is important to analyse trends in your current turnover rate and prepare a risk assessment of the likelihood of key employees leaving.
Step 4: Identify and develop internal replacements
Facilitating maximum employee productivity, engagement and retention requires more than the correct match of skills and experience – it also requires effective learning and development to smooth the succession planning process, and to increase the level of transferable skills within your business.
An internal employee redeployment plan should also be developed in order to map out the existing internal skills which can be transferred from what may be a shrinking area of your business to a new or expanding area.
Step 5: Identify and obtain external replacements
A range of sourcing strategies and techniques should be utilised in order to attract the maximum number of suitable candidates from the local, regional and national markets to address current and estimated future attrition. In industries suffering extreme skill shortages, international sourcing might also be required.
Strategies you might consider include multi-media targeted advertising, involvement in community initiatives, targeted search, workforce mobility, or engaging a team of recruitment professionals to implement candidate attraction strategies and database mining as a means of identifying, screening and engaging the skilled employees you require.
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Step 6: Improve ability to manage employment costs
To manage employment costs, and to ensure your business has the flexibility to cope with the peaks and troughs of demand, organisations should maintain a contingent workforce of contractors, casual employees and fixed-term/fixed-project employees to provide flexible solutions to changing business needs.
Recognising the service performance and productivity gains workforce mobilisation offers, businesses around the world are beginning to enable their mobile and remote teams to constantly access and update their systems - live, in real time, regardless of location – with significant savings achieved through reduced employee travel needs, and real estate.
Better use and mobilisation of available skills is possible through a portfolio of policies, including: improving retention, enhancing integration, developing more efficient skill mixes, and improving productivity.
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Workforce planning therefore involves predicting, planning, procuring and retaining people. It also involves the preparation of policies and plans to ensure that your organisation has the right people, with the right skills, available in the right numbers – and performing at optimum levels – at the exact time that you need them in order to achieve business goals and objectives.
Taking the time to review your performance in each of the key areas of your business during the past year and engaging in reflection and planning will prepare you to get off to a strong start in the new financial year.
Source:
1World Economic Forum
2 HR Leader
3 Australian Master Human Resources Guide