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Workforce planning during bleak timesA public sector view

Dilys Robinson

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InstituteforEmploymentStudiesSovereignHouse

ChurchStreet

BrightonBN11UJ

UK

Telephone:+44(0)1273763400

Email:askies@employmentstudies.co.uk

Website:www.employmentstudies.co.uk

Copyright2010InstituteforEmploymentStudies

Institute for Employment Studies

IESisanindependent,apolitical,internationalcentreofresearchandconsultancy

inHRissues.Itworkscloselywithemployersinallsectors,governmentdepartments,agencies,professionalbodiesandassociations.IESisafocusof

knowledgeandpracticalexperienceinemploymentandtrainingpolicy,the

operationoflabourmarkets,andHRplanninganddevelopment.IESisanotfor

profitorganisation.

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Institute for Employment Studies 1

Workforce Planning during bleak times

Deepbudgetcutsarenowhittingthepublicsector,andwillhaveabigimpacton

centralandlocalgovernmentandontheNHSinthecomingyears.Withinthe

privatesectorthereissomeevidenceofeconomicrecovery,butexperiencefrom

previousrecessionssuggeststhatprivatesectoremployerswillbeunlikelyto

recruittopreviouslevelsuntilthereismuchgreatercertaintyabouttheeconomy.

Theprivatesectorisunlikely,therefore,topickupthosewhoarebeingshedby

publicsectororganisations.Itwillbealongtimebeforethelabourmarketreturnsto

buoyancy.Thechallengeforthepublicsectorovertheshortandmediumtermwill

betoplanworkforcereductionstogetnotonlythebestpossibleoutcomeforservice

delivery,

but

also

a

sustainable

workforce

to

carry

the

organisation

into

the

future.

Fromoneperspective,arecessionmightsuggestthatthereisnolongeraneedfor

workforceplanning.Suddenly,thereisnowarfortalent.Goodpeoplewith

scarceskillsareinplentifulsupply,thepublicsectorisnolongerseeingits

traineesdeparttobetterpaidjobsoncequalified,andanyorganisationthathas

retaineditsgraduateprogrammehasseenapplicationsskyrocket;theycantake

theirpickfromthemostable.However,therecessionalsobringsproblemsthat

requirethoughtfulworkforceplanningattention.Labourturnover,alreadylowin

muchofthepublicsectorbeforethecurrentroundofbudgetpressures,islikelyto

cometoanearstandstill;fewpeoplewillriskajobmoveunlessabsolutely

necessaryorextremelysafe.Inaddition,olderworkersmaychoosetostayput

ratherthanretireat60or65.Peoplestayingputalwayspresentsdifficulties:no

injectionoffreshblood,promotionblockagesleadingtofrustrationand

disenchantment,andlessscopeforrestructuring.

Anotherissueisthatfinancialandheadcountconstraintswillimpactontheability

torecruit;essentiallythismeansthatmorewillhavetobedonewithfewerpeople.

MaximisingtheuseoftheexistingworkforcehasallsortsofimplicationsforHR

training,performancemanagement,relocations,selectiveretentioninitiativesin

someareasandselectiveredundanciesinothers.andoneofthemostimportant

istoensurethatworkforceplansareinplacefordifferentemployeegroups,

functions,andareasofwork.Thisisparticularlyessentialforemployeesworking

inessentialpriorityservices.

What is workforce planning, why do it, and when is itneeded?

Conceptually,workforceplanningissimple.Itisallaboutarrivingatexistingand

futuredemandfordifferenttypesofemployee,matchingthistothecurrent

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Institute for Employment Studies2

workforceandtolikelyfuturesupply,puttingthetwotogetherandassessingthe

impactontraining,recruitmentandretentionplans.Asimple,oftenquoted

definition,isthatworkforceplanninginvolvesensuringthattherearetheright

numberofpeople,withtherightskills,intherightplace,attherighttime.In

practice,

it

involves

a

lot

of

different

activities:

understanding

the

strategic

direction

oftheorganisation,findingoutwhatisgoingonintheorganisation,talkingto

people,understandingtheexistingworkforceandthelabourmarket,manipulating

data,presentinganalysesandtheirimplicationsclearlytotheorganisation,and

helpingtotranslateworkforceplansandforecastsintoactionplans.

Howeverbecauseworkforceplanningisallaboutpeople,andbecauseittakesa

longertermlook(insomeorganisations,sixmonthsislongterm,whilstinothersit

mightbetenyearsormore),actuallydoingworkforceplanninginpracticeismuch

harderthanitsounds.Prioritiesshift,managersgetdistractedbyshorttermcrises,

politicianschangedirection,andtheeconomydoesunexpectedthings.Atarecent

IESevent,participantsquotedallsortsofobstaclesthatgetinthewayofeffective

workforceplanning:lackofstrategicdirection,poorqualitydata,ordatanotin

therightformat,gettingworkforceplanningontheseniormanagementagenda,

choosingwheretoputworkforceplanningenergies,gettingtheorganisationto

thinklongterm,andextractingsensibledemandforecastsfrommanagers.

A practical approach to workforce planning

Tomakeanimpact,itisbestnottodissipateworkforceplanningenergiestoo

widely.Insteadoftryingtoproduceacomprehensiveplanforthewhole

organisation,focusonkeyactivitiesandkeyemployeegroups.Thisdoesnot

meanignoringtherest,asitisessentialthatworkforceplannershaveagood

understandingoftheworkforceasawhole,inordertoidentifyhotspotsand

futuresourcesofsupply.However,helpingtheorganisationtostaffeffectivelyits

areasofhighestrisk(orgreatestpain)isprobablythemostefficientwayofusing

workforceplanningresources.

IESseightstepapproachtoworkforceplanning,takenfromour2008publication1

isdescribedinoutlineintheboxbelow.

1 RobinsonD,HirshW(2008),WorkforcePlanningGuide,IESReport451

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Eight steps to workforce planning

1. Understanding the business and its direction: particularly strategic plans,priority areas, restructuring, and any planned major changes such as closures,

new services, changed delivery models etc.

2. Analysing the workforce: planning for the future is difficult without a thoroughunderstanding of the existing workforce, including entry points, career

progression routes, employee turnover rates, and exit points.

3. Identifying skills gaps: assessing skills and capabilities of the existing workforce,especially in key areas, and how these might change in the future.

4. Assessing future workforce demand: which means understanding any existingshortfalls/surpluses, and any planned changes for the future. This is where the

co-operation of managers will often be needed.

5. Recruitment and retention: the translation of demand forecasts intorecruitment, training and development, and retention plans.

6. Understanding labour markets and planning for succession: this involvesgetting a really good grip on workforce supply, both now and in the future.

7. Training and development plans: the workforce plan needs to inform these,especially in areas where organisations grow their own and training is lengthy

and expensive.

8. Developing workforce plans: putting everything together and then revisitingplans at intervals.

Understanding demand

Understandingworkforcedemandisnotoriouslydifficult.Commonproblems

includeassumingthefuturewillbethesameasthepast;failingtothinkthrough

theimplicationsofchange,bothinternalandintheexternalenvironment;andnot

factoringinproductivityimprovement.Theendresultisthatworkforceforecastsoftenlookremarkablysimilartotheexistingpictureeventhoughmanagers,if

pressed,oftenadmitthattheirexistingworkforceprofileisfarfromideal.

Demandsetting,ifdoneatall,tendstouseavarietyofmethods:financiallyderived

(whatthebudgetcanafford,orlabourunitcosts),ratios(offulltimeequivalents

requiredforacertainlevelofactivity),trendanalysis(followthedirectionofthe

trend),benchmarking(seewhatothersaredoing),andprofessionaljudgementare

probablythemostcommon.Sophisticatedorganisationsmaytakesthingsfurther

andusebusinessprocessmodelling,orevenscenarioplanning.

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Inpractice,demandsettingwillneedtoinvolvemanagers,whohaveabetter

understandingoftheirworkforceandareaofactivitythanacentrallybased

workforceplanner.However,involvingmanagershasitsownchallenges.There

areallsortsofreasonswhymanagersmaybereluctanttocommitthemselvesto

workforce

forecasts

including

fear

of

losing

part

of

the

budget,

difficulties

in

thinkinglongerterm,beingtoobusywithdaytodayactivities,andreluctanceto

admitthattheyneedhelpwithadifficulttask.ItisoftenusefultoinvolveHR

businesspartnersindiscussionswithmanagers,andtotrysomemindloosening

exercises,suchasaSWOTanalysis,beforegettingintothenittygrittyofworkforce

numbers.Inpractice,twoorthreemeetingswithamanger,andperhapshis/her

directreports,maybenecessarybeforeaworkforceforecastisarrivedat.Thesort

ofquestionstoaskare:

Doworkforceproblemsinhibitourabilitytomeetorganisationalgoals? WhatitemscomeuprepeatedlyinappraisalsorPDPsasweaknessesordevelopmentneeds?

Arethereroleswecantdo,orjobswecantfill?Whatdointernalcandidateslack?

Aretherebetterwaysofworking?Whatmightbeinhibitingthese? Whatarethepressuresforchangethatweareexperiencing?Whatimpactdothesehave?

Wherewilltheorganisationbechanginginnature?Whataretheworkforceimplications?

Arethereexternalchanges(eglegislation)whichwillaffecttheworkwedoandhowwedoit?Whichemployeegroupswillbeaffected?

Understanding supply

Beforespendingtoomuchtimeconsideringexternalsourcesofsupply,itisworth

rememberingtheobvious,butoftenneglectedpoint:yourfuturesupply(atleastfor

thenextfewyears)is,forthemostpart,alreadywithyou.Asignificantproportion

ofyourcurrentworkforcewillstillbewithyouinfiveyearsmaybeeveninten

yearsifyourworkforceisverystable.Thismeansthatestablishingareallygood

understandingoftheexistingworkforceiscrucial.Inparticular,lookat:

ageandlengthofserviceprofiles employeeturnoverrates(oftencalledwastagerates)resourcing

patterns,

such

as

key

points

of

entry

and

exit,

career

structures,

and

thebalancebetweenexternalhiresandinternalpromotion.

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Thiscanquicklyidentifyareaswhereaproblemisbuilding(perhapsanageing

cohortofexpertsthatmightbevulnerabletomassdeparture)andalsopossible

opportunities(suchasnewformsofservicedeliverythatmightoffercareer

developmentopportunities).Whenthinkingaboutnewentrants(egtoreplace

leavers),

it

is

important

to

consider

whether

the

labour

market

is

local,

regional,

nationaloreveninternational,andwhetherthereareskillsshortagesorsurpluses

inthelabourmarket.Thisinformationcaninformexternalrecruitmentversus

growyourowndecisions.

Manysourcesofinformationaboutthelabourmarketarereadilyavailable.The

OfficeforNationalStatistics(www.statistics.gov.uk)hasinformationabout

employment/unemploymentratesandtheUKsdemography,whilethe

DepartmentforEducation(www.education.gov.uk/researchandstatistics)has

informationabouteducationalattainmentandeducationproviders.Council

websitesoftencontainawealthofinformationaboutthelocalpopulationand

businesses,andJobcentrePluscanhelpwithlocalvacanciesandemployment/

unemploymentrates.SectorSkillsCouncilsarehelpfulforparticularemployee

groups.