You might have heard of 'HR' also known as Human Resources or if you are in a particularly supportive organisation it may be called 'Human Remains'. This department is instrumental in supporting managers to help get the most out of their people. As we move and more into the knowledge economy organisations assets are very much their people and what they do and know.
How much of your day job is workforce planning?
Managing this crowd of people to get the most out of your human assets is a task that falls into typically two camps:
- The HR dept has this as 100% of their day job but it "usually" (not always) turns into being a reactive activity with them being engaged after the fact
- The 'manager' who treats this activity as probably 5-10% of their day job if you're lucky
Usually neither of these two options work well at getting the most out and optimising the crowds of people that make up the organisation. Mostly because it ends up being fragmented across depts, or is based on some convoluted process or overly complex spreadsheets. Enter … WORKFORCE PLANNING!
How do you do workforce planning?
The idea of workforce planning is that the business (ie not the HR dept) actively plan and prepare for what sort of workforce they will need over the coming year to three years. This activity can be very scientific with forecasts based on probabilities of when people are likely to leave down to the week !! Not every organisation will need this level of detail or accuracy, but it should have its workforce aligned to its financial planning cycle if only to ensure budgets are tracked! The high level concept is:
- each manager has access to the full suite of information regarding their people and reviews the next 12, 24 and 36 months service needs.
- demands that might impact on the level (amount of people) or type (skills of people) of workforce are highlighted for review
- the workforce supply (number of people and skills) is then matched to the anticipated workforce demand (from previous step)
- any gaps in number of people or skills is turned into an action plan which HR and the Manager go and work on ahead of time
That, in a nutshell is workforce planning.
Why do workforce planning?
The largest single cost and budget item in that majority of businesses is salaries or wages. To get the most out of this expensive resource you would expect to need to manage and optimise it in a number of ways. The costs to the organisation of a person leaving include:
- Severance pay (depending on how they depart)
- Poor delivery performance (productivity) from the individual leading upto their exit
- HR depts time to run a recruitment campaign
- Cost of advertising of new posts / roles
- Cost of recruitment agency to help sift & source candidates
- Cost of assessment centres to test out candidates aptitude for the role
- Manager's time to interview and select a suitable replacement
- Backfill cost of a temp resource to cover any gap left between a leaver and a joiner
- Doubling up time (paying two people for the same job) for a handover to the new person if there is no 'gap'
- Ramp-up time where a new joiner needs to get to know the environment and the role (reduced productivity)
- Baby-sitting time for the manager to induct the new joiner into his / her team and the organisation
- Increased salary cost if the new hire is more expensive than the leaver (they almost always are)
All of this is assuming that the huge risk being run in employing a new person is mitigated and they turn out to be a good solid performer that fits culturally and does not leave quickly after joining and trigger another round of these costs again!
Still think you do not need workforce planning! So now you see the value in having a functioning workforce planning capability as a key part of your organisation's business planning cycle.