Making the most of workforce planning

by 08 Jun 2007

In an era of skills shortages and retention challenges, workforce planning has become more critical than ever. How can technology assist in future workforce planning, how can companies extend their approach across an entire industry, and how can you get a return on workforce planning system investments? Angus Kidman investigates

The need for workforce planning might be obvious, but doing it effectively while simultaneously managing day-to-day HR tasks can be tricky. This is particularly the case with demand planning, which is subject to a huge number of variables. “Forecasting what mix of competencies will be needed is an art, not a science. There is no magic formula,”notes Gartner analyst Susan Dallas.

Workforce planning has been implemented in a wide variety of industries, but has proved particularly effective in areas such as IT where demand for skilled workers continues to outstrip supply. The Australian Taxation Office provides one clear example of its benefits.

“IT managers now have a framework for making staffing decisions based on our business requirements, strategic direction, budgetary resources and desired workforce capability,” the ATO noted in its most recent annual report. “The strategy included developing a capability framework, which was the first of its kind in the ATO and across the Australian public service in that it describes the capabilities for all IT roles and is built on the Integrated Leadership System. The framework has been rolled out and is now integrated into recruitment, learning and development plans, career path planning and workforce planning.”

Tracking of current and future needs remains the most valid method for ensuring workforce continuity, but also requires support from management. “Secure executive-level support to allocate financial, personnel, and technology resources to workforce management,” advises Forrester Research analyst Claire Schooley. “Install technology to manage the learning, performance, skills, and competencies of all the employees in the organisation.”

Mining for insights

For the Mining Industry Skills Centre, workforce planning is a critical tool that can help influence the future development not just of an individual company, but of an entire industry.

“The Mining Industry Skills Centre charter is to become the one stop shop on all matters relating to skilling for the industry,” says strategic development manager Jenny Neumann.

Formed in 2005 as a collaboration between government and industry to address training needs for the industry, one of the centre’s key tasks was to make a detailed assessment of the current and future employment needs of the mining sector, and to ensure that training programs matched up with those needs.

While employment data is regularly tracked by the Australian Bureau of Statistics and other bodies, that data didn’t prove to be suitable for the task. “We found we could not get the data we needed at the level of detail we required,” Neumann says.

Individual mining companies tracked their own internal workforce levels, but that information also wasn’t always helpful. “Individual mining companies track their own workforce for internal use, however they have no idea how they compare to the wider industry or the available talent pool,” Neumann says.

The Mining Industry Heartbeat Project was designed to help solve that problem, by aggregating data collected from multiple companies and using it to provide industry-wide workforce planning, based on current data, on a regular basis.

Planning for the project began in August 2006, and by December a pilot run, involving nine mining companies and five key skill sets, had been completed. While that was a speedy rollout, reflecting the urgency for the industry of addressing skills shortages, the project required detailed planning, especially in terms of technology selection.

“The challenge with sourcing software is to know what you want in advance, before you start hearing the pitches,” Neumann says.

The core requirement was to have a system that could automatically upload aggregate data from multiple companies and provide basic statistics (such as median age and gender profiles) from that information to identify current workforce trends. “We needed some software that could do that automatically by skill set for us,” Neumann says.

The cross-industry requirement was a challenge. “A lot of software is set up just for companies” and assumes a single organisation chart, Neumann says. “We needed software that could handle industry-wide data.”

“The other thing we wanted was the ability to model, both qualitatively and quantitatively,” Neumann says. “As soon as we wanted to get into modelling, there were hardly any options.”

Despite that difficulty, modelling was a critical requirement. “If we can’t model the impact, we’re just working on a best guess,” Neumann says. “We wanted to be more scientific about it.”

MISC eventually decided on using workforce planning software from Aruspex, which could comfortably handle industry-wide data and the modelling aspects. MISC is working closely with the company to develop additional modelling options specific to its needs.

With a platform in place, the next major challenge was getting the data from individual companies in a suitable form. “We expected to have some difficulty getting the data from the companies, but because they could recognise its importance they were all very forthcoming.”

That didn’t mean the task was straightforward. “Being able to encourage companies to produce that data and to maintain their enthusiasm for that is a major challenge,” Neumann says. “A lot of work is required to help the mining companies on the ground.”

“IT-wise, the biggest hurdle is just getting the data from the companies and cleaning it up.” With a wide range of software packages in use, some of them quite old, that needed to be approached on a case-by-case basis.

One common problem was that many company HR systems simply placed employees in categories like ‘mine worker’, without a more detailed description of their actual role. “It’s hard to do workforce planning if your base data isn’t already sorted into useful categories,” Neumann says.

A second important consideration was the transient nature of many employees. “You have to consider the contractor workforce.” At the central level, processes also had to be put in place to ensure data quality and confidentiality. “Any project concerned with data has to be confident about the integrity of the process,” Neumann says.

The Heartbeat Project produced immediate results, with the first round of data released in December demonstrating that some job roles would have a recruitment burden of up to 60 per cent in some positions. The next round of data, due in the middle of this year, will be much more extensive, covering 30 job roles and incorporating more companies from a diverse range of locations. Western Australian companies are particularly keen to get involved, given the continuing resources boom in that state.

For MISC, coming up with a cost justification for the project was not too difficult, since one of its core roles was to carry out this kind of analysis. Neumann also points out that the long-term economic benefits of dealing with skills shortages in a proactive manner easily justifies the initial investment. However, despite the complexity, companies shouldn’t be scared off workforce planning because of financial concerns, she suggests. “The budget to carry out this kind of work isn’t as expensive as it might seem.”