Workforce Planning

A good practice guide for TAFE Institutes

Workforce Planning a good practice guide for TAFE Institutes

10 September 2004

WORKFORCE PLANNING....................................................................................................1
a good practice guide for TAFE Institutes.......................................................................................................................1 1 Introduction......................................................................................................................................................................1 2 Purpose of this guide........................................................................................................................................................2 3 Key elements of workforce planning programs.............................................................................................................2 4 Implementation guidelines...............................................................................................................................................3 4.1 Consider the broader context.......................................................................................................................................3 4.2 Identify your future business direction and workforce needs.....................................................................................4 4.3 Know your current workforce.....................................................................................................................................6 4.4 Bridge the gap identify and address your workforce issues.....................................................................................8 4.5 Provide a sound basis for effective implementation...................................................................................................9 5 WORKFORCE PLANNING CHECKLIST................................................................................................................10 5.1 Key considerations for effective workforce planning...............................................................................................10 6 UNDERPINNING KNOWLEDGE FOR WORKFORCE PLANNING...................................................................12

Introduction Workforce planning is the continuous process of ensuring that the right people are in the right place at the right time, in order to accomplish the organisations mission now and into the future. Its fundamental purpose is to align and integrate the organisations workforce with its strategic goals and objectives. The degree to which the organisation has the appropriate skills, the correct numbers and the right talent mix to achieve its mission in a dynamic external environment will be crucial to its continued success. It is also about the sound management of human capital processes, including recruitment, retention, development, redeployment, and retirement planning for minimal loss of knowledge. Workforce planning can assist TAFE Institutes anticipate the staffing and skill requirements of the changing VET environment. This is essential if the TAFE sector is to adequately meet the changing demands of its operating environment and specific markets. Some Institutes are already taking action to shape their future workforces, thus ensuring their continued ability to deal with business challenges in the medium to longer-term. A range of approaches and techniques for working planning are available - one size does not fit all circumstances. Each Institute therefore needs to identify the elements best suited to its particular environment and tailor its approach to workforce planning accordingly.

Workforce Planning

A good practice guide for TAFE Institutes

Purpose of this guide This guide takes a generic approach to workforce planning in order to accommodate the varying business priorities and operating environments among TAFE Institutes. While the framework is broad, the main focus of this guide is on the desired outcomes of workforce planning: effective integration into the organisations strategic planning framework; and alignment of human resource strategies in order to continuously deliver the right people in the right place at the right time, to achieve the organisations overarching business goals and objectives.

Key elements of workforce planning programs Organisations vary considerably in their approach to workforce planning, and the enabling tools and techniques that they use. There are however a number of generic elements (or logical steps) that can be identified from the literature and examples of good practice in organisations: Consider the broader context External factors Strategic integration Vision, mission and values Identify your future business direction and workforce needs Identify future business direction Identify future workforce needs Define and build organisational capability Know your current workforce Develop a profile of the current workforce Workforce capabilities Establish systems to access workforce data Bridge the gap Identify and address your workforce issues Provide a sound basis for effective implementation Define roles and responsibilities Monitor and evaluate Monitoring and reporting Evaluating The following chart illustrates these key elements and how they interrelate. The Key Implementation Guidelines in the next section are intended to guide TAFE Institutes in developing an approach to workforce planning that is best suited to their own management, structure and culture, and the specific programs and business outputs they deliver. Finally, the key elements of workforce planning are summarised as a Checklist at the end of this guide.

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Workforce Planning

A good practice guide for TAFE Institutes

Key elements of effective workforce planning

Implementation guidelines 4.1

Consider the broader context

Workforce planning should not be undertaken in isolation from other management responsibilities. Workforce planning is most effective when it is fully integrated into a sound corporate governance framework and considered as an integral part of the broader strategic planning cycle. Workforce considerations should be reflected in, and influenced by, the Institutes vision, mission and values. External factors

The TAFE sector is directly influenced by changes in the broader environment. External factors contributing to the changing business and workforce environment, as well as trends within the VET workforce, need to be taken to account in any workforce planning exercise. Such an approach can provide useful contextual information for management at the local TAFE Institute level. Strategic integration Successful organisations place significant emphasis on developing a high-performance workforce as part of their strategic thinking and planning activities. The integration of workforce issues into a corporate governance framework, including the strategic planning processes, is crucial to making this happen.

Identify future business direction and workforce needs Organisational capabilities

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An effective corporate governance system involves the integration and alignment of all of an organisations key functions, such as service delivery and management of finance, information systems and human resources. It also allows informed judgements to be made on possible risks to the performance of an organisation and the optimal use of an organisations resources, including its people, to help manage those risks as well as delivering outputs and results. It is essential therefore that workforce planning is integrated into the broader strategic planning processes. This creates an environment within which managers of individual
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Workforce Planning

A good practice guide for TAFE Institutes

departments and functional areas can work more effectively together to achieve the required workforce mix. An integrated planning and governance framework can assist TAFE Institutes to: Recognise that strategic people management is essential to the Institutes ability to deliver its programs and services effectively Establish a formal structure for relationships among the key functional roles, for example, teaching program, finance and HR managers. Identify key HR performance indicators Provide a mechanism for Institute-wide feedback, evaluation and review. Vision, mission and values An Institutes vision, mission and values are an integral part of its strategic direction and provide the basis for the development of its specific culture and workplace philosophy. Vision, mission and values also provide an overarching scope for workforce planning activities. Through their vision, mission and values, TAFE Institutes can: Provide a standard for assessing the appropriateness of everything they do, including the recruitment and management of their workforces Help create a stable framework in which business and human resource strategies and practices can be developed and adapted Provide a means of conveying their expectations to staff at all levels, as well as their clients, customers, business partners and other stakeholders 4.2 Identify your future business direction and workforce needs

Identify future business direction Successful organisations have a good understanding of their future business direction and workforce needs, at both the corporate and department levels. This enables them to make effective decisions now in order to attract, develop and retain the right people for the future. While no-one can accurately predict what will happen in the future, it is possible to be futureready. As the pace of change within their operating environments increases, so organisations need to focus on their preparedness for the future and build flexibility into their planning processes to cope with the demands of rapid change. A number of inter-related themes can impact on an organisations preparedness for the future, most notably: Strategic intent: What is the strength and understanding of the organisational vision; its values; strategy and linkages to budgets; and resource allocation? People: What are their commitment, expertise and willingness to innovate and take risks; their customer focus; adherence to values; and their focus on strategy, outputs and business results? Process/systems: What procedural relevance and flexibility exist; how effective is information technology (IT) infrastructure and support; what process improvement opportunities exist; and how robust and supportive are the management systems? The tools or techniques that a TAFE Institute uses to prepare itself for the future will depend on its particular characteristics and business focus. A number of methodologies exist for anticipating possible futures within and beyond the immediate operating environment, and preparing the organisation accordingly. One futures
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Workforce Planning

A good practice guide for TAFE Institutes

methodology gaining popularity in government and private sector organisations is the development of scenarios stories about possible futures. Traditional forecasting on the other hand makes predictions based on an organisations past performance or previous trends, and normally considers only one future outcome. Scenario development therefore better equips an organisation to deal with a range of future uncertainties than does forecasting. Regardless of the futures methodology adopted, it is important to involve key internal and external stakeholders in any exercise that looks at an organisations future business directions. This can help to: Identify issues about the organisations operating environment and its workforce that would not normally come to light Identify barriers to achieving outcomes and explore possible solutions Bring HR and line managers together to start to build the partnerships that are essential to the successful implementation of strategies to shape the future workforce Determine what support can be provided to employees as their roles and skill requirements change; and Create a shared vision of what is important for the organisations success. Identify future workforce needs After assessing its future business direction, TAFE Institutes need to consider the numbers of employees and the types of competencies and knowledge those employees will need to meet future requirements. Understanding the skills mix and the impact of changing job roles in the workforce is as important as identifying the required staff numbers. This process is often referred to as demand forecasting or demand analysis. Identifying workforce needs involves not only an understanding of what work the Institute will do in the future, but also how that work will be performed. Questions to consider when assessing future workforce needs might include: What skills, attributes, capabilities and/or behaviours are required to deliver business and service objectives What potential or actual budget constraints exist What potential impacts are possible from greater use of information and communications technology, and What constraints or enablers are present in the environment in which the Institute recruits its people. Define and build organisational capability Organisational capability refers to an organisations capacity to effectively meet business objectives. Factors that contribute to organisational capability include the organisations culture and values, business processes and management systems, work organisation and the capability of individual employees. The links between desired business outputs and results, and the TAFE Institutes required workforce capability, need to be well-defined and clearly articulated. Successful organisations build their capability by identifying the staffing and skills requirements of the changing environment and future business directions. These organisations look beyond their existing workforce and take account of other variables and trends when considering their future capabilities. The objectives of such an exercise might include:

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Workforce Planning

A good practice guide for TAFE Institutes

Identifying a set of capabilities considered by the organisation to be essential to improving performance and delivering future business outputs and results, and that are sufficiently robust to deal with the changing environment Developing appropriate HR strategies to ensure the organisation has access to the people with the desired capabilities; and Promoting an understanding and awareness throughout the organisation about the Institutes capability requirements for the future. Human resource professionals, department managers and other functional managers should constantly seek to determine the capabilities necessary for business success. They should routinely ask themselves, and each other, the following questions: What capabilities will be required for the organisations future success? What capabilities currently exist within the organisation? How can we align capabilities with business strategies? How can we design HR practices to create the capabilities needed? How can we measure the accomplishment of those capabilities? While it is necessary to attract and retain high performance people with the desired skills, attributes and behaviours, it is equally important to focus on enhancing those capabilities that support the organisations overall goals and interests. Such a focus could help to ensure that capabilities remain embedded in the practices, processes, systems, culture and technologies of the organisation, despite the turnover of individuals. TAFE Institutes can build long-term organisational capability by clearly articulating current and future workforce needs, and investing strategically in the acquisition, deployment and retention of staff with the required capabilities. Other key areas that can contribute to organisational capability include: Knowledge management effectively capturing knowledge in a form that people can access and understand, and sharing that knowledge so that other people can apply it to their tasks, is crucial to continuity and innovation Performance management effective performance management can involve clarifying performance objectives and linking these with organisational business plans; regular appraisal of individuals or teams against the performance of these objectives; feedback from this appraisal; recognition or reward for performance; development to build capabilities; and counselling or other action to deal with poor performance Career management and succession planning adopting an integrated approach to managing careers which meets the needs of individual staff and builds the longer-term capability of agencies is an effective means of meeting future organisational skills needs; and Professional development establishing professional development plans that are clearly linked to current and future workforce needs is an important strategy in further strengthening the performance of TAFE Institutes. 4.3 Know your current workforce

TAFE Institutes should ideally be able to produce a profile of their current workforce including the demographics as well as the broad skills and capabilities. This profile, coupled with a knowledge and understanding of external labour market data, can be a good indicator of future workforce availability. This should contribute to the organisations capacity to meet its business objectives in the medium to longer term. Develop a profile of the current workforce Good practice suggests that, as a minimum, the current workforce profile should capture a range of key demographic information to instil rigour into the workforce planning process.
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Workforce Planning

A good practice guide for TAFE Institutes

Key demographic information Name Commencement date Employment status (ongoing, casual, part-time, etc.) Department/Campus/Institute Gender Age Workforce diversity information (ethnic origin/disability) Length of service (both Institute and TAFE-wide) Movements and dates The current workforce profile can then be used to estimate what the current workforce will look like in the future in the absence of any adjustments on other words, the Institutes projected workforce. Such an analysis can indicate how many current employees are likely to retire, resign or transfer out of the Institute over a given period based on previous trends. It does not take into account possible changes in business direction. In working through this process, it is important to remember that workforce analysis is not an exact science. Calculations only provide an indication of what the workforce could look like in the future, based on a range of variables. If forecasting or projection techniques are used, numbers need to be considered in conjunction with other external and internal information for sound decision-making. The estimated changes to the workforce can establish a reasonably accurate one years forecast of available supply. However, changes projected for two or more years can be less reliable because an Institutes labour market conditions are generally less certain over that timeframe. Workforce capabilities In addition to workforce demographics, information on workforce capabilities can assist TAFE Institutes in determining whether its current workforce has the desired skills and capabilities to build organisational capability, and enable the Institute to meet its business objectives in the medium to longer-term. Assessing the skills and capabilities of existing staff members is particularly important where an Institute has determined its future capability needs. This information provides a basis from which to determine ways of addressing any gaps. In spite of these advantages, developing a capability profile of the current workforce can present significant challenges for some. One way of identifying the capabilities and/or skills of individual employees is to conduct a skills audit. Although such audits can be useful in obtaining information on employees skills and qualifications at a particular point in time, they can be cumbersome and resource intensive to undertaken and keep up-to-date. Another approach is to integrate the assessment of individual employees capabilities with established performance management arrangements. The key organisational capabilities identified by the Institute as being essential to delivering business results now and in the future can provide a benchmark against which to compare the skills and capabilities of existing staff. This assessment can be undertaken as part of the individuals performance appraisal. Appropriate support, assistance and professional development opportunities can then be provided to maximise individual performance. This approach also provides a means of effectively aligning organisational and individual performance. Establishing systems to access workforce data Access to relevant data on workforce demographics and capabilities is a pre-requisite to effective workforce planning. Each Institute should make its own assessment about whether its current information programs and systems are sufficiently reliable and rigorous to support strategic workforce planning. The extent to which an Institute decides to invest in IT solutions
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Workforce Planning

A good practice guide for TAFE Institutes

to extract, manipulate and present data will depend on each individual institutes requirements and capacity. Note: Under current reporting arrangements, Victorian TAFE Institutes already provide basic workforce statistics each month to the Office of Training and Tertiary Education. These statistics are OTTEs primary source of statewide workforce data for advising on TAFE employment structures. Work is currently underway to produce more accurate workforce data by improving the capability of TAFE Institutes HR information systems. Improved statistical information, with higher standards of reliability and consistency to meet changing conditions, will also support the stronger policy and community interest in TAFE workforce data. At the Institute level, this improved data reporting capability will further promote workforce planning effectiveness. As a minimum, Institutes should move towards: Ensuring they have a well-structured program in place to collect high quality workforce data which directly supports workforce planning; and Improving their capacity to use relevant existing data to establish their workforce trends. If an Institute does not have access to sound workforce data, it is still possible to describe the current workforce by gathering information through consultation with line managers, staff interviews and/or focus groups. A range of key quantitative and qualitative indicators based on those factors most affecting the workforce should provide the most meaningful and useful information for Institute management. Collecting this data on an ongoing basis would be more useful for workforce planning than relying on a one-off snapshot of the data. The information can be managed effectively through the development of appropriate systems, or refinement of existing systems. Coupled with this, regular monitoring and reporting mechanisms provide a sound basis for decision-making. Some organisations are finding it useful to incorporate workforce data into existing business reporting mechanisms to keep senior management up-to-date on workforce issues. Increasingly, they are also seeing value in integrating data from a range of sources to assist managers with their business planning and day-to-day decision making. Integration of data and information from a range of sources, such as financial performance, client/key stakeholder feedback, and the broader external operating environment, as well as workforce data, is a powerful tool for decision-makers. 4.4 Bridge the gap identify and address your workforce issues

Identifying and filling the gaps between the current workforce profile and future workforce needs are crucial to achieving strategic goals and objectives; they can also indicate where strategic intervention and investment can best be targeted. Successful organisations position themselves to ensure they always have access to people with the necessary skills and knowledge. TAFE institutes might therefore find it useful to consider whether elements of the desired workforce profile: Currently exist within the Institute and need to be the focus of retention strategies Need to be recruited into the Institute Can be developed internally through succession planning, career management or better targeted professional development strategies

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Workforce Planning

A good practice guide for TAFE Institutes

Strategies to address immediate, medium and long-term requirements will depend on the degree of urgency and availability of required skills in certain situations. It should be recognised however that workforce planning is only one means of improving an organisations ability to deliver its business outputs and results. Broader management issues such as more effective use of technology, more appropriate organisational structures and work organisation, and better management techniques and approaches, are also important considerations. 4.5 Provide a sound basis for effective implementation

A number of key principles underpin the effective implementation of workforce planning initiatives. Workforce planning is a continuous process. Key elements of the workforce planning process should be revisited as necessary in response to any changes in the internal and external operating environments. Workforce planning is an investment in the future. Planning requires a long-term commitment to make the organisational or workforce changes necessary to deliver successful business results. It enables an organisation to plan for new skills and knowledge retention and renewal. Implementation of workforce planning will have resourcing implications. The level of investment an Institute decides to make in workforce planning depends on the Institutes particular environment, the risks it identifies and its commitment to improving performance. It is important to have an integrated approach to workforce planning where all relevant planning documents are aligned. An integrated strategic planning approach provides the framework in which managers throughout the organisation can work more effectively together to achieve a workforce capable of delivering business results. TAFE Institutes need to ensure that: The strategic plan, business plan, balanced scorecard and other guiding documents demonstrate the Institutes commitment to achieving business outcomes through better management of its workforce; and Good use is made of specific HR plans that are directly linked to the Institutes strategic plan. Prime responsibility for workforce planning is shared by the Institutes CEO, department managers and human resource managers. All TAFE Institutes are accountable for the efficient, effective and ethical nature of their operations. This includes the sound management of their workforces. Each managers HR role and responsibilities should be clearly defined at the outset in order to clarify accountabilities and set performance measures. Raising the profile of workforce planning to a strategic level requires the explicit commitment of the Institutes CEO and other senior staff. However the success of this approach will rely on the capability and professionalism of HR management. It is essential that the HR team understands the nature of the business and establishes credibility with senior management, department and other functional managers.

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Workforce Planning

A good practice guide for TAFE Institutes

Monitor and evaluate Regular monitoring and reporting on the implementation of HR policies and strategies are important in tracking the progress made, determining whether the identified workforce issues are being successfully addressed, and helping to manage the impact of any unforeseen developments. If the strategy is not achieving the desired outcome, or is not progressing as planned, the Institute should revisit the stages of its implementation as and where necessary. Evaluations are a useful means of assessing the performance of workforce planning initiatives. The role of workforce planning in contributing to the achievement of the Institutes outputs and results should also be articulated where identifiable. When assessing the effectiveness of workforce planning, it may also be necessary to identify and discuss any other variables external to the process that may have impacted on the workforce planning activities. 5 WORKFORCE PLANNING CHECKLIST 5.1 Key considerations for effective workforce planning

The following checklist outlines some key principles that a TAFE Institute should consider in achieving an effective workforce planning process. These principles have been drawn from issues raised in this guide but are not necessarily exhaustive - each Institute will have its own unique challenges and considerations. The checklist is designed to assist Institutes in assessing the strengths and weaknesses of their current workforce planning framework. Alternatively, it may be used to guide the establishment of an effective process for those Institutes in the early stages of workforce planning, or are about to embark on it. Consider the broader context Have you considered factors in the external environment that may impact on your approach to workforce planning? (for example, external labour market data and community profiles) Has workforce planning been integrated into the Institutes corporate governance framework? Is workforce planning considered part of the broader business planning processes? Does the management of your workforce reflect the Institutes vision, mission and values? Identify your future business direction and workforce needs Have the possible future directions of the Institute been explored? Were key internal and external stakeholders involved in the process? Was the assessment of future business directions and service priorities used to identify future workforce needs and build organisational capability? Has your Institute identified a set of capabilities that are considered essential to delivering business results in the future? Know your current workforce Has key demographic data been captured to develop a profile of the current workforce? Is the current workforce profile used to provide a demographic baseline against which future changes can be analysed? Has consideration been given to what the current workforce will look like in the future? Has a means of identifying the skills and capabilities of existing staff members been developed? Has a range of key quantitative and qualitative performance indicators been developed to collect workforce data? Is workforce data collected on an ongoing basis?

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Workforce Planning

A good practice guide for TAFE Institutes

Is workforce data incorporated into existing business reporting mechanisms and integrated with other management information? (The purpose of this is to keep senior management up-to-date on workforce issues and to assist with business planning and day-to-day decision-making.) Bridge the gap - identify and address your workforce issues Have workforce issues that may impact on the delivery of business outputs and results been identified? Have HR policies and practices been developed/refined to address the identified workforce issues? Are HR policies and strategies aligned with other business activities and directly linked to the overall strategic plan? Have both short and long-term initiatives for addressing workforce issues been identified? Have the strategies/initiatives been ranked according to business priorities? Have broader management issues been examined as a way of improving organisational performance? (Such issues could include more effective use of technology, more appropriate organisational structures and work organisation, and/or better management techniques.) Provide a sound basis for effective implementation Is it recognised that workforce planning is a continuous process? Are all relevant business planning documents integrated and aligned? Is prime responsibility for workforce planning shared by the CEO (and/or other senior managers), department managers and human resource managers? Is the CEO (or similar) committed and seen to be driving the process? Have each managers HR role and responsibilities been clearly defined? Are HR managers involved in significant business decisions to ensure that workforce issues are considered, and to suggest strategic human resource solutions to support the achievement of business goals? Are partnerships between strategic planning, finance and HR managers made known? Monitor and evaluate Have mechanisms been developed to monitor and report on the implementation of workforce planning initiatives? Will your Institute periodically evaluate whether the desired outcomes for workforce planning have been achieved? Were clear objectives for workforce planning developed to reflect overall business goals? Are systems in place to determine whether the strategies designed to address workforce issues have been effective? Have mechanisms been established to measure and/or assess the contribution of workforce planning initiatives to the achievement of business results?

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Workforce Planning

A good practice guide for TAFE Institutes

UNDERPINNING KNOWLEDGE FOR WORKFORCE PLANNING The underpinning knowledge required for effective workforce planning includes an understanding of: Organisational goals, policies and procedures The importance of human resource management in achieving organisational goals Strategic planning processes The relationships between key human resource functions EEO, equity and diversity principles The concept of diversity and its integration within and across all human resource functional areas Current and anticipated human resource policies specific to the organisation.

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