Workforce planning: How many staff does it take to run an organisation?

28th Jan 2010
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Workforce planning is become an essential element in these lean times. In the first of this four part series George Blair looks at how many staff you actual need and how to increase their productivity.

Workforce planning is rapidly rising to the top of the HR agenda. Companies are being forced to consider the prospect of fewer people doing as much (and possibly more) work in an environment of declining revenues and increased competition. To take advantage of the slowly improving financial climate, organisations need to have the right employees for the climb back to economic health. 

Workforce planning is the art and science of forecasting the demand for different types of staff and matching this with supply – or – as is often termed: having the right people, with the right skills, in the right place, at the right time.

Many employers just slash and burn, banning recruitment and cutting staffing budgets by an arbitrary percentage across the board. The hidden costs of this become obvious as overworked staff provide poor customer service and innovation plummets as staff withdraw discretionary effort.  Workforce planning in contrast, builds sustainable productivity improvements, by focusing on activities that add the most value. 

Workforce planning is a strategic process which considers both the supply side of skills and staff numbers – what you have - and the demand side – what you need and how to organise it effectively.

This is the first part of four articles for by George Blair of the HR Society, which will cover the key stages of workforce planning over the next eight weeks. This week – looking at how many staff you actually need – and how can they be more productive?

At the intersection
Workforce planning is at the junction between HR, finance and operations. HR is best placed to coordinate improvements in productivity and improve workforce effectiveness. Asking penetrating questions is a powerful way to stimulate change in how the workforce is considered and evaluated. 

Some of the questions in this first phase are:

How can I show the board that workforce planning is useful?
Ask your finance and operational colleagues to put a cost on delays and bottlenecks in the organisation due to poor working processes or staff with the wrong skills. Workforce planning is a strategic exercise and needs for the whole top team to be involved; figures often speak louder than words.

How can we generate more revenue? Or provide better services?
Often senior management imposes so-called 'good' ideas from the top, which their staff often subvert, as they do not own them. In contrast, teams on the ground may willingly implement their own ideas, if only they are given the chance. Get back to your core business and facilitate cross-functional teams to look creatively at what the organisation should be doing, armed with good-quality information about the market place, customers and future demands. Learn from other organisations; for example, McDonald's took on Starbucks by offering Fairtrade coffee – looking at quality, not reducing their price.

How can I tell where staff are adding value? And where they don’t?
Many organisations don't do the right things because they're too busy doing the wrong things. The need here is to identify tasks that are unimportant so that they can be stopped or done less often. An activity sampling exercise might be one method, good, old-fashioned process mapping another. Look at ways of reducing form-filling, bureaucracy and meetings where they don't add value.

How can I tell where the real problems in the business lie? Where does poor quality take place?
Errors and poor customer service are often down to ineffective processes, rather than individual failings. Pinpoint these glitches through the cross-functional groups, involve staff in redesigning key processes, particularly trying to look at things. This often requires a left-field approach. For example, American patients spend less time in expensive hospital beds, as physiotherapists train patients in rehabilitation before their operation. In Britain, physiotherapy training is often delayed until after the procedure, meaning that the patient's stay in hospital is extended.

How do I appropriately measure what's successful and what's not?

First of all, make sure you're measuring the right things – what's most important from your customer's point of view? And what does that cost? 

It's often said that organisations hope for one behaviour while rewarding another, so make sure the incentive you offer support good customer outcomes. One industry where this is often done poorly is call centres – where staff are monitored on the duration and number of calls they take, rather than customer outcomes. So use measurements that are useful to gauge the achievement of customer satisfaction as well as efficiency. These are likely to include people-based measures – after all, your people deal with your customers.

How many and what type of staff do you need in the future, compared with now?

Having worked out where the blockages in the organisation are, what processes are inefficient, where your people add value and what activities to stop doing, you should now be poised to think about the difference with what you need (demand) and what you have (supply). A demand plan encapsulates all this work and gives you the building blocks for the next stage.

  • Next time – right people, right skills? Assessing workforce supply

George Blair is chairman of the HR Society and a workforce planning expert.  He runs courses in workforce planning for the HR Society, which focuses on the business edge of HR

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