Strategic Workforce Planning

Core Requirement 1: AlignAlignAlign organisational strategy andstrategic workforce planning prioritiesGoal: To identify longer-term organisational priorities and goals, and assignresponsibility for associated strategic workforce planning.Questions to support alignment of organisational strategy with SWP priorities: How may the organisation’s work change inthe future due to political, economic, social,technological, legal and environmental (PESTLE)factors? What are the key organisational businessobjectives for the next 2-5 years? What are the 3-4 large-scale challenges thatmay affect the achievement of these objectives? What are the specific initiatives required toexecute the organisational objectives? What is the time frame available to execute eachof the initiatives? What are some of the strategic resources (e.g.talent capabilities, market understanding) theorganisation has to support achievement of theinitiatives? What are the implications of the organisationalobjectives for different parts of the organisation?Possible sources of evidence: The organisation’s strategic objectives and keybusiness drivers Relevant and validated internal data (e.g. HR andfinance reports) Relevant and validated external data (e.g.Workforce Profile reports, People MatterEmployee Surveys) Stakeholder consultationSuggested actions: Obtain a clear statement from the seniorleadership team on the workforce themes thatare relevant to the organisation’s strategic plan Determine the business units, programs,activities etc. that are critical to achieving theorganisation’s strategic objectives Establish clear links between the organisation'sneeds, financial assets and workforce planning Establish clear timelines for workforce planning Encourage the organisation’s senior executivesto sponsor a cross-functional team withclear roles and responsibilities who develop,implement and monitor strategic workforceplanning Organise the workforce with considerationof its workforce requirements both now andin the future (e.g. how important a role is toorganisational imperatives) Identify the capabilities required to achievedesired outcomes over the period Consider workforce diversity requirements16

Core Requirement 1: Additional GuidanceAlignAlign organisational strategy andstrategic workforce planning prioritiesSnapshot 1 below provides a ‘big picture’ view of where an agency’s strategic workforce plan may fit intooverarching organisational strategy.The purpose depicts the vision andmission of the organisation. It startswith legislation and ministerial/parliamentary direction, but expandsto include customer/communityrequirements.The public value perspectivedescribes the outcomes the agencywill deliver for its customers:the organisation’s end users,stakeholders and communitygroups.The operational efficiencyperspective describes how theorganisation will deliver its publicvalue and customer outcomesefficiently and effectively.The strategic plans and prioritiesperspective relates to the criticalorganisational processes andactivities required to delivercustomer and operationalefficiency outcomes.The organisational capabilityperspective relates to intangiblebusiness mechanisms, such asskills, knowledge, culture, systemsand data. These factors underpinthe organisation’s strategic plansand priorities, and its ability todeliver desired outcomes andachieve its purpose.Snapshot 1. Using the PSC Strategy Mapping Tool to Align the Organisation Strategy with the Workforce Plan17

Core Requirement 1: Additional GuidanceAlignAlign organisational strategy andstrategic workforce planning prioritiesDiagnosing current state organisational prioritiesOrganisations may be at different stages of maturity organisational readinessin implementing strategic workforce planning. The data availability and qualitymaturity level is driven by a combination of factorsincluding: internal capacity and capability to undertake thestrategic workforce planningFigure 4 may help organisations assess their current maturity level.BuildingAlignmentConsolidatingIntegratingNo alignment betweenstrategic and workforceplanningStrategic planningincludes some workforceplanning themesStrategic businessplanning is fully alignedwith workforce planningUnderstandingSome understandingof strategic workforceplanning in pockets ofthe organisationLimited understandingof and commitment toplanning for system wideissues and changesStrategic workforceplanning is used as astrategic business toolApproachWorkforce plans aredeveloped by HR onlySiloed approach tolooking at workforceplanning across theorganisationStakeholder engagementis high and providesmeaningful input intoprocess and outcomesResourcesOften little or nodedicated resourcesSome senior sponsorshipand top-down input intoworkforce plan at pointsin timeBusiness units, HR andFinance work together toimplement, monitor andadjust the planWorkforce planningdecisions are not basedon meaningful andinformed dataWorkforce planningdecisions are based onsome basic meaningfuland informed dataWorkforce planningdecisions are based onsophisticated, meaningfuland informed dataDataFigure 4. Maturity of Strategic Workforce Planning18

Core Requirement 2: CompareCompareCompare options to achieve outcomesGoal: Identify different work and workforce scenarios to deliver organisationalgoals and the estimated cost of each scenario.Questions to support comparing options to achieve outcomes: How are current employees divided into usefulworkforce segments, and have groups fordevelopment, retention and mobility beenidentified? Are the required capabilities readily availablewithin the organisation or the labour market? How well does the current workforce align/support the organisational plan/strategy? What employment arrangement types arepresent within the current workforce (e.g.ongoing, temporary, casual, contingent,volunteers, contractors, interns, cadets, traineesetc.) and what is their contribution? How many employees are at each organisationallevel and location? What are the diversity statistics for eachworkforce segment, and are there opportunitiesto target the recruitment of diverse groups? How flexible is the workforce? Does theorganisation make use of non-full-timeappointments such as job sharing? What is the grade structure (distribution) and isit fit for purpose?Possible sources of evidence: Relevant and validated internal data (e.g.recruitment data, organisational structureanalysis) Relevant and validated external data (e.g. widerindustry trend predictions, workforce supply anddemand data)Suggested actions: Compare different operational models todetermine the best fit for delivering desiredoutcomes Analyse the composition of the existingworkforce and benchmark across all labourtypes internally and with the external labourmarket Consider future ways of working, taking intoaccount the impact of emerging technologiesand the need for organisational and workredesign Determine the most cost-effective way forward Forecast the demand for workforce capacity andcapability over the defined period Define the culture and conditions needed toeffectively meet workforce requirements Complete scenario planning to identify plausiblefuture events and their workforce size and costimplications19

Core Requirement 2: Additional GuidanceCompareCompare options to achieve outcomesTalent management is a key component of strategic workforce planning. Talent management is anorganisation’s approach to identifying, developing, supporting and mobilising individuals to meet strategicbusiness needs. The three components of talent management are shown in figure 5 below.BusinessPlanningTalent ManagementTalent ReviewStrategicBusinessPlanningIdentify & segmentHow do we define andidentify talent?How do we categorisetalent to targetdevelopment?Mobilise & retainStrategicWorkforcePlanningSupportour people todeliver betteroutcomes forthe citizens ofNSWHow can we match peopleto the right roles across thesector?How do we supportpeople to stay with us?Develop & engageHow do we grow ourskills base?How do we keep peopleworking productively?How do we planour workforceto match currentand future supplyand demand?Figure 5. Talent Management - a Key Component of Strategic Workforce Planning20

Core Requirement 2: Additional GuidanceCompareCompare options to achieve outcomesIt is important when undertaking strategic workforce planning to take into account the external labourmarket. An organisation may have a clearly defined strategic vision and business strategy, but not takinginto account constraints in external workforce supply or demand creates significant operational risk. Figure6 offers questions that can be asked during an in-depth analysis of the external labour context.External WorkforceExternal WorkforceDemandSupplyWho else is competing for these skillsavailable in the wider labour market?and capabilities?(e.g. education pipelines)Are they part of an emerging market, wherethe pipeline of talent isn’t developed?Is there a need to develop an internal talentpool or start capability building?Are these potential supply constraintsshort or long term?ExternalWorkforceImpactsAre the capabilities and skills readilyIs the organisation able to attract peoplewith the necessary skills/capabilities?How are other organisations attracting andretaining these people?What is the pace of the shift in demand forthe specific skills?What is happening in the industry tocause this? Are these potential supplyconstraints short or long term?Figure 6. Understanding the External Labour Context21

Core Requirement 2: Additional GuidanceCompareCompare options to achieve outcomesThe following snapshot highlights some of the potential issues that arise when agencies fail to consider thecomposition of their workforce.Snapshot 2. Using Contingent Labour vs. Robust Workforce PlanningContingent labour is the employment of peopleUnderstanding and addressing critical skills gaps –through a labour hire arrangement and can be ause of contingent labour is not frequently monitoredvaluable approach for solving labour supply issuesor analysed to determine “how it is being used toor temporarily filling capability gaps. However,address any skills gaps”.the engagement of employees under any type ofemployment arrangement, whether that be ongoing,Contingent labour should only be used when it istemporary, contingent, or contract labour, should bethe most efficient and effective option available tocarefully considered as part of a robust workforce plan.respond to an organisation’s business needs. It shouldinform, and be informed by, strategic workforceContingent labour may seem like a good solutionplanning.to resourcing issues, but when it becomes a defaulthiring strategy in place of considered workforceStrategic workforce planning helps hiring managersplanning, agencies can face a number of risks.make “decisions on the best resource strategy tomeet their business needs”, and contingent labourSome key issues when there is an over reliance on“should only be engaged after considering all othercontingent labour:recruitment options”.Cost – “government spending on contingent labourA strategic workforce plan can help organisationshas increased significantly over the last five years,avoid these obstacles by supporting them to usefrom 503 million in 2011-12 to 1.1 billion in 2015-16.”their existing workforce more effectively and hiremore strategically for the long-term. Using theKnowledge transfer – “ agencies’ offboardingexisting workforce and getting the right people inguidelines did not always provide for knowledgethe right roles at the right time will assist in reducingtransfer. This was identified as a key risk by staffuse of contingent labour, in turn reducing costs andbecause it is important to ensure that critical skillsretaining organisational knowledge.and knowledge are retained.”NSW Auditor-General’s Report – Contingent workforce: procurement and management, 2017 pp. 2-422

Core Requirement 3: IdentifyIdentifyIdentify gapsGoal: Consider what capabilities the organisation has now and compare theseto future requirements.Questions to support identifying gaps: What new capabilities will be needed and atwhat level? What are the likely consequences of thesechanges? Are new capabilities available? How could different employment types (e.g.ongoing employees, contractors, etc.) be utilisedwithin the future workforce? What are the characteristics of the desiredworkforce within the next 3-5 years? What current capabilities will not be needed incoming years? What culture change will be required to keep thefuture workforce engaged? How will jobs and workloads change as aresult of disrupters such as technologicaladvancements, industry changes, and otherPESTLE considerations introduced in CoreRequirement 1?Possible sources of evidence: Relevant and validated internal data (e.g.recruitment data, organisational structureanalysis, supply and demand forecasts) Relevant and validated external data (e.g. widerindustry trend predictions)Suggested actions: Determine external labour market trends and thepotential impact on workforce requirements Compare the strengths and weaknesses of theexisting workforce with what is needed for theoptimal workforce Complete workforce gap analysis, comparingthe existing internal and external workforcewith future workforce requirements, cultureand conditions to identify potential shortages,surpluses and areas of risk23

Core Requirement 3: Additional GuidanceIdentifyIdentify gapsConsidering external factorsThe steps to be taken in implementing a strategic workforce plan will depend on organisational context.Organisations expecting major changes will be required to undertake different types of activities thanorganisations anticipating a business as usual environment.Conducting an environmental scan and considering PESTLE factors will ensure the strategic workforce planprepares the organisation for the future. Figure 7 offers examples of factors to be considered.Scale and impact of changeMinimalModerateMajor(no major changes expected)(small shift in government priorities ormachinery of government change)(major budget change or major shift ingovernment priorities)Political: Same servicesdelivered regardless of politicalcyclesPolitical: Changes in governmentor leadership impacts servicedeliveryPolitical: Governmentdetermines a major change inservice delivery and structureEconomic: Consistent budgetallocation regardless of economiccycleEconomic: Budget allocation isbased on government prioritiesEconomic: Government reprioritises budget allocation ormajor changes in revenue modelSocial: Stable demographicfactors and customer baseSocial: Service delivery adaptsto demographic shifts andcustomer expectationsTechnology: Pace oftechnological change havingminimal impactTechnology: Technologicalchange drives changes inoperating modelLegal: No legislative reformexpectedLegal: Minimal legislative reformexpectedEnvironmental: Ecosystems,climate and other environmentalfactors unlikely to impactservicesEnvironmental: Ecosystems,climate and other environmentalfactors could influence servicedeliverySocial: Sudden change indemographic climateTechnology: Significanttechnological disruptionLegal: Legislative reform inprogressEnvironmental: Ecosystems,climate and other environmentalfactors are impacting servicesRegardless of the scale or impact of change expected, strategic workforce planning isneeded to ensure the right people are in the right roles at the right time.Figure 7. Setting the Scene in a Government Context24

Core Requirement 3: Additional GuidanceIdentifyIdentify gapsIt is likely that every agency will face challenges with obtaining data at some stage during their planningprocess. The snapshot below illustrates how strategic workforce planning can lead to positive outcomeswithout having access to ‘ideal’ data.ChallengeActionSuccessesAn organisation had embarkedInstead of waiting for all the data,The project team were able toon a strategic workforce planningthey brought together the rightdeliver a strategic workforceprogram, but was struggling withgroup of stakeholders (HR andplan which aligned with thedata accuracy and access.unit managers) and used theorganisation’s strategic goals,operational and workforce dataidentified critical skill andavailable.capability gaps, and created anThey were concerned thatwithout collecting large amountsaction plan to address them.of data they wouldn’t get theThis enabled them to startbenefits from the process.building a picture of strategicThe team identified opportunitiesworkforce requirements and gaps.to improve quality of service dueThis roadblock had raised theto the data analysis undertakenrisk of the project stalling andThey also substituted some dataultimately being stopped.with external data (e.g. workforceand workforce planning initiatives.trends and skills availability) toBy focusing on the top 10help shape the workforce plan.critical roles, the organisationaddressed more than 70% of theworkforce gap and realised a 200,000 saving in contingentlabour spend. They were able toreallocate those funds to upskillexisting employees in customerservice and safety.Snapshot 3. Achieving Success with Limited Data25

Core Requirement 4: ImplementImplementDevelop and implement the planGoal: Identify actions to meet work and workforce requirements to achieveorganisational goals and manage any associated risks.Questions to support developing and implementing the plan: What needs to be done to achieve the desiredfuture state and who will do what? What is the plan for bridging the gap between thecurrent and future workforce in the next 3-5 years? Will current positions need to be recruited andwhat will change in future positions? How will the organisation ensure that allemployees are receiving an opportunity toparticipate in career, professional and leadershipdevelopment? What development opportunities exist and howwill they be utilised? How will a pipeline be developed to identify andrecruit high performers? How will current employees be developed toachieve future requirements, succession andindividual success? Has a strategy for recruiting a diverse group ofcandidates been developed? Who will be responsible for implementation ofeach part of the plan? How will essential organisational knowledge andkey personnel be retained within the workforce? Which senior leaders will champion/sponsor theplan?Possible sources of evidence: Cost vs. benefit of workforce planning actions Gap projection outputs from Core Requirement 3 Scenario planning outputs from CoreRequirement 2Suggested actions: Develop comprehensive options to closeworkforce gaps and evaluate options in orderto select strategi

Strategic workforce planning is about understanding and proactively preparing for changes that may impact the workforce. For the purpose of the Framework, strategic workforce planning is defined as longer-term planning – often covering a 3 to 5 year period. Strategic workforce planning is separate from operational and tactical