Unit 24 - Developing and implementing workforce plans

Unit 24 - Developing and implementing workforce plans

1. A workforce plan aims to ensure a business has the right number of workers with the right skills and abilities to meet its present and future needs. Workforce planning is essential in helping firms to identify trends and predict necessary changes to its human resource requiremens

2. COMPONENTS OF A WORKFORCE PLAN

   • The workforce planning process aims to identify the following key pieces of info:
     • The firm's corportate objectives and the implications of these for the firm's human resources.
     • An estimate of the likely size of the firm's workforce and its quality (in terms of skills, abilities and attitudes)) in the short,medium and long tterm - taking into account the effects of factors such as retiremenet and internal promotions
     • A forecast of the likely future demands for workers, both in terms of numbers and their skills and abilities - based on any planned changes to the firm's product portfolio and the forecast level of demand.
     • A comparison of the current workforce with estimates of future needs, in order to identify any changes required.
     • An examination of the external labour market in the short, medium and long term in order to make judgements on the availability of appropriately skilled staff
     • Recommendations regarding the policies needed to address future human resource needs, including recruitment, training, redeployment and/or redundancy.

3. INFLUENCES ON WORKFORCE PLANS

   • Managers will need to consider a number of factors that can have a significant influence on their ability to produce accurate forecasts of the likely supply of and demand for labour:
     • Corporate strategies: A business aiming to expand via organic growth will have very different HR requirements to one that takes over or merges with rival
     • Operational strategies: The nature of a firm's products, the scale of its operations and the production methods used will have a major influence on the number of workers and the skills they need to possess
     • Marketing strategies: The marketing plans developed to support the achievement of corporate objectives will also impact on human resources.
     • Financial constraints: All businesses, regardless of size, will set budgets limiting levels of expenditure on areas such as recruitment, training, pay levels etc. In order to control costs and operate as efficently as possible.

4. EXTERNAL INFLUENCES:

   • Sales forecasts: businesses are more likely to recruit more workers if sales are predicted to rise. Falling sales may not automatically trigger redundancies, but may mean that those employees that do leave are not replaced, or that training programmes are postponed
   • Labour market conditions: A shortage of young workers resulting from raising the school leaving age to 18 could push up wage rates, encouraging firms to recruit retired people.
   • Developments in technology: Technological change leads to new products and production processes, creating a need to recruit (or retrain) workers with the necessary skills
   • Changes in legislation: Changes to existing employment, equal opportunity and health and safety legislation can have significant effects on costs. For example, new legislation reducing the length of working week could encourage firms to use more machinery, rather than increase the no of workers employed.

5. Implementation - Key issues

   • Employer/Employee relations: Significant changes to the structure of the workforce, particularly in the case of increasing workloads or compulsory redundancies, may be met with resistnance and industrial action. However, regular consultation between managers and workers during the planning process can make changes easier to implement.
   • Cost: Changing the structure of a firm's workforce will mean incurring costs. Unless sufficient financial resources are avilable, managers will struggle to put their plans into action.
   • Corporate image: The general public's view of a business can be enhanced by workforce planning that can then create new jobs. However, large scale redundancies resulting from relocation are more likely to damage a firm's corporate image, leading to a possible loss of sales

6. THE VALUE OF WORKFORCE PLANS:

   • Effective workforce planning will help to maintain or improve business performance in the short, medium and long term by:
     • Recognising the time required to implement policies - for example, recuriting the right employees can take a long time. If maagers do not allow for this, resulting staff shortages can result in missed deadlines or poor service, Leading to customer dissatisfaction.
     • Encouraging HR managers to adopt a coordinated approach - Working together with colleagues from other functional areas, such as marketing, operations and finance should help to ensure that corporate objectives are met.
     • However, the value of workforce planning can be reduced by:
       • The quality of the information upon which decisions are based - inaccurate forecasts based on poorly conducted research will reduce the effectiveness of any workforceplan that is put together.
       • The impact of unforeseen events - regardless of the level of research or the experince of HR managers, a workforce plan can become irrelevant overnight as a result of the effects of a natural diasaster, such as a hurricane or earthquake, a terrorist attack of a severe recession

7. EVALUATION:

   • Having the right number of workers with the right skills at the right time is essential for effective operations. This is the aim of workforce planning, so the process should benefit any business in any circumstances. The effectivness of any workforce plan in practice, however, depends on how well managers can forecast demand for and supply of labour, and their ability to formulate policies that meet HR reuirements.