Human Resource Strategies: Developing and Implementing Workforce Plans

Section 3.5

Chapter 17

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What is a workforce plan?

Workforce planning is getting the right amount of people with the right skills and experience in the right jobs at the right time. It is a process that provides managers with a basis for making staffing decisions based on the companies corporate objectives, budgetary resources and a set of desired workforce skills

A workforce plan itself, is the details of how the business will implement its HR management policies 

Components for developing a workforce plan:

  • Skills audit of the current workforce identifying the qualities and skills of existing employees- new managers may be unaware of the potential of their staff
  • Data about the labour turnover, wage rates, trend analysis of workforce demographics (qualifications) and statistical forecasts
  • Market research data and sales forecasts indicating the number of employees needed, when combined with technological developments the quality of workers required and their productivity can be estimated


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Components of a workforce plan

Recruitment and selection requirements:
Job descriptions and person specifications, specialist recruitment consultants

Training and development programmes:
Giving employees the new technical skills needed to meet future business needs and the development of employee potential

Retraining and redeployment programmes:
When skills become inadequate as a result of technological change so employees must be retrained, if a business decides to relocate its production facility then some employees may need to be redeployed 

Redundancy plans:
If forecasts are suggesting the workforce is getting smaller then planned redundancies must be included in the workforce plan.  

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Influences of workforce plans

Internal influences:

  • Corporate objectives- growth could mean labour recruitment is increased, earning higher returns could mean delayering, causing redundancies
  • Production/operational objectives- development of top quality management may involve training and team working, introduction of new technology could lead to new skill requirements or the loss of low skilled jobs
  • Marketing objectives- development of new markets overseas could lead to redeployments and the recruitment of local workforces, introduction of innovative new goods and services to the product portfolio would have implications for training as the existing knowledge and skills may no longer be efficient
  • Finance- the current financial position of the business and whether it looks at planning for the short or the long term are likely to have a big influence of the availability of funding for a workforce plan
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External influences:

  • The market and trends in buyer behaviour- things such as the growth in fairly traded goods would lead to relocating the manufacturing  and the need to establish ethical credentials of suppliers
  • New technology- the need for employees and retraining them may become less in the development of technology, creating less job opportunities
  • Competition- if a skills shortage then competitors will attempt to attract higher quality employees, leading to higher quality goods and services therefore gaining advantage
  • Labour market trends- they give an indication of the availability of suitable workers in the future, showing the skill pool to employers which should be reflected in their future workforce planning
  • Government and legislation- changes in working practices such as wages, working hours and equal opportunities changing the supply of skilled workers
  • Trade unions- part of the negotiation process and any workforce plans should involve union representatives to ensure minimum disruption and reduce the likelihood of industrial disputes
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Implementation Issues

Employer-employee relations:

The development of workforce plans can have both positive and negative effects on the relationship between employers and their employees, good communication is the key to resolving differences. When the plans involve the possibility of redundancies or introducing flexible working arrangements, employees may be concerned about the future 

Positive effects:
Improved communications, because a good workforce plan should involve all areas of the business including the employees, including them in decision making for example should improve motivation. Introducing flexible working could solve issues about work-life balance and may give workers opportunity to meet outside commitments

Negative effects:
Workforce plans may be the cause of fear and unrest particularly where the channels of communication are complicated or long. Workforce audits, redeployment and redundancies can cause uncertainty amongst workers who see them as threats to their job security 


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Corporate image:

The way that potential employees, customers and investors view the business can be influenced by how successfully workforce plans are implemented, they can see the abilities of the planning going on

Positive effects:
Organisations may be seen as caring for their employees and the individual needs which may encourage high potential employees to apply for jobs within the business, it should also have a positive impact on the service given to customers

Negative effects:
Decisions taken by organisations may be unpopular and cause criticism particularly if the workforce plans involve redundancies, which may make it more difficult for the company to attract the best employees for the future  

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There will be cost implications for any workforce plan; even if the objective is to reduce labour costs by streamlining the workforce there will be short term expenses such as redundancy payments

Positive effects:
This requires a longer term view of the business performance, inevitably there are short term costs to achieve longer term gains, so this shouldn't really be seen as a negative.

Negative effects:
In some organisations the role of HR is still seen as peripheral to strategic decision making, so to spend a significant amount of the overall budget of recruitment and training may bring opposition from budget holders in the other departments 

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Training and development are important to any workforce plan, spending on this tends to be limited and often the first mistake of cost reduction when a firm faces difficult conditions

Positive effects:
Good training whether internal or externally done can have beneficial impact on a business in terms of motivation and competitive advantage, those who invest time and money in developing their employees are likely to be able to respond better to changes in market conditions because they are likely to be more motivated and have a greater range of skills

Negative effects:
Training can be very expensive in the short term and there is no guarantee that employees will remain with the company once their development is complete, so their skills will go to better use with another company 

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