How does a company, an industry, or even a nation, plan ahead to have the people skills it might need five to 20 years down the track?
In years gone by, you would have called it “manpower planning”, a heavy-handed term which has morphed into “workforce planning”, explains Monna Monnakgatla, a director at KPMG and partner in the People and Change team. The discipline developed in the 1960s and is evolving in tandem with the evolving workplace of today.
“At its core workforce planning is about getting the right people in the right place at the right time,” says Stephen Bevan, director at the Centre for Workforce Effectiveness at The Work Foundation (the Work Foundation Alliance is a subsidiary of Lancaster University in the United Kingdom).
“It allows you to look more analytically at your future demand for employees (as determined by your business plan and your reading of market trends) and to work out how your supply of employees can be shaped to meet this demand. So, if your business is looking to grow over the next two to five years, or to open up a new office or factory or distribution centre, workforce planning can help you plan the numbers of people you need to recruit or promote or redeploy to meet the staffing needs of growth. On the other hand, if you need to shrink your business or change the nature of the work you do workforce planning can help plan the staffing consequences of this decision in a way that helps you keep the skills you need and develop a good supply of new ones.”
Monnakgatla adds that it’s about “looking at current capabilities and capacity, and assessing them to determine whether they are sufficient and if you have the right mix of skills to meet operational and strategic needs now and in the future”.
Workforce planning used to be much more about “stocks” and “flows” and “headcount”, says Bevan, such as the work he did in the 1980s and 1990s at Zambia Consolidated Copper Mines (ZCCM), focusing on planning the production and workforce needs of large-scale operations. This was largely a numbers game: how many miners/engineers/mineralogists will we need in 10 years’ time?
Modern needs
But today, Monnakgatlo’s fellow director and team partner Nhlamu Dlomu says, things have changed. “Workforce planning is used more and more to manage costs and efficiency,” she notes. “The economic environment changes quite quickly. The better an organisation understands what its needs are, the better it is at responding.”
Bevan adds: “More often today we see organisations thinking about skill-based workforce planning where the competencies of employees are much more important to get right. Thus, instead of asking how many engineers your business will need in 2020, it is more likely that you will want to know how many engineers with project management experience you will need (or how many IT graduates with commercial experience you will need). This moves workforce planning from being a mainly mathematical forecasting exercise, carried out in an operation research department [to being] more like a tool which sits alongside the business planning process.”
For some, workforce planning has been left behind by the rapidly changing world of the 21st century, but the experts argue that it is as necessary as ever. “Workforce planning is a bit of a lost art. Yet I think it still has a pivotal part to play in making sure business plans are realistic and deliverable,” says Bevan. “Some chief executives argue that workforce planning is pointless in dynamic or uncertain times. I say that this is exactly when workforce planning is needed – remember, it is based on building up scenarios and this can help you develop contingency plans for when things change.”
The rapid evolution of technology does make prediction difficult, says Dlomu: “In 10 years’ time, will you still need an auditor, working in the same way as today? What other jobs will there be that we haven’t even begun to conceptualise today?” Monnakgatla points out that about a third of Harvard MBA graduates are in jobs that didn’t even exist 10 years ago.
It’s important to be prepared for these changes. That’s why it’s crucial to incorporate mega-trends across the globe – such as mechanisation in mining – and try to envisage how they will alter the workplace and the workforce. Will more women be attracted to mining? How will their needs change the workplace? How does the shape of the working world change to accommodate a younger generation that is less loyal, more mobile and more demanding? What sort of people and meta-skills will we need to employ to ensure that our workforce is nimble enough to adapt to the unexpected?
“The world of work is changing so quickly,” says Dlomu. “The average age of the SNP500 company is reducing quite significantly, for example. Relatively young companies are started by relatively young people. Their values will differ from those of people working in the 1960s.”
For business big and small
Workforce planning can be a tough exercise, and companies often only undertake it when it becomes urgent. Requests for help with workforce planning often develop out of skills audits, says Dlomu, when companies set out to understand their current capabilities. Another trigger is when companies see skills disappearing – either people are leaving the country to work in the global market, or they’re retiring because the company’s workforce is aging. “They ask, how do we ensure that when they retire, they don’t leave a big gap?” says Monnakgatla, and that leads to a workforce planning exercise.
Should all companies do workforce planning at some stage? Yes, says Monnakgatla, the planning tool is used extensively, from government to the private sector. “Sectors where workforce planning is traditionally most useful are those which recruit in at the bottom and progress people up a hierarchy (for example banking, insurance, police, civil service and the military),” notes Bevan. “Workforce planning is more complex but still useful in matrix structures or businesses with more fluid career structures or internal labour markets.”
In fact, he says, this tool can be useful in small businesses, too. “I think small and medium enterprises (SMEs) can benefit greatly from workforce planning approaches, though complex mathematical models won’t usually be necessary. Getting resourcing decisions wrong as a result of poor or even zero planning can be even more expensive and risky for SMEs. Also, in my experience, many SMEs think that they can go out and ‘buy’ the skills they need when they need them and that planning is a ‘big company luxury’. Often things are not that simple. Even SMEs need to think about succession planning and skill shortages.”
Workforce planning can assist succession planning in non-governmental organisations (NGOs) too, says Dlomu. “As with an owner-managed business, the difficulty in the NGO space is often that the owner or leader tends to be very emotionally involved – the organisation has been built out of passion, which is difficult to replicate.”
But a workforce planning exercise can greatly help to pin down not only the skills but also the culture of the organisation. What kind of talent do you need to either nurture internally or source outside the organisation to keep it true to its mission? “This is the world we have to navigate – the business realities and the individual realities,” says Dlomu. “We need to manage the culture so that the organisation doesn’t lose its purpose and so that the leader is able to let go of what they’ve built.”
That transition is made much easier when the unique passion and drive the founder has brought to the organisation is defined and acknowledged, through a workforce planning process.
Is this a principle we should be applying as a nation as well as individual organisations? “That’s one of the most critical questions that needs answering if we are to prosper as a nation,” says Dlomu.
Workforce planning seen from a national point of view would guide how the government educates and shapes people from a very early stage. For example, South Africa has a great need for artisans, but if young people are to be attracted to these professions, we’d have to create a real value proposition for them well before they leave school. “The National Development Plan could be a conduit for this conversation,” she says.
This article is part of a larger supplement which can be found here.
The supplement has been made possible by the Mail & Guardian’s advertisers and the content has been vetted by the Top Employers Institute.