Strategic workforce planning – a vital business activity
| DOI | https://doi.org/10.1108/SHR-08-2015-0063 |
| Pages | 174-181 |
| Date | 12 October 2015 |
| Published date | 12 October 2015 |
| Author | Andrew Mayo |
| Subject Matter | HR & organizational behaviour,Employee behaviour |
Strategic workforce planning – a vital
business activity
Andrew Mayo
Andrew Mayo is Director
at Mayo Learning,
Welwyn, Herts, UK.
Abstract
Purpose –The purpose of this paper is to make the case for strategic workforce planning and to outline
the key steps involved.
Design/methodology/approach –The paper begins with a discussion of the cost of redundancies to
the economy and argues that much of this could have been reduced with better planning. It goes on to
describe the key steps in workforce planning. It looks at practical ways to assess demand and
replacement needs and utilise productivity ratios to convert delivery units into human resource
requirements. It concludes with a discussion on the supply of resource and examples of actions that can
be taken proactively to close foreseen gaps.
Originality/value –This paper is based on methodologies developed by the author and applied in
practice.
Keywords Recruitment, Strategy, Productivity, Restructuring, Analytics, Human capital
Paper type Conceptual paper
Background and Introduction
Some years ago, I had a chief executive in the information technology (IT) industry who
became horrified at the sums that the company was spending on redundancies and how
easily human resource (HR) and line managers conspired together to hand out the
company’s money. For him, every penny spent this way was a wasted penny that could
have been used for other things. He knew, of course, that sometimes a redundancy was
inevitable but by insisting that every payment had to be signed off by himself and that
questions would be asked as to why this had not been avoided, the number rapidly
decreased. Managers started to do much more planning ahead; HR created a retraining
pool and the whole company became more disciplined on performance management.
Artificially created redundancies to allow longer service people to resign with a package
were ended.
The UK has developed a redundancy culture that costs the economy billions. The
Chartered Institute of Personnel and Development reported in 2012 that in the four years
since 2008, 2.7 million people had been made redundant and EMW, a law firm, estimated
the payouts alone to be £18.6 billion over this period. This situation has continued
particularly in the public sector since 2012 and added up to £2 billion of public money in
2012/2013. Average payment in the private sector was £8000 and in the public sector was
£29000. In one year alone – 2010/2011 – the National Health Service (NHS) paid out £170
million in such payments – an organisation that is chronically short of funds.
It is the nature of economic cycles that downsizing is followed by skill shortages. For the
year 2014/2015, the Daily Telegraph reported that £3.3 billion had been spent on hiring
agency doctors and nurses in the NHS, many of the former having retired early or taken
“redundancy” earlier. The problem of hiring back people caused HM Treasury to issue a
paper in January 2015 entitled Recovery of Public Sector Exit Payments.
PAGE 174 STRATEGIC HR REVIEW VOL. 14 NO. 5 2015, pp. 174-181, © Emerald Group Publishing Limited, ISSN 1475-4398 DOI 10.1108/SHR-08-2015-0063
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