Workforce planning - benefits and potential issues
Author: Jim Riley Last updated: Sunday 23 September, 2012
Workforce planning - Benefits and Issues
Performed effectively, the following are commonly seen as benefits of workforce planning:
Most importantly, an effective workforce plan helps a business achieve its corporate objectives by ensuring the business has a workforce of the right size, with the right skills, in the right place. Seen like that, you can argue that good workforce planning is a source of competitive advantage
Workforce planning encourages managers to prepare and plan for changes rather than simply react to them – it places the HRM managers at the heart of strategic decision making
Businesses going through periods of significant change (e.g. technological change in the industry, environmental change) are better able to handle the workforce implications
Improved communication is a common benefit – staff feel that they are closer to the decision-making process, are working for a business that takes HRM seriously etc
Issues with workforce planning
The main issues that need to be addressed in order for workforce planning to be effective can be summarised as follows:
This is perhaps the most important issue. A workforce plan needs to be supported by sufficient financial resources for it to be effective. However, the HRM department can’t be given a “blank cheque”. Every decision made as a result of the plan has a cost implication – e.g. new training, extra recruitment, redundancies. The cost needs to be justified and should be consistent with the corporate objectives.
Employer / employee relations
Businesses perform best when there are strong working relationships between employers, employees and the business owners (e.g. shareholders). Decisions made as a result of a workforce plan inevitably both sides of the relationship – for example:
A decision to make redundancies and reduce staff costs might be viewed positively by the shareholders, but negatively by the employees and trade unions
A plan to offer more flexible working options would be welcomed by employees, but might place additional pressure on the workloads of line managers
The solution to these potential conflicts and issues is usually found through communication and consultation. Ultimately, decisions need to be taken in the best interests of the business – but it is important to at least attempt to gain the support of other stakeholders.
Business textbooks wax lyrical on the importance and benefits of training to a business. However, whilst training undoubtedly does have an important role to play in workforce planning and HRM, it is easy to underestimate the difficulty of getting the right amount and type of training done. The issue for most businesses (particularly small ones) is that training is:
Expensive (particularly off-the-job training)
Difficult to measure the benefits
A good workforce plan will recognise these issues and focus on the essential training that is required to support key decisions from the plan
A business that has an effective workforce plan that has the support of employees is likely to enjoy a better brand or corporate image than one which is perceived to be poorly managed and uncaring towards its employees.
Customers recognise businesses that place HRM as a strategic priority – they see it in the higher quality of customer service and quality that they experience at each interaction with the business.