Workforce planning

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Information about Workforce planning
Business & Mgmt

Published on February 27, 2014

Author: CollinsonGrantHR

Source: slideshare.net

Description

Our approach to workforce planning
Pressure on margins is relentless. So the need to reduce costs is constant.
And for most companies, employment is the greatest single cost.
Having too many people wastes their time, reduces the effectiveness and efficiency of the business, and costs a lot of money, especially if sustained.
And the law on redundancy, severance pay, minimum notice and so on makes overstaffing costly to eliminate.
Having too few employees is also a threat to the business. It can prevent economies of scale, restrict specialisation, and hinder the response to new orders, customers and business opportunities.
Managers must try to have the right number of people. They may be permanent, temporary or casual – and the mix is also a factor. Our approach is to design and set up robust systems to define the numbers required and plan
to provide them.
To do so, we need to understand the demand for skills and competences now and in the future. And for that we need a detailed understanding of processes and activities. This knowledge rests with those who do the work. When
products and services change, the volumes and nature of the work also change.
This usually requires a redesign of the workforce - a process that demands considerable effort.
So, workforce planning is not only for workforce planners or human resources specialists. All managers have a vested interest in shaping their workforces for the future and in increasing productivity. They have a responsibility to
challenge the status quo. But they cannot do this without hard evidence.
Collinson Grant (CG) has done a lot of workforce planning with the Department of Health in the UK. CG was instrumental in preparing the October 2008
DoH publication ‘Planning the pathology workforce – a guide for pathology managers’. Much of the material in these notes (in particular Chapter 4) was taken from this publication and from the CG report ‘Planning the Pathology
workforce’.
What is workforce planning?
Workforce planning is a process that aims to predict the demand for different skills and considers how best to manage the supply of suitably qualified, competent and skilled people to meet that demand.

Workforce planning

Contents Our approach to workforce planning 1 What is workforce planning? 1 The ‘six steps’ of workforce planning 3 Defining the required workforce 6 Appendices Appendix Collinson Grant – planning the pathology workforce – flowchart

Collinson Grant Workforce planning Our approach to workforce planning Pressure on margins is relentless. So the need to reduce costs is constant. And for most companies, employment is the greatest single cost. Having too many people wastes their time, reduces the effectiveness and efficiency of the business, and costs a lot of money, especially if sustained. And the law on redundancy, severance pay, minimum notice and so on makes overstaffing costly to eliminate. Having too few employees is also a threat to the business. It can prevent economies of scale, restrict specialisation, and hinder the response to new orders, customers and business opportunities. Managers must try to have the right number of people. They may be permanent, temporary or casual – and the mix is also a factor. Our approach is to design and set up robust systems to define the numbers required and plan to provide them. To do so, we need to understand the demand for skills and competences now and in the future. And for that we need a detailed understanding of processes and activities. This knowledge rests with those who do the work. When products and services change, the volumes and nature of the work also change. This usually requires a redesign of the workforce - a process that demands considerable effort. So, workforce planning is not only for workforce planners or human resources specialists. All managers have a vested interest in shaping their workforces for the future and in increasing productivity. They have a responsibility to challenge the status quo. But they cannot do this without hard evidence. Collinson Grant (CG) has done a lot of workforce planning with the Department of Health. CG was instrumental in preparing the October 2008 DoH publication ‘Planning the pathology workforce – a guide for pathology managers’. Much of the material in these notes (in particular Chapter 4) was taken from this publication and from the CG report ‘Planning the Pathology workforce’. What is workforce planning? Workforce planning is a process that aims to predict the demand for different skills and considers how best to manage the supply of suitably qualified, competent and skilled people to meet that demand. Demand and supply ‘Demand’ is not just a short term requirement for people. Workforce planning must provide a clear picture of the people required to accomplish the organisation’s medium-term strategy. Similarly, the ‘supply’ side of the equation requires a plan of action to ensure that the appropriate workforce (numbers, skills and competences) will be available at the right time. An assessment of the demand and supply of labour must take into account: 1

Collinson Grant Workforce planning The make-up of the current workforce, including the distribution of skills, age and service Forecast volumes of goods or services and the effect on direct labour The forecast turnover of labour Potential changes in the organisation’s strategy, such as mergers, acquisitions or closures of plants or offices New products or technology, or other changes that might affect the requirement for managerial, professional or scientific personnel The essential attributes of the workforce that the organisation will require to achieve its objectives. Workforce plans can be prepared at many levels in the organisation. At a team or departmental level, they might comprise monthly staffing rotas to ensure that sufficient labour with the correct skills and competences is available. At the most complex level, local plans might be aggregated into an all-embracing document to support strategic and financial planning for the business. Human Resources (HR) policies What will be the effect on the workforce of current HR policies and programmes? What changes would eliminate gaps (shortages or excesses) between the projection of current practices and the desired state? They might include: New arrangements for pensions or early retirement Redesigning jobs and reallocating responsibilities New or revised training and education programmes More effective recruitment Steps to retain key employees, including new or revised reward programmes Better planning for succession New or more flexible working arrangements. The challenge for HR professionals is to develop an aligned set of HR policies and practices that will allow the supply of labour to meet the demand. 2

Collinson Grant Workforce planning The ‘six steps’ of workforce planning The ‘six steps’ process was designed for the National Health Service. It is described in detail at www.healthcareworkforce.nhs.uk. It can, however, be applied to most organisations. This section outlines the key principles. The six steps are: to define the plan to map the change in the business to define the required workforce to understand the availability of the workforce to plan to provide the required workforce to implement, monitor and refresh the plan. Defining the plan This is the critical first step in any planning process. You must be clear why a workforce plan is required and what it will be used for. You must determine the scope of the plan and be clear who is responsible for it. Purpose – what are the aims and objectives? What is the problem you are trying to solve? What will a good plan enable you to do? Who initiated the plan and why? Who will the plan affect? Scope – what groups/services/organisations will it cover and over what timescales? What geographical area is covered by the plan? What types of employee are covered? What client groups does the plan cover? Is the plan the solution to a short- or long-term problem? Ownership – Who owns the plan and who are the stakeholders? Who needs to be influenced if the plan is to be successful? Do stakeholders understand their part in the plan and their contribution to it? Has everyone involved signed up to achieving the plan? 3

Collinson Grant Workforce planning Mapping the change in the business Define the purpose and shape of any proposed change in the business (such as in production or services provided) that will affect the workforce required. You must be very clear about current costs and outcomes and about the intended benefits from the changes. You should recognise those forces that support the change or may hamper it. Goals/Benefits of change – What are the objectives of the proposed changes? What is prompting the changes? What are the costs and outcomes under the current models? What are the intended benefits from the changes? How will the change be monitored effectively? Current baseline – What are the current costs and measures of performance? Drivers/constraints – What context must the new service operate within? What forces will support the changes, and what resistance is expected? Appraisal of options – What different scenarios for the changes have been considered and costed? Working models – What is the preferred model(s) and why? Does the preferred model provide the desired benefits more effectively than others? Or is it simply more achievable, given the expected constraints? Is there a clear and shared understanding of the future operating and working arrangements? Defining the required workforce This step involves mapping the new activities and confirming the skills and the types and numbers of employees required to do them. It is described in more detail in Section 4. Activity analysis – What are the key tasks within the new model? Have the activities been broken down into skills, time, individual or team? How have the jobs been defined? Do they include new posts? Types/Numbers – Can the required numbers of different employees with the required competences be modelled? Have the relevant units been confirmed – section, department, team? 4

Collinson Grant Workforce planning Has an assessment of the size and composition of the team been made? Productivity – Can new ways of working be considered and can the costs of different blends of skill be measured? Have the implications of increased productivity been considered – such as technology, patterns of working, service models and redistribution of tasks? Have different blends of skill been measured? Understanding the availability of the workforce This step is about establishing the current and future availability of the staff (‘supply of the workforce’). It involves describing the current workforce in the areas under consideration, including its skills and deployment, and assessing any problems arising from its age profile or turnover. The current workforce – What are the characteristics of the current workforce – numbers, jobs, skills, location, et cetera? Forecasting the future workforce – What turnover, vacancies and patterns of recruitment are expected? What factors might affect this – for example, legislation on working time, demographic changes, or the competition for skills in the local/national labour market? Options for changing supply – What initiatives for retention, retraining, recruitment, redeployment, new methods of working, etc. can realistically be developed? Have they been analysed and costed? It might be that the ready availability of employees with particular skills – or, alternatively, the shortage of such employees – itself influences the changes to the business and the definition of the required workforce. In such cases, steps 3.2 and 3.3 will need to be revisited. Consideration should be given to the practicalities and cost of any retraining, redeployment and/or recruitment that could increase or change the supply of the workforce. Planning to provide the required workforce This step involves determining the most effective way of ensuring the availability of employees required for the business. A plan for providing the right people, with the right skills in the right place, needs to be drawn up, with milestones and timescales. Gap analysis – What key changes are needed to the current workforce? Priority planning – What are the most significant things to change? Planning for action – What is the best option? How do education and other strategies support the main plan? What are the potential problems and how can they be tackled? Managing the change – How can you develop a momentum for change, and how do you sustain it? 5

Collinson Grant Workforce planning Implementing, monitoring and refreshing the plan As soon as you begin to implement the plan, you must systematically review and adjust it. What are the key milestones of your plan? Have you been clear about how success will be measured? How will unintended consequences be measured, so that corrective action can be taken? What is the process for revisiting your plan and refreshing any requirements? Defining the required workforce This section expands on step 3 of the Six-Step Methodology. It is an abridged version of the Collinson Grant Healthcare report, ‘Planning the pathology workforce’. The report formed the basis of the Department of Health publication ‘Planning the pathology workforce – a guide for pathology managers’. The guide was part of a ‘pathology workforce toolkit’ developed by CG. Some of the terminology used is, therefore, specific to this sector. But the methodology should apply to workforce planning in any organisation. The guide describes a method for analysing the activity of the workforce in pathology and relating it to the service provided. By modelling different scenarios for the service, managers can simulate the workforce they will require. They need to gather data and record them in specially designed spreadsheets provided by CG. There is a separate guide called How to use the model that tells them what data to collect, how to collect them and how to record them in the spreadsheets. There are five steps in the process to design the required workforce: Establish a baseline – record the activities of the staff and the amount of work done Simulate the optimal workforce – Challenge the assumptions that underpin the baseline profile of the workforce. Discuss ways of achieving efficiencies and improving the effectiveness of the workforce. And model the effects these changes would have Simulate changes to the service – Starting from this remodelled profile of the workforce, examine the determinants of change – the wider factors that may cause volumes of work to change. In other words, model the future state Consider further forces for change in the workforce – Refine the picture of the future state by considering additional influences on the design of the workforce 6

Collinson Grant Workforce planning Next steps – Consider how you will influence the supply of skilled and competent workers. Plan to repeat this analysis at regular intervals Establish a baseline The first step is to quantify the inputs and outputs of the pathology service, by department, as it currently stands. What volume of work does each department do in a year? How many people are employed? In what band do people work? And how do they spend their time? Form a project team Four key roles are needed for a project team: Project sponsor – to oversee the whole process. The sponsor’s main task is to get the commitment of the departments, to make sure the process is locally owned. Project manager – to oversee the work of each department in collating and analysing the data. She or he will take ownership of the main modelling spreadsheet, analyse the standard reports from it, debate the optimal structure of the workforce and simulate possible future states. Project advisors – to provide objective, independent analysis and advice. They should be from outside the pathology service. One advisor should have skills in workforce planning. Department managers – to collate data and contribute to the debate on future configurations of the workforce. They will provide specialist advice on the activity of the staff in their departments and on the skills and competences needed to do the work. Project Sponsor (Director or Associate Director) Project Advisors Project Manager (Business Manager) (Workforce Planner, accredited workforce representatives) Department Managers 7

Collinson Grant Workforce planning Define the scope of the project Departments The spreadsheets will analyse data for each department that you specify. In agreeing on the scope of your project, you need to decide which departments will be included in the analysis. People Ideally, you should capture data for all the people who work in the departments you plan to review. You should include all scientific personnel, plus medical personnel and those in managerial and administrative jobs. Gather data The first major task is to gather data that describe the inputs of the workforce (time and activities) and the main outputs of the departments (volume of work). The CGH model uses the concept of Processes, Activities and Tasks (PATs) to describe the total effort of the workforce. Data are collected and put into the spreadsheets provided. Generating your baseline profile Once all the data have been gathered, the ‘Current workforce – input’ worksheet (shown below) will reveal how the effort devoted to each task is spread across departments, jobs or salary grades. 8

Collinson Grant Workforce planning Christmas trees Christmas tree representations are designed to give a bird’s-eye view of the shape of the workforce by band. A number of Christmas trees are available in the model. They show the profile of the pathology service as a whole. They convert numbers of employees into ‘Whole Time Equivalents’ (WTEs). Christmas tree: current WTEs by Band Band 9 Band 8D Band 8C Band 8B Biochemistry Band 8A Haematology Band 7 Microbiology Immunology Band 6 Histopathology Band 5 Cytology Central Sample Reception Band 4 Other (1) Other (2) Band 3 Band 2 Band 1 WTEs Adjustments to the profile of the workforce will change the shape of the Christmas tree. The work of the staff by process The ‘WTEs by process’ worksheet shows how the workforce spends its time on the high-level processes. In the example below, by far the most time is spent on Process 4 – providing the service. WTEs by process 9 8 7 6 5 WTEs 4 3 2 1 0 Process 1 Process 2 Process 3 Process 4 Process 5 Process 6 Process 7 Process 8 9

Collinson Grant Workforce planning Simulate the optimal workforce The data collected in the previous section describe the activities of the current workforce. But is the profile of activity balanced? Are the right people doing the right things – and enough of them? Two main factors must be considered: The distribution of skills and competences between different bands of staff – Are the right bands of people doing the work? The productivity of the workforce – Do people do enough work that adds value? Do they work efficiently? Are the processes lean? Is the right number of people dedicated to each activity and task? The model not only provides a profile of the current workforce, but also allows a re-profiled workforce to be simulated and indicates the changes in efficiency that result. The model also provides a Christmas tree representation for the revised profile of the workforce. This can be compared with the baseline Christmas tree. As different scenarios are simulated, the effect of the changes can be seen. A suggested approach The project manager and a workforce planner conduct an initial review of the data and pinpoint the main issues Update the data in the model to reveal indicative efficiency savings Discuss the main findings and issues with the project manager, department managers and project advisors Agree on an improved profile of the workforce for each department Update the data in the model again. This is now the ‘go to’ position for your current volume of work. Skills and competences – Who should be doing the work? The first area to examine is the distribution of work into the various bands. Look at the ‘Revised workforce – input’ worksheet in main_model.xls. Examine the tasks in turn and think critically about whether they are being done by people in the most appropriate band. You also need to think about ways of making improvements to the profile of the workforce: Can skills be transferred from people in higher bands to those in lower bands? Can differences in productivity between higher and lower bands be overcome with better training? 10

Collinson Grant Workforce planning Would better planning of rotas help to relieve more senior people of the burden of work that could be done by those in a lower band? Does everyone work at her or his highest level of skill? experts concentrate on work that only they can do? And do The objective is to pinpoint work that could and/or should be moved to different bands. The model shows how changing the band of worker affects the profile of the workforce. Productivity Direct work and support work The PATs list is divided into tasks that are considered direct to the work of a pathology service, and those that are support tasks: Direct – describes effort that is applied directly to creating results so that the service meets its patients’ and customers’ requirements. Direct work adds value Support – describes effort that supports the direct work, enabling the service to continue its day-to-day operations and improve its performance The efficiency of a department is measured, in part, by the relationship between direct and support work. The model shows the amount of direct work done in each department. The departments should ideally have a high proportion of direct work – at least 75%. You should therefore investigate the reasons for low proportions of direct work: Reduce the amount of support work done by experts to a minimum. They are expensive, so get the most out of them Is the amount of support work simply too high? If so, the department is failing to concentrate on tasks that add value. Re-evaluate the structure of the workforce in departments that are doing insufficient direct work. On the ‘Revised workforce – input’ worksheet in main_model.xls change the number of WTEs to reflect the changes you would like to make. Bottlenecks and constraints One reason for low productivity might be pinch points in the flow of work. These can be caused by the lack of specific skills, by insufficient resources, or by ineffective equipment. Are any of the tasks (in the PATs list) associated with bottlenecks? If so, try to understand the cause. There are a number of things you can do to relieve bottlenecks, and these can affect the design and deployment of the workforce: 11

Collinson Grant Workforce planning Try to minimise the bottleneck’s idle time by smoothing the flow of work through it as much as possible Similarly, if the bottleneck is caused by spatial constraints, try to smooth the flow of work through that part of the laboratory Ensure that everyone works at her or his highest level of skill and that experts concentrate on work that only they can do Try to find ways of increasing capacity (of both people and equipment) by using spare capacity elsewhere. The impact of technology Changes in technology can have a dramatic effect on the workforce. New technologies can automate a process, thereby reducing the number of people needed to do it. Alternatively, new technologies can enable people to become more productive. If you are planning to introduce new equipment, consider which tasks might be affected. Using the data in the model (‘Revised workforce – input’), try to predict the number of WTEs that might be displaced and alter the number of WTEs accordingly. Benchmarks for efficiency The model tells you how much of the work of the staff is on activities that add value. But it does not tell you whether people work efficiently on those activities. You might routinely calculate efficiency ratios for your service (tests per WTE, cost per test, and so on). But these are only of value if you have a view on whether the results are good or bad. Without benchmarks, you have no context. There is no reason why laboratories should not group together to do some comparative analysis of their findings. However, benchmarking gives you a relative position. And, by definition, some organisations must be above and some below the average. There is always scope for further improvement! The most valuable form of benchmarking you can do, therefore, is to measure improvements over time. You can do this by repeating this methodology at regular intervals and comparing your results with previous ones. Simulate changes to the service Up to now, the model has been used to establish a desired or optimum profile of the workforce for the current workload. But the future workload might be very different. The model can now be used to simulate the effects on the workforce of changes in workload. But first you need to consider the factors that might influence the volume of work. Note that the model assumes a linear relationship between the volume of work and amount of direct labour required. But volumes change from month to month, and some types of tests show, for example, seasonal distortions of volume. The pathology service should reasonably be expected to cope with a 12

Collinson Grant Workforce planning certain degree of flexing in its workload, without having to resort to changes in the number of people it employs. So the relationship between WTEs and volume of work is ‘stepped’ rather than linear. There is inevitably a point at which no more work can be absorbed (unless through a compromise on quality and safety) without a step change in the number of people employed. If you have optimised the workforce to its leanest point, then the resultant profile will be directly scalable with volumes of work – because the leanest possible system of work has little or no spare capacity. Planning the service Your plan for the workforce should be integrated with plans for the pathology service, which, in turn, should be integrated with plans for healthcare services and changes to pathways of care. You should attempt to quantify the volume of work you may do in the future as a result of such changes. Consider the following forces for change in particular: Local priorities set by your host trust and/or commissioned by local Primary Care Trusts National priorities as directed by the Department of Health Changes to the Quality and Outcomes Framework for General Practitioners Movement of services out of secondary care and into primary care settings Plans for reconfiguration of pathology services Improvements in the appropriateness of testing. Volumes may increase for tests that are currently under-requested. Conversely, volumes may decrease for tests that are currently over-requested. Updating the model You can use the model to simulate different future states. The guide describes how to change the volume of work and view the effect these changes have on the profile of the workforce. You can compare these outputs with the outputs for your current profile. This will show the changes you need to make if you have accurately predicted the future state. The impact of technology As discussed above, the introduction of new technology might result in tests being processed differently. You can use the model to move the volumes between the four types of test (routine automated to complex manual). The outputs from the model show the effect on the profile of the workforce of these changes. 13

Collinson Grant Workforce planning Christmas trees The ‘Ch Tree 3’ worksheet in main model.xls contains a Christmas tree representation for your revised profile of the workforce, incorporating the revised volumes of work. Compare this with the baseline Christmas tree (‘Ch Tree’ worksheet) to see the gap between where you are now and where you think you should be. Refer to this Christmas tree as you simulate different scenarios to see the effect of the changes you make. Use it as a ‘sense check’ to make sure the profile you are simulating looks right. Consider further forces for change in the workforce Until now, you have concentrated on remodelling your workforce to get the right number of people doing the work (re-profiling across bands), and to get them doing the right work (maximising direct work to eliminate work that does not add value). You may also have made some predictions of volumes and seen how the demand for workforce changes accordingly. However, there are a number of other factors that need to be taken into account. Consider each in turn and decide whether any of your predictions for the workforce need to be tempered. The impact of legislation Changes in employment legislation can affect the structure of the workforce. The European Working Time Directive (EWTD), for instance, has a profound effect on the planning of rotas. Consider the changes that must be made to your profile of workforce demand as a consequence. Demographics of the workforce The age profile of the current workforce might not be stable – the average age might be steadily increasing, for instance. The retirement of senior and experienced personnel can reduce the efficiency and effectiveness of the workforce if there are insufficient people coming up through the ranks, or available in the labour market to replace them. Some tasks require the application of considerable professional judgement. Such skills tend to spring from experience rather than from qualifications. Look at the age profile of your workforce. Consider the likelihood of demographic change in the workforce and the effect this could have on the overall experience of the staff. Will the future workforce be able to work as efficiently as the current one (all other things being equal) if this experience decreases? Next steps This guide aims to help you quantify the demand for skills and the number of people needed in your future workforce. So what next? Workforce supply 14

Collinson Grant Workforce planning Having specified what you will need, you must consider how to influence the supply of appropriately skilled people to meet the demand. You should consider: whether perceived shortfalls in skills could be plugged by developing current personnel. What training will be needed? Who could provide it? And at what cost? the range of skills needed for the future. Do current courses in higher education need to change? how you should influence your Strategic Health Authority in the commissioning of education (strategic workforce planning) how you might better retain the staff and plan for succession. Issues about workforce supply are dealt with in more detail in sections 3.4 and 3.5 above. Repeating the exercise By repeating this exercise at appropriate intervals (say every 6 or 12 months) you can gauge how your workforce is developing. Does it appear more efficient (more direct work, less support work)? Is the mix of skills optimised (people doing work appropriate to their bands)? Have you stripped out overcapacity and replenished areas of under-capacity? 15

Collinson Grant Workforce planning – planning the pathology workforce – flowchart Collinson Grant INPUTS TO THE MODEL STEPS ANALYSIS STANDARD REPORTS FROM THE MODEL Current volume of tests by department Baseline profile of the service by department T L The time of the staff apportioned to tasks R WTEs by grade and the mean WTE cost by band E 1. Establish a baseline Productivity Change the number and mix of staff for each task Optimised workforce numbers needed at each band, their activities and cost. Based on scope of current service. O M M O Change the mix of bands for each task P Skills and competences D U E 2. Simulate the optimal workforce Planning the service C 3. Simulate changes to the service Change the volume of tests to reflect service plan Future workforce - numbers needed at each band, their activities and cost. Based on scope of future service. 4. Further drivers of change - The impact of legislation - Demographics of the workforce - Retention and turnover 5. Next steps - Manage supply - Repeat the process Appendix

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