CIPD Podcast 46 - Workforce planning

Date: 07/09/10 Duration: 00:30:49

In this podcast Angela Baron, CIPD Advisor, Hazel Stimpson, HR Manager at Harrod UK, Commander Iain Upton of the Royal Navy and Samantha Rich, Head of Group Attraction and Talent at AXA UK Plc discuss workforce planning and how they are meeting the challenge of having the right people in place to deliver their short term and their long term objectives. 


Philippa Lamb: Hello and welcome to the podcast. This time we're looking at workforce planning and we're going to be exploring how a handful of leading organisations, both public and private sector, are meeting the challenge of having the right people in place to deliver their short term and their long term objectives. 

Now you can probably hear from the seagulls above me that we're out and about for this month’s podcast. Today I've come to Lowestoft on the Suffolk coast to visit a company called Harrod UK. 

Harrod is Britain's leading supplier of sports equipment and its customers include a stellar line up of household names such as Twickenham and Wembley along with a host of premier league football clubs. 

The company employs about 120 today but it has grown from very small beginnings back in 1954 when Ron Howard began converting old herring nets into garden netting using skills more traditionally associated with the declining local fishing industry. 

I've come along here today to talk to Hazel Stimpson. She’s the HR manager and she's going to talk to me about the role of workforce planning and how they do it here at Harrod. 
So Hazel what’s your definition of workforce planning? How do you define it?

Hazel Stimpson : Workforce planning to me is getting systems and procedures in place so that you've got the right amount of people with the right skills, the right behaviours, working in the right place at the right time, now and in the future.

PL: And what does that achieve for the company?

HS: It ensures that our customer service is as good as it can be, that we can fulfil the marketing plan and we've got our workforce that is suitably motivated to carry out the job, to want to learn, to want to improve.

PL: Obviously here you've got a range of people doing a range of things from office-based workers right through to the people actually on the factory floor.

HS: That's right.

PL: So what sort of jobs are they doing? What sort of training are we talking about?

HS: Well thinking about the office you've got administration staff and you've got customer service staff. The business is seasonal. What happened historically a few years ago it was established that the sports side which is the main part of the business was extremely busy from July through to October and then it tailed off and we were looking for ways of keeping the staff that we have, or the employees, fully employed all year round and somebody came up with the suggestion well we make the posts, we make the nets, why don’t we try making fruit cages and that's when the horticultural division born. So what that effectively meant workforce planning-wise was that the employees that we use in the sports side then had to be trained to cover the mail order side.

PL: Yes I mean you’re talking about skills and training presumably this is a key part of this whole process.

HS: Yeah I think everything comes down to that training.

PL: What sort of skills are your people using on the factory floor?

HS: We've got welders, we've got people who are cutting, drilling steel, aluminium. They work with wood. There's some painting. We have a spray line. We have a netting department. It takes two years to fully train somebody to carry out all the relevant netting operations. I'll show you round the factory in a little while and you can have a look.

PL: Shall we take a look down there right now and see what they’re up to? 

HS: Okay yeah. We’ll go in here. So in here we have the design team. Good afternoon. So this is basically where the product starts and we've got about 10% of our workforce working in either design or research and development.

PL: Talk me through the range of products that you’re making here.

HS: Sports equipment. So that would be things like football posts, hockey posts, badminton posts, volleyball, can somebody help me what are the newest ones?
Employee: Rugby.

HS: How could I forget rugby? 

PL: Harrod UK’s workforce planning takes place as part of the annual business planning process. This starts in November each year with a meeting involving the entire workforce. It’s a two-way process, fostering a collaborative partnership with the managers, facilitators and employees. Hazel told me how it works.

HS: We all go offsite, probably split the workforce into half and we meet in the local hotel, we’ll have breakout tables and we’ll talk about what’s been good, what’s not been so good in the past year, what we want to get next year.

PL: Have you had good ideas come out of those meetings?

HS: Yeah, well it was from one of those meetings that the horticultural division was born.

PL: So a really big idea?

HS: It was a big idea yes and now as I say it’s a massive part of the business. We’ve had double-digit growth over the last consecutive five years.

PL: And presumably it’s that sort of innovation that drives the growth of the company well nationally and possibly even internationally?

HS: Yeah, nationally and yes we do have some international business as well. We’ve started to export to Australia. We've got our goalposts in Real Madrid and we supplied the goalposts for the under 17 World Cup in Nigeria towards the back end of last year. 

PL: Let’s go and have a look at the factory floor.

HS: Okay come with me.

PL: We’ll visit the factory with Hazel in just a moment.
Meanwhile the CIPD has just published a workforce planning guide drawing on the findings from a major survey of employers. It’s available to members on the CIPD website, there's a link in the show notes. I met with Angela Baron the CIPD’s OD and Engagement adviser, to discuss the findings and although it’s clear that workforce planning is a core HR process there are varying ideas of the exact definition. 

Angela Baron: If there is a common definition probably the best one is about right people, right skills, right place, right time.

PL: So at its most simple it’s the right workforce to deliver the objectives to the organisation not just now but down the line? 

AB: Absolutely and that is a very good comment actually - not just now but down the line because an element of workforce planning is about this issue of balancing today’s operational needs - so what do I need today, next week, to staff the call centre, to fly the aeroplane, to produce enough cars coming out of the factory gates to meet the orders that are already on the order books but also what do I need to be doing now to plan for the future to make sure that I'm developing the right skills, to make sure that I'm getting the right talent into my organisation, people with potential to grow, develop, that I can be the kind of flexible, agile organisation that's going to respond to future scenarios? 
And that was one of the problems with the manpower planning of the past that often the plans were out of date before they left the drawing board because they looked at - what have we done historically, and what does that tell us about the future? And we now know that the past often has very little to tell us about the future and that we have to get a lot smarter about looking for information, about horizon- scanning, about gathering intelligence about what the future might hold.

PL: In fact the survey showed that most organisations plan for the next one to two years and a fifth plan less than a year in advance.

AB: It kind of fell out of fashion a bit and as I say, a lot of that was due to the fact that the sort of, if you like, traditional style of manpower planning, about looking historically at how many people we need on the production line, how many people do we need to deliver particular services? The plans were out of date very quickly because the pace of change accelerated so fast about 20 years ago: change really took off and these plans were just out of date before they even left the drawing board. And if you just look at the experiences of some of the industries, you know, who predicted the rise of the digital industry for example, the internet?  Look at how that has fundamentally changed work, changed roles, changed the way we deliver goods and services.

PL: I know looking at your research I think one in five organisations are only planning about 12 months ahead and most of them are only looking one or two years.

AB: Yeah.  Yeah, that is true. I mean there were exceptions to that. There were organisations that were looking 20 years ahead and it does depend on industry, of course. Some industries need to plan further ahead than others, notably the health profession where workforce planning has remained quite high on the agenda throughout because they’re continuously scanning the horizon, thinking about the population, thinking about how many older people we're going to need, how many children are going to be born; but what we're seeing is more and more that planning - yes, it is about that sort of short, medium term - what do we need next year in terms of people in our organisation, to meet demand - but they are horizon-scanning. They have got processes in place which means they are looking for information, they’re capturing that information, they’re using it to inform their business planning process and then hopefully they can review those operational plans quite quickly to make sure that they’re not going to make the kind of damaging, knee-jerk reactions that maybe they would without those processes in place.

PL: Back at Harrod UK Hazel took me onto the factory floor where their goalposts are put together.

HS: You need to keep to the wall please. Over here you've got Billy; he's cleaning up some of the material that’s already been cut. Michael is drilling over in the corner and you've got Mark who’s cutting some of the steel that's come in. This is the steel workshop. We've got an aluminium workshop over the road.

PL: We can’t hear ourselves speak in here.

HS: No you can’t. We’ll now go through to the welding area. It’s a little bit more quiet.

PL: Okay.

HS: If you just follow me.

PL: This is an old fashioned factory floor in the sense that we think of industry it’s not like the automated production lines that you see in car factories nowadays. It’s guys doing heavy, heavy, dirty work. So we’ve got a group of men over here welding there's sparks showering all over the floor so I'm keeping my distance at this point. What are they up to in here Hazel?

HS: I'm not certain what they’re welding let’s ask. Hang on a moment. Hello Phil what are you welding at the moment?

Phil: Five aside football goals.

HS: They’re five aside football goals.

PL: We were talking earlier about this big November meeting that you have each year where the whole company gets together and thinks about what’s been achieved and what needs to be done in the future. Now that obviously feeds into your workforce planning process. I know you produce an annual business plan, I think in February the following year don’t you, each year? 

HS: That's right.

PL: But you also plan over a four year timeframe don’t you? How did you arrive at four years rather than five or ten or even 20?

HS: Well we were… because we're such a dynamic business and because we had this double digit growth on the horticulture side, because we had this change of direction for the business almost we needed to make certain that the plan was as realistic as it could be and five years was too long a period to predict.

PL: And do you find that your annual business plans each year are quite remarkably different from the previous one?

HS: They are, for example, and I've brought you a sample here there's a leaflet there, everyone in the shop floor will have one of these and you can have a look at that.

PL: So this is a leaflet about the key drivers….

HS: The key drivers…

PL: …behind this whole process.

HS: …so everybody in the company will know what the strategic aims for the company are for the current calendar year and they will have had input to this so something that may have come from that business planning session that's led into that so you'll see… 

PL: This is covering things like leadership, people, policy and strategy… 

HS: That's workforce planning.

PL: …a whole array of things?

HS: Mmm. 

PL: So you feed all this back down to the workforce?

HS: Yes. So everybody will now that we are looking into succession planning for netting expertise, Lorna our netting manager is due to retire this year and the plans are coming to fruition. You’ll see that when we go around netting in a short while.

PL: Okay let’s move on to there now shall we? Workforce planning incorporates a number of different elements - succession planning, leadership policy and strategy. I talked to Angela about the picture her research paints of workforce planning today.

AB: When we asked people what activities they did under the banner of workforce planning, there was a very broad range of activities, you know, there was quite a lot going on under that banner, but clearly the main ones are around talent planning, are around development and are around resourcing issues, about understand the kind of people you need to recruit and about understanding also the need to balance the need to recruit externally to refresh your talent at different levels in the organisation and the need to develop people to grow into roles internally. 
So it’s about getting the right balance there because yes, internal development is really good and can help you build commitment, can help you build job satisfaction with people, build engagement, and some people saw engagement, you know, getting people who were motivated to perform and develop as part of workforce planning as well. So it can be critical to that but also as a business you need to be scanning the horizon and seeing what fresh talent might be out there to bring in and you've got to get the right mix between the two.

PL: Whatever the relationship between workforce planning and other HR activities, the crucial factor is that there's alignment between the different activities and that they support each other. In larger organisations this will require communication and cooperation with colleagues elsewhere in the business but with an organisation as large as the Royal Navy workforce planning is a huge challenge. Commander Iain Upton is a strategic workforce planner in the Royal Navy.

Iain Upton: We're about 35,500 people strong now and in the time I've been in the Navy which is nearly 30 years, and it shocks me to admit that, we've halved in size. When I joined we were about 70,000 strong.

PL: Do you grow all your own people? Do you ever buy people in at a more senior level or do they all come through?

IU: We don’t buy anybody in… 

PL: Right so you really do need to plan.

IU: …so that everyone starts at the bottom rung of the ladder which is a serious constraint in some ways but it’s very helpful for planning purposes because we know how long it takes to get people to various stages and also, if we think in ten years time we need these sorts of skills, well, we've got ten years to work on the people we've already got, to train them, develop and adapt them, because all our training is done in house as well.

PL: Well that brings me to my next question which is, I was thinking about the Navy and the constraints and calls on the Navy and the word that came to mind was complete unpredictability. How can you know what the calls on Navy personnel will be, two, five, ten years down the line?

IU: That's probably our main challenge and that varies from the detailed, what sort of skills do people need, we've moved to much more automation over the last 20 years, as has the rest of the world, but also what is the government going to ask of us to do so how many, and how much money are they going to give us? We don’t control our own destiny which is very upsetting for us who like to be in control. So we're given a budget and we're given a set of outputs to achieve and that looks sort of ten years ahead but changes every… well it can change at six months notice. So it is unpredictable. It is difficult to plan but that doesn’t stop us planning because if you don’t have a plan then you've got nothing to adapt or change from. It gives us a baseline and a baseline cost which is very important. 

PL: Despite all the change that Ian has to deal with it’s clear that much of the workforce planning he has to do remains consistent over time. Elsewhere there's a real sense that workforce planning has to do more today than it may have done in the past. Angela Baron. 

AB: The traditional workforce planning was all about the hard measures, was all about, you know, how many people do we need to do this particular thing so how many people do we need to recruit and it’s about, yeah, we need to understand that and we need the hard measures about our workforce, understanding our workforce, what we've got, what we can do with it, but we also need to put that in the context of strategy and in the context of a sort of strategic planning, more about scenario planning, more about understanding a range of scenarios that might crop up in the future and about developing the flexibility and the agility within the organisation to cope with any one of those scenarios. So not going down a sort of fixed, rigid path which is dictated by the numbers but having a planning process which is informed by the numbers but is also informed by some critical analysis and some real deep thinking about how the business might be taken forward in the future. 

PL: So if you’re going to understand this process effectively you really need to understand your drivers don’t you internal and external?

IU: Yes you do, yes and you need to understand your stakeholders as well internal and external. You need to understand that your workforce planning is not just about the people who actually work for you it’s about the people who might work for you in the future. So it is about thinking ahead, it is about looking to make sure that the skills training is out there. Some of the organisations we talked to were creating links with universities and colleges for example, offering placements, just trying to sort of beef up the kind of skills training that was available to make sure that they would have people coming through with the right kind of skills into the labour market where they might be recruiting in the future. 

PL: Quite apart from the shifting sands of international diplomacy they’ve also got a strategic defence review looming, all framed by severe constraints on every aspect of public spending. Commander Iain Upton.

IU: We're desperately trying not to completely second guess what the outcome of the strategic defence and security review is going to be. We have a suspicion that we won’t be larger than we are now.

PL: Right.

IU: And we're used to managing a reduction in our workforce but we think probably the reduction will be steeper than we normally manage so we're putting our sort of sensors out and we’re looking at the kind of levers we can pull or doors we can open to reduce the size of our workforce in a variety of different scenarios.

PL: So if you accept in a pragmatic way, as I imagine you have to, that you will be looking at cuts now and possibly for some time to come, how do you then, given you do grow your own people from scratch, deal with a scenario five years or ten years down the line when you suddenly need a lot more people? 

IU: With a lot of difficulty. Because we grow people from the bottom rung and we need to keep them for a long time we don’t have easy exit points in the middle of their career, that's where we really need our people because that's where they’re delivering operational capability at sea so we can easily tinker around at the earlier end of the spectrum, stopping or slowing down recruiting or we can not extend people at the end of their careers but both of those levers that we operate have disadvantageous outcomes. If we stop recruiting that means we have a hole in our service that will work through the next 20, 30 years of people we just didn’t recruit and we did that in the mid-90s and we're learning, to our cost, that's a dangerous game to play. It saves money now but it makes our sustainability and our operational capability less in the future.

PL: And do you expect to face that challenge again now? 

IU: Absolutely yeah. So we've got to balance that with letting people go at the top end of their career when we’d really like to keep them because they’ve just got the skills we need but we can’t afford to. So redundancy is always an option but it costs money in the short term and that's what we just don’t have, money in the short term, so we're probably going to have to work at both ends of that 30 year sort of career continuum that we like to manage, trying to get the right balance, the right compromise without either affecting current operations or future operations. 

PL: This sounds like an extraordinarily difficult scenario to have to deal with.

IU: It’s a compromise on a compromise and we just have to get the best balance that we think is affordable at this point in time.

PL: Because you, the Navy, need to be fit for purpose presumably at the drop of a hat… 

IU: Yes.

PL: …and yet government spending restraints means that that's almost an impossibility for you isn’t it?

IU: It’s not an impossibility because we've always met the challenges we've had to face. As an organisation we will always meet what we're given but it puts more and more stress, challenge onto our people.

PL: So given the drivers we've talked about for the Navy, both internal and external, presumably you have to constantly review even more than other organisations, your workforce planning?

IU: Yeah it’s a full time discipline for myself and my colleague who look after the very top level of the numbers of officers and the numbers of other ranks and ratings and then a whole realm of other people who look in more detail at the specialisations. So there's a good team of 30 to 40 people who are looking at this kind of issue full time and we review it formally every six months but we're always, you know, it’s our full time day job to keep on top of this.

HS: And now through here we've got the netting factory and here’s another example as we go past these are what we call our CIMs targets, our customer improvement measures, and here you’ll see we've got unplanned absence… 

PL: Many difficult factors play a part in workforce planning. I asked Hazel how they all come together at Harrod UK.

HS: We look at labour turnover, labour stability, length of service as well. They’re all things that we measure.

PL: I'm interested to ask you actually, about the physical process or the intellectual process of the workforce planning because some companies, obviously it’s a highly computerised process, from what you’re telling me yours is much more verbal and mental, you ask people, you share information, you sit down and draw conclusions, would that be fair to say?

HS: We do but there is a bit more of a theoretical approach as well.   For example, we’ve got Excel spreadsheets set up.  I've got a training matrix on an Access database that enables me to produce reports which can be displayed which will show the current level of skill for a particular area.

PL: Tell me about the seasonal nature of your business, obviously we've mentioned the fact that you’re divided between the horticultural and the sporting business but how does that actually break down throughout the year?

HS: Well as I say the sports tends to be very busy from July through til September/October, the mail order side starts getting busy in July and there's a gradual increase through February/March and you get perhaps Easter and the demand will suddenly go up. That's when we find that we have need for some temporary staff, we employ agency staff for that period of time. 

PL: What sort of factors play into your workforce planning because as you say it’s seasonal, you must have a good idea of what sort of range of people you’re going to need but presumably there are other factors that vary year to year? Are you affected by issues like weather? 

HS: We can be and in fact we were this February. We were expecting to be quite, quite busy in February, but we had those two terrible weekends of snow. So we had a team, a nucleus ready to start training, ready for the influx and it didn’t happen and we thought, ‘Oh dear, it's not going to be a good year,’ but it changed and then we were a lot more busy later on and I'm afraid we got a bit caught out this year. We didn’t have the operations up and running in the background in the mail order section as we should have done.

PL: But that's the nature of workforce planning isn’t it you can build in all the factors you can imagine, you’re predicting, and there's always that unpredictable element that crops up…

HS: That's right.

PL: … and takes you by surprise.

HS: But that's what makes it more interesting.

PL: One organisation that's taken the calculation of future events to a whole new level is AXA UK plc. Samantha Rich is their head of group attraction and talent. She joined a few years ago when the recruitment team, whilst extremely effective, worked in a commercial vacuum, recruiting when asked to, often in an emergency with 80% reliance on agencies which was expensive and stressful. Samantha took on the role of investigation whether a computer could link all these areas in an effective way.

Samantha Rich: So I went out and I was just kind of looking around what do other companies do not just in our sector but in other sectors, couldn’t find anyone doing anything, so I said, “Well I want to have some way of connecting the budgeting process with the recruitment process, with our performance management process, with any other sort of systems I could possibly lay my hands on,” and so obviously I had to then decide well what was I going to do with that information once I had it and I thought, ‘Well okay I could get a cottage industry of people in the room and ask them to analyse all of this data and see actually what it tells them, it might not tell them anything and it might not be any sort of call to action or catalyst to do anything different.
So I started working with a company that helped me build this sort of black box that enabled me to plug in all of these other systems and use artificial intelligence. So I thought, ‘Oh my gosh that sounds really scary - I'm not a techie person,’ I didn’t know what that meant.  Ultimately all it does is it takes random pieces of information from all of these systems and it does thousands of calculations and pieces of analysis in split seconds that it would take you and a cottage industry years to do, and it actually then predicts, based on historical information, so how much money we've spent in the past, how much money we've had available, how overspent we were, which agencies we went to from a recruitment perspective, which managers recruited, how well did they perform once we’d hired them, from which source, and then it was able to actually use this artificial intelligence to then predict when those vacancies were going to occur again in the future. 

PL: Although it still relies on business strategy information to be input by humans, for instance if they’re selling on part of the business or if an unpredicted global event emerges, this highly technical response has made them far more efficient than they were.

SR: It’s about 80% accurate. So based on the quality of data that goes into the computer, you know, it can’t be used in isolation because it’s only a computer so it does need obviously that human analysis over the top to say, “Well yes but…” it basically just saves us days and days and days worth of donkey work and legwork for us actually analysing all of this information ourselves manually, it gives it to us instantly and we can then decide what we do with it, who we need to talk to and what other sort of factors we need to overlay on the top to sort of reason it a bit more. 

PL: The black box that Samantha Rich has introduced at AXA is something many HR departments would relish the use of but when it comes to doing it yourself is it as easy as a one size fits all? Here’s Angela Baron.

AB: I mean, we have been able to put some models together in the guide. We've been able to put together a process model where we can identify a kind of critical path that people need to go through to come up with a workforce planning process. We've also been able to look at the kind of information that people ought to be thinking about and trying to collect to feed into that process and we've been able to look at some of the roles and responsibilities for example that people play.

PL: And of course however they’re doing it these plans are fluid and constantly evolving… 

AB: Of course.

PL: … this is the really big message isn’t it? They are living documents.

AB: That is a huge message of workforce planning. They are not static plans. They are living documents and they should be subject to constant scrutiny and review and not just reviewing how well they are meeting their objectives but also capturing the information from that review process and feeding it back into the business planning cycle. So understanding the learning and feeding that back in so that you can get even better at it next time.

PL: So check out the guide for CIPD advice on how to do it. 

Back at Harrod UK the main message from Hazel Stimpson is an old one but an endlessly important one: communicate. Generally speaking you need to be pretty agile in terms of your planning, I mean you have a structure in place in a sense, the November meeting, the February business plan… 

HS: Yes.

PL: … the one year plan, the four year plan but there's always those imponderables and intangibles that crop up…

HS: …that's it.

PL: … that you need to respond to in the moment. So I guess you must get used to having to think on your feet as a business?

HS: Yeah you do there's always tweaks that you need to make.

PL: But all that relies on flexibility amongst your people?

HS: Oh yeah we've definitely got that. The business wouldn’t be here if we didn’t have the flexibility but it works both ways as well.

PL: What do you think has won you that flexibility because a lot of workforces won't give that to their management?

HS: I think it’s communication. We have cross-functional meetings once a month, they’re chaired by the manufacturing director, so everybody will get the same message and it’s a real message on perhaps the state of the economy, the price of steel, the price of energy…

PL: So the people who work here understand the drivers that are impacting on the business as a whole?

HS: They do, they’ll have a general idea if the order book is up or down, if gross profit margins are up or down, that sort of thing. So when we ask people to look for efficiencies they’ll have it. Last year, beginning of the year we had, well one of the cross-functional meetings we knew things were going to be a bit tight because the economy was shrinking and we sat down and said to people, “What do we want?” and people wanted security of employment. So it was, “Okay we need to get efficiencies, we may have some shorter hours,” and people said, “Yeah, that's okay, we’ll do it so long as we can keep as many jobs as possible.” 

PL: So it’s all about bringing your people with you?

HS: Yeah, yeah. If you don’t tell them what’s going on why can you expect them to come with you?

PL: Workforce planning is moving up the agenda driven not just by current economic conditions but by the growing understanding that it can link people management to the operational business process in a really effective way. It takes top down management and an organisation-wide plan. Do it well and not only will today’s needs be met but the foundations will be in place for long term sustainable performance even if, as Harrod UK has found, the goalposts keep moving. 
The show notes that accompany this podcast as ever can be found at:

Next month we're looking at how best to manage an ageing workforce. Join me then


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