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Workforce planning
The need for workforce planning in the APS has been recognised for some time. ANAO recommended in 2001 that agencies introduce systematic workforce planning to ensure that they have the required skills and capabilities in place to enable them to continue to deliver organisational objectives now and in the future.3 MAC also emphasised the need for agencies to prioritise workforce planning in its 2003 report, Organisational Renewal. 4
In 2005, MAC found in its Managing and Sustaining the APS Workforce report that agencies’ progress in implementing workforce planning had been patchy, and renewed its call for all agencies to continue to work to establish processes for systematic workforce planning.5
This section looks at the current workforce challenges facing APS agencies, their progress with workforce planning, and the development of measures to address these challenges.
Current workforce challenges
Consistent with the trend over recent years, an increasing number of agencies reported facing workforce challenges during 2006–07. Figure 4.1 illustrates the most significant workforce challenges reported by agencies from 2004–05 to 2006–07.
Figure 4.1: Workforce challenges faced by agencies, 2004–05 to 2006–07
Figure 4.1 shows an increasing proportion of agencies facing workforce challenges from 2005 to 2007. Over this three year period most agencies reported that the greatest challenge was recruiting people (other than for the graduate programme) with required skills.
Source: Agency survey
Most agencies (88%) continue to have difficulty in recruiting people with the required skills. The majority also reported facing the loss of valued mature-aged employees (63%) and difficulty in ensuring that employees’ skills and/or knowledge meet the agency’s requirements (60%). More agencies experienced the latter two challenges than last year.
In addition, a growing number of agencies reported ongoing skills shortages during 2006–07 that are affecting their ability to achieve their business objectives. Figure 4.2 shows the specific skills shortages reported, and their level of impact on agencies’ business in 2005–06 and 2006-07.
Figure 4.2: Skills shortages and their impact on agency capability, 2005–06 and 2006–07
Figure 4.2 shows a growing proportion of agencies reporting specific skills shortages and that these shortages are generally having an increasing level of impact on agencies’ capability in 2007 compared to 2006. The most severe skill shortage across the APS was ICT, followed by Financial Management, Accounting and Human Resources.
Source: Agency survey
Over the past year, the impact of ICT skills shortages has been particularly marked. The proportion of agencies experiencing a severe impact on their ability to achieve their business objectives because of ICT skills shortages rose from 5% of agencies in 2005–06 to 11% in 2006–07. In addition, more agencies experienced a moderate impact on their business because of skills shortages in this area, up from 30% in 2005–06 to 39% in 2006–07.
Other areas of significant skills shortages were financial management, accounting, HR and project management. Agencies also reported increases in skills shortages covering legal, high-level policy/research and communications/marketing, but these shortages were less widespread and had less impact on agencies’ ability to achieve their business objectives.
These results confirm that the APS is facing a very tight labour market for a broad range of skills. The tight labour market is also reflected in the significant increase in recruitment activity over recent years with rising numbers of APS employees having applied for a job either within their own agency or in another APS agency over the past 12 months—up from 37% in 2003–04 to 49% in 2006–07.
Agencies’ progress with workforce planning
Given the current demanding labour market environment, and the generally recognised need for systematic workforce planning, it is surprising that there has been a decline in the proportion of agencies that reported having formal workforce plans in place over the past year. Figure 4.3 shows agencies’ progress with putting in place policies, strategies and/or frameworks that aim to ensure they have the skills and capabilities needed for the next one to five years. Slightly fewer agencies reported that they had arrangements in place, and proportionally more agencies reported that such arrangements were being developed during 2006–07 compared to 2005–06.
Figure 4.3: Agencies’ progress with formal workforce planning, 2002–03 to 2006–07
Figure 4.3 shows agencies’ patchy progress over the past five years with putting in place policies, strategies and/or frameworks that aim to ensure they have the skills and capabilities needed for the next one to five years. Fewer agencies reported that they had arrangements in place during 2007 compared to 2006.
Source: Agency survey
It may be that these results are attributable, in part, to agencies regularly revising their policies, strategies and/or frameworks. They are also likely to reflect ANAO’s 2004–05 audit findings that embedding an effective workforce planning process into an organisation can be time-consuming, commonly taking from two to five years for an agency to establish.6
Nevertheless, the results suggest that agencies are still struggling with the same challenges and impediments to progressing their workforce planning identified during ANAO’s 2004–05 audit, including a lack of understanding of what workforce planning means in practice, the difficulty in raising awareness and gaining acceptance from line managers, a lack of resources, the inability to collect relevant data, a lack of experience in forecasting, and the challenge of integrating workforce planning into the business planning framework.7
Supporting this view is the fact that agencies were more likely to report facing a range of workforce planning challenges in 2006–07 than in the previous year, including:
- inadequate information on the agency’s workforce skills sets, for example, qualifications (from 38% of agencies in 2005–06 to 50% of agencies in 2006–07)
- difficulty in identifying the capabilities required to deliver future workforce needs (from 36% of agencies in 2005–06 to 42% in 2006–07)
- inadequate information on the agency’s workforce demographics and characteristics (from 12% of agencies in 2005–06 to 23% of agencies in 2006–07).
These increases are likely to reflect the fact that agencies are more aware of workforce planning challenges in the difficult current employment environment. Nevertheless, they reinforce the importance of improving organisational capability in this area.
Measures to deal with workforce challenges
Although some APS agencies are struggling with comprehensive approaches to workforce planning, the majority of agencies report putting in place more specific measures to deal with workforce challenges. These include:
- recruitment strategies aligned with identified workforce requirements (68% of agencies)
- learning and development strategies aligned with identified workforce requirements (70% of agencies)
- performance management systems aligned with identified workforce requirements (73% of agencies)
- measures to attract and retain people with critical skills (78% of agencies).
Almost all other agencies reported they were developing measures in these areas during 2006–07.
Of the specific measures to deal with workplace challenges included in the agency survey, the only one not adopted by a majority of agencies was succession management. Only 23% of agencies reported having in place during 2006–07 a succession management strategy linked to future workforce needs, a similar result to those of previous years. More agencies, however, reported they were developing this measure (57% of agencies during 2006–07, up from 48% of agencies during 2005–06).
Agencies were asked for the first time in 2006–07 if they had a talent management strategy targeted at high-potential employees in place. Only 5% reported that they did and another 20% of agencies reported they were developing this measure. There is significant potential for agencies to take a more strategic approach to succession planning and talent management.
The widespread use of individual measures to address workforce challenges is encouraging. Nevertheless, it is likely that they would be more effective if they were part of a broader framework that acts as a workforce planning ‘umbrella’, linking the array of operational HR measures to the agency’s future skills and capability needs.
The following case study illustrates how workforce planning can play an important conduit role in the agency, both informing and supporting effective business planning, and in turn, setting the direction and scope of the agency’s specific HR strategies and initiatives.
Department of Education, Science and Training (DEST)
DEST’s Strategic Human Resource Management Framework
Workforce Planning
Workforce planning is a critical element in DEST’s Strategic Human Resource Management Framework. It creates a bridge between business planning and HR strategies and practices covering recruitment and selection, learning and development, performance management, recognition and rewards and workplace wellbeing.
DEST has integrated its workforce and business planning processes which means that managers now consider the capacity of their people in planning for the delivery of business outcomes.
DEST’s workforce plan continues to evolve. Currently, it provides line areas with a comprehensive understanding of their key workforce challenges for the next business year. as the next step, DEST is looking to build on this approach by examining the possibility of introducing scenario planning to assist in the longer-term assessment of people capability issues.
Recruitment
DEST continues to improve its recruitment processes to ensure it meets the need for ‘the right people, right place, right time’. To achieve greater recruitment flexibility and responsiveness, DEST is piloting an approach where business areas are provided with increased coordination assistance and expertise from the Corporate Group. The new approach removes all but the essential decision-making related tasks from managers, to achieve a more resource effective and efficient process. It ensures opportunities are used to integrate similar recruitment processes across business areas.
DEST is also streamlining the selection process by embracing broader advertising and relaxing the traditional requirement to address selection criteria in a formal structured way. This approach worked well with DEST’s recent ‘Great Futures’ recruitment campaign, which attracted 1,430 applications and successfully filled 220 jobs at levels from APS 4 to EL 2.
Attraction and retention
DEST’s Strategic Plan 2006–2008 cites ‘Be an employer of choice’ and ‘Strengthen leadership skills’ as two key strategies to build capacity in its workforce.
The agency utilises the annual staff survey to collect information on what organisational factors attract people to the agency and what retains them. The survey design yields valuable information on employee engagement covering four dimensions—advocacy, commitment, motivation and satisfaction. Stronger alignment between all DeST staff survey initiatives (annual as well as exit and entry surveys) is a future priority which will provide valuable information about employees at different stages of the employment lifecycle.
DEST’s strong commitment to a ‘caring for our people’ culture, underpinned by effective leadership, has been found to be a key attraction and retention factor. This commitment to caring for its staff is demonstrated through the agency’s performance management and remuneration processes where ‘displaying desired behaviours’ is given equal weight to ‘producing business outcomes’. It is also verified by the results of this year’s State of the Service employee survey. When asked to identify the reasons that kept them working at their agency, DEST employees nominated ‘agency respects its employees’ and ‘agency has been recognised as a good employer’ at one of the highest levels of any agency with individual results.
3 ANAO 2001, Planning for the Workforce of the Future: A Better Practice Guide for Managers, Commonwealth of Australia, Canberra, <http://www.anao.gov.au>
4 Management Advisory Committee 2003, Organisational Renewal, Commonwealth of Australia, Canberra, <http://www.apsc.gov.au/mac>
5 Management Advisory Committee 2005, Managing and Sustaining the APS Workforce, Commonwealth of Australia, Canberra, <http://www.apsc.gov.au/mac>
6 ANAO 2005, Workforce Planning, Performance Audit Report No. 55, 2004–05, Commonwealth of Australia, Canberra, <http://www.anao.gov.au>
7 ANAO 2005, Workforce Planning, Performance Audit Report No. 55, 2004–05, Commonwealth of Australia, Canberra, <http://www.anao.gov.au>
