Documents to produce
This section brings together outputs from the ‘Demand analysis’ and ‘Supply analysis’ modules and is really where the power and value of workforce planning is realised. It aims to:
- identify the gap between current supply and current demand and future supply and future demand over the full forecast period
- identify the key time points that skills and capabilities are required and in what numbers
- assess the likelihood and magnitude of the impact of each gap, to grasp their criticality (risk analysis).
The gap analysis is key in informing workforce planning strategies (refer to Table 2 in the ‘Workforce planning explained’ module).
There are two types of gaps: shortages and surpluses. A shortage occurs when workforce supply falls short of demand (that is, there is an insufficient amount of skills). When workforce surplus exceeds demand, there is a workforce surplus.
Depending on your demand and supply analyses across your forecast period, you will define gaps in quantitative or qualitative terms. If you attached numbers (expressed in full-time equivalent (FTE) or headcount) to particular job families, job functions, job roles or skills and capabilities in your demand and supply analyses, you can also define your gaps in numbers. You will need to count the difference between current supply and demand to obtain the gaps that require immediate attention, while calculating the difference between future supply and demand identifies your future gap.
If you have not attached numbers to your workforce supply and demand, you will need to critically review your qualitative analysis of current and future workforce supply and demand to estimate where gaps exist currently and where potential gaps are likely to occur in the future. Even when there are uncertainties surrounding the potential gaps, it’s a good idea to record them, so strategies can be developed to respond to potential shortages and surpluses.
Once you have identified the gaps, you need to analyse their ‘criticality’. What matters for criticality is the:
- likelihood of the gap occurring
- consequence of the gap occurring.
Table 1 provides a simple risk rating matrix for your reference, however it’s recommended that you use your organisation’s risk management framework in the first instance.
You should be able to assess the gap likelihood based on information from your supply and demand analyses using Template 15. To determine the consequence of the gap, you may need to also consult with line managers who understand what it would mean for your organisation in practice. Combining your understanding of the likelihood and the consequence, you will be able to assess the overall risk of each gap. Likelihood, consequence and risk should each be classified as high, medium or low. Knowing the criticality of each gap becomes important when you develop and prioritise strategies to address the gaps.
Key questions: Gap analysis
- What job family, job function, job role, skill and capability shortages and surpluses currently exist in your organisation?
- What job family, job function, job role, skill and capability shortages and surpluses are expected to appear in the future?
- What is the gap between your current workforce demand and your future workforce demand?
- What is the gap between your current workforce supply and your future workforce demand?
- Which are the most critical gaps now and over your forecast period?
- When are your most critical gaps?
- Which are likely to be the most critical gaps in the future?
- After considering the information and suggested outputs in this section, you should be able to progress your workforce planning as you would have developed a:
- gap analysis
- risk analysis of the gaps
- Workforce plan. The information contained in these documents will inform the ‘Gap analysis’ section of your workforce plan. Refer to Appendix B of the ‘Workforce planning explained’ module.
Strategy and initiative development
(15) Risk and options analysis
Documents to produce
Risk and options analysis
Once you have identified the current and future workforce gaps over the forecast period, and have an understanding of which represent the most risk to your organisation, you will need to develop strategies or initiatives to close the gaps and therefore mitigate the risk associated with each. These strategies or initiatives may already exist in your organisation and need to be aligned to each risk, or modified to increase the probability of mitigating the risk.
If you’re developing a strategic workforce plan, you need to develop these strategies at a high level and inform strategic human resources (HR) policy direction. If you’re developing an operational workforce plan or a workforce management plan, you will be looking at developing practical and actionable strategies, usually referred to as initiatives or interventions.
You should bear in mind that mitigating the risk posed by the gap is not necessarily always your best option. Sometimes, when the gap is not too critical or the cost of risk mitigation is too high, you may choose to accept the gap. In such cases, identifying the gap is, in itself, the most important aspect.
You should consider several options when addressing or mitigating workforce gaps. Broad themes might include:
- influencing demand, which may include:
- influencing the internal or external business drivers through policy reform
- changing the way in which your organisation functions (for example, management practices, information technology systems, business process redesign).
- influencing supply, which may include:
- establishing and maintaining partnerships with other agencies or departments, or educational institutions to increase external talent pools and the talent pipeline
- establishing and maintaining cadet or graduate programs
- improving the availability of the current workforce
- attracting and recruiting external people to fill the gap
- training existing staff in line with new skill requirements.
- influencing workforce productivity, which may include:
- using your employees differently to fill existing or emerging gaps (for example, job redesign, restructure, redeployment)
- shifting relevant tasks to another part of the agency or department that has the skills and capabilities necessary to undertake them.
Strategies and initiatives need to be tangible and SMART. The best strategies address the root cause of the issue and can only be developed if the root cause is fully understood.
Table 2 lists suggested themes which may help you develop strategies and initiatives specific to your organisation. Be aware of existing workforce and HR strategies and initiatives, as you may be able to build on these instead of developing new ones. You may also want to build partnerships with other organisations facing similar workforce issues, such as joint training courses and secondments, which can constitute efficient solutions to some workforce problems.
It may not be feasible to develop strategies and initiatives for all of your gaps. You may instead prioritise your top three to five gaps and, for each of these, develop at least one strategy or initiative. You will need to identify impediments to these strategies and initiatives, as well as additional benefits from them. You should also ensure they align with your organisation’s objectives and values, and assess the overall likelihood of their success and impact in addressing the gaps. You can use Template 15 to assist you in collating all strategy and initiative options.
For greater executive buy-in, particularly if the chosen strategies and initiatives require funding, it’s recommended you at least approximately cost and align them to their proposed impact.
Leadership development program ($1 million over four years)
= increased leadership performance by 5% (measured through upward feedback or staff surveys)
= reduced staff turnover at lower levels by 2%
= $xx savings in recruitment costs.
Table 2. Elements of workforce planning strategies and initiatives
Recruitment and selection
- Recruitment and selection processes
- Community involvement
- Induction and on-boarding
- Diversity initiatives
- Advertising, branding, reputation
Leadership development and talent management
- Partnerships with other organisations
- Apprenticeships, internships, cadetships
- Involvement with educational institutions
- Succession planning
- Graduate programmes
- Accelerated pathways
- Mentoring, coaching, shadowing
- Secondments and placements
- Development pathways
- Leadership, learning and development interventions and programs
- Talent management strategies
Employment conditions and remuneration
- Pay rates and ranges
- Workplace agreements
- Incentives and allowances
- Phased retirement, redeployment
- Leave management and flex time
- Flexible work options
- Work-life balance
Organisation and management development
- Knowledge management
- Operational procedures and processes
- Management systems
- Information technology solutions
- Business process redesign
Structure and job design
- Operating structures
- Reporting lines
- Flexibility, variety, complexity, autonomy
Employment type and classification
- Permanent and contract
- Classification levels
- Temporary and casual
- Full time and part time
- On-the-job development
- Management and core skills development
- Mobility or secondment opportunities
- Study leave
- Project work groups
- Career planning
- Portfolio careers and agency and department partnerships
Performance, recognition and reward
- Team and individual recognition and reward
- Goals for performance
- Feedback processes
- Formal and informal recognition
- Review and evaluation
- After considering the information and suggested outputs in this section, you should be able to progress your workforce planning as you would have developed a ‘risks and options analysis’ and identified and prioritised the strategies and initiatives required to address your workforce gaps.
- Workforce plan. The information contained in these documents will inform the ‘Workforce strategies’ section of work your workforce plan. Refer to Appendix B of the ‘Workforce planning explained’ module.