WORKFORCE PLANNING

AUDIT SURVEY

I&E Employment Research January 2008

INTRODUCTION Effective workforce planning should support any comprehensive workforce strategy. It encompasses both the identification of skills and staff resources needed to deliver the high-quality services required in the future, and an analysis of the existing workforce to enable the identification of shortages and gaps. Workforce planning continues to be high on the local government agenda, with the recent publication of the revised local government workforce strategy1 and the Audit Commission’s consultation2,3 on the use of resources including … how the organisation … plans, organises and develops its workforce ….as a KLOE (Key line of enquiry). Workforce planning is obviously ‘not an end in itself’ and any discussion should not be a theoretical debate about the technique itself, but should focus on the extent to which it is practicable for the boroughs to use workforce planning to support the development of effective solutions to their workforce challenges. This report is based on the replies to the workforce planning audit survey supported by information from a number of other sources. The research is not definitive and its aim is to provide an indicative summary for discussion. WHAT IS WORKFORCE PLANNING Put simply, workforce planning is about determining the actions which need to be taken today to provide the workforce for the future. In broad terms the main elements of workforce planning are:

Developing scenarios - how the future might look, what will impact on the borough and how the borough will position itself.

Demand forecasting - making workforce demand forecasts under each scenario; including an understanding of other organisations’ demand for the skills the borough requires.

Supply forecasting - making workforce supply forecasts based on internal and external workforce information.

Gap analysis - developing strategies to bridge any demand/supply workforce gaps identified.

The ultimate goal of workforce planning is not just to understand the number of people required, but to identify any skills gaps. The problem which most organisations have is not so much the number of staff, but rather having the people with the right skills to deliver what is required. Workforce planning should also be an integral and critical part of service planning and a driver for the HR strategy, and its success is dependent on how it is integrated with other planning processes. It is the people equivalent of the financial plan and a critical component of a borough’s service strategy.

1 http://www.idea.gov.uk/idk/aio/7634217 2 http://www.audit-commission.gov.uk/localgovernment/useofresources/consultation2009.asp?CategoryID=english%5E576

3 Refer to Appendix 6.2: Audit Commission Key Line of Enquiry 3.3 – Workforce Matters

Equally, it is also important to remember it is a plan, a guide to assist in decision-making; it is not a definitive course of action. As with all strategic planning, balanced and informed judgments are essential. A workforce plan should be reviewed, revised and updated on an ongoing basis; it is not a ‘one off’ action. Infohrm’s workforce planning model is shown in Appendix One and some basic workforce planning concepts are highlighted in Appendix Two. WHY UNDERTAKE WORKFORCE PLANNING? IN GENERAL Views on the efficacy and value of workforce planning obviously differ. Its ‘designed’ aim is to reduce service strategy delivery risks associated with workforce capacity and capability by ensuring the workforce required to meet future service needs is being recruited and/or developed. Workforce planning is not easy and it has a somewhat patchy track-record. Many of the issues surrounding the failures appear however to relate to a misunderstanding of the process and aim of workforce planning, rather than inherent problems with the practice or models. As indicated, it is not a stand-alone once a year event conducted using a fixed template for all services. Rather it should be an ongoing process which reacts to both internal and external changes and is sensitive to the differing needs of services. It cannot, and should not aim to predict the future. Rather it should set the context for other plans and challenge the assumptions that short-term thinking can create. IN LOCAL GOVERNMENT Available evidence suggests that there is a developing view that the successful implementation of workforce planning in local government is likely to help improve the efficiency and effectiveness of the sector. Workforce Strategy The revised local government workforce strategy makes a number of references to workforce planning, including: Councils, their partners and regional bodies need to work together to anticipate and tackle the key occupational shortage areas. …..but all authorities would benefit from making workforce planning part of their service, corporate and partnership planning processes. Future shortages need to be anticipated as the policy or environmental context changes. Comprehensive Area Assessment: Use of Resources

The Audit Commission’s consultation on the use of resources under the CAA includes the following:

Theme 3: Managing other resources: How well does the organisation manage its natural resources, physical assets, people and technology, to meet current and future needs and deliver value for money? KLOE 3.3: The organisation is forward looking as it plans, organises and develops its workforce and information technology to support the achievement of its strategic priorities. Evidence that the organisation: has a skilled, productive workforce; knows in the medium to longer term what staff it will need, with what skills and

technology, and has plans to achieve this; uses technology to provide information to improve the quality of decision making

and secure efficiencies; and uses technology to support transformational change of services.

THE RESEARCH The main information sources for this report are: an audit survey which aimed to identify boroughs’ perceptions of their capability

and capacity to undertake workforce planning the initial findings from the London Councils recruitment & retention (R&R) survey the results of the London Councils employee turnover survey a brief literature review and web search

As indicated earlier, the research is not definitive and its main purpose is to act as a catalyst for discussion. SUMMARY OF FINDINGS The research findings indicate: of the twenty-four responding boroughs, twenty-one indicated they undertook

some form of meaningful workforce planning

as a generalisation it would appear that the boroughs’ approaches to workforce planning are perhaps insufficiently focused on the future

there are low levels of formal workforce planning, particularly integrated workforce planning

in some boroughs organisational inertia makes it a struggle to gain senior and

line management commitment for workforce planning progress is hinder by a lack of organisational capacity and capability to undertake

workforce planning; the lack analytical skills within HR also appears to be a factor most boroughs do not include alternate scenarios in their workforce plans

information by gender, ethnicity and age appear robust; however the plans do not

appear to include sufficient ‘segmented workforce information’ - with figures by occupation, qualifications, skills and competencies scarce

a number of boroughs do however appear to have improving occupational group information, as reported in the R&R survey

demographic information on agency staff - a significant part of the workforce in a

number of boroughs - is very scarce some boroughs question the value of workforce planning; probably a fair

comment but this raises the question is the current position optimal? few boroughs report having succession planning strategies in place

mixed evidence on the quality of workforce planning from the CPA statements

boroughs are not entirely confident about the extent to which they are able to

forecast accurately the future shape of the workforce overall impression is that workforce planning is an underdeveloped activity in the

London boroughs; a review of the available evidence suggests it is not just local government that has difficulty with workforce planning

the specialist nature of work suggests there could be an argument for increasing

the level of formal collaborative working between boroughs TYPE OF WORKFORCE PLAN Of the twenty-four boroughs that responded to the survey, twenty-one reported having some form of workforce plan. Eighteen boroughs reported having a corporate workforce plan either with or without departmental plans; three reported having departmental plans only. The most common approach is a corporate workforce plan and stand alone departmental plans; this perhaps raises an interesting question of why the corporate and departmental plans are not linked in these boroughs? Table 1: Type of Workforce Plan(s) Type of Workforce Plan Number

Corporate workforce plan only 3

Corporate workforce plan developed from departmental plans 6

Corporate workforce plan and standalone departmental plans 9

Departmental workforce plans only 3

No meaningful workforce plan(s) exist 3

WHO IS INVOLVED IN WORKFORCE PLANNING The survey indicates the process is led by corporate HR with eighteen (78%) of the twenty-three boroughs4 answering this question indicating that corporate HR has ‘a great deal’ of involvement.

4 This is two higher than the number of boroughs indicating they undertake meaningful workforce planning; these two

boroughs presumably have plans but they are not meaningful.

The other answers provided show: departmental HR is less involved - 3 (18%)‘a great deal’ & 8 (47%) ‘some’ directors have major involvement - 5 (22%) ‘a great deal’ & 15 (65%) ‘some’ similar picture for heads of service - 6 (27%) ‘a great deal’ &12 (55%) ‘some’ trade unions have little involvement - 6 (29%) ‘little’ & 10 (48%) ‘not at all’

Given that eighteen out of the twenty-one boroughs indicating they undertake workforce planning reporting they have some form of departmental plan(s), it is perhaps surprising that departmental HR does not have a greater involvement in the workforce planning process. Directors and heads of service have a reasonably high level of involvement; this is encouraging and highlights that workforce planning is not just a desk activity carried out by HR. For example, demand forecasting is not a HR activity but a wider managerial responsibility. It is also probably the most difficult aspect of workforce planning. Demand forecasting is about getting the right people to debate and challenge the direction of a particular service. It is also not an exact science; it is based on what is known from the past and what indicators exist as to the direction for the future. Table 2: Groups Involved in the Workforce Planning Process

Group A great deal Some Little Not at all Total

Corporate HR/Personnel 18 4 1 0 23

Departmental HR/ Personnel 3 8 2 4 17

Service Directors 5 15 3 0 23

Heads of Service 6 12 3 1 22

Team Leaders/Managers 0 12 8 2 22

Employees 0 3 9 9 21

Trade Unions 0 5 6 10 21

Service Users 0 1 7 13 21

Others 0 0 5 10 15

PROFILING THE WORKFORCE Workforce profiling is one of the key element of workforce planning. It can be used to make projections about future workforce requirements, identify gaps and quantify on an objective basis areas of workforce shortage. The survey asked whether the following ‘employee characteristics’ information was include in the workforce plan: age, ethnicity, gender, disability, full/part-time, salary/earnings, length of

service, competencies and skills/qualifications; by

the following categories - all employees, department/service, occupation and agency staff

Table 3 and Appendix 3.1 summarise the position. Information on age, ethnicity, gender, disability, full/part-time, salary/earnings and length of service are included by most boroughs, either in their corporate or departmental workforce plans. However few boroughs break this information down by occupational group, with only three boroughs including any information on the occupational make-up of their workforce. Information on competencies or qualifications/skills is also rarely included. The evidence from the recruitment & retention survey does however suggest that an increasing number of boroughs are in a position to provide fairly robust occupational information, at least for the eight occupations covered by this survey. In these boroughs it may simply be a question of exporting this information into their workforce plans. Little information is included on agency staff; this is a potential concern as it is estimated that approximately 16%5, or 20,000, of the general services non-school based workforce are agency staff. Table 3: Employee Profiles - Boroughs Including Information Category/ Employee Characteristic

All Employees

Department/ Service Occupation Agency

Staff

Age 17 13 3 1 Ethnicity 17 14 2 2 Gender 17 14 2 2 Disability 17 14 2 1 Full/Part Time 13 13 2 0 Salary/Earnings 15 13 3 1 Length of Service 13 12 3 1 Competencies 1 2 0 0 Skills/Qualifications 2 3 0 0

Table 4 shows that sixteen boroughs indicated they report overall employee turnover by the ‘whole organisation’ and/or department/service; fewer report resignations. Even fewer include turnover/resignations by employee characteristics, for example, age and length of service. Eight boroughs report vacancies for the ‘whole organisation’ and nine by department/service. The reporting of internal moves/ promotions is not a significant feature of most London boroughs workforce plans. Again little is included by occupational group with two boroughs reporting employee turnover/resignations and three vacancies on this basis. No boroughs include internal moves/promotions by occupation.

5 London Councils employee turnover survey 2006/07.

Table 4: Turnover & Vacancies - Boroughs Including Information

Category Whole Organisation

Department / Service Occupation Employee

Characteristics

Turnover 16 16 2 8 Resignations 9 13 2 5 Internal moves/promotions 4 1 0 3 Vacancies 8 9 3

Information on the number of starters and leavers is included by most boroughs; fewer report their personal characteristics; the ‘source of starters’ and ‘destination of leavers’ is included by one and two boroughs respectively. Refer to Table 5. Table 5: Starters & Leavers - Boroughs Including Information

Category Total Number Source / Destination

Personal Characteristics

People starting employment with the borough 18 1 6

People leaving the borough's employment 19 2 6

WHAT IS INCLUDED IN THE WORKFORCE PLAN? At its broadest level workforce planning is about identifying the demand and supply for a particular occupation (or skill) over the medium/long term, and prioritising actions to bridge any gaps highlighted. Breaking workforce planning down by its (text book) elements, Table 6 (and Appendix 3.2) shows ‘demand projections’ and ‘supply forecasts’ are carried out sixteen and ten boroughs respectively. Table 6: Elements of Workforce Planning - Boroughs Including Information

Element of Workforce Planning Number

Priority actions identified to bridge any gaps highlighted 17

Workforce demand projections 16

Workforce gap analysis 15

Workforce supply forecasts 10

Critical/key post analysis 9

Succession planning strategies 6

Alternate future scenarios 3 These forecasts are however likely to be at an aggregate level as - refer to Table 3 - borough plans include little on the occupational make-up of the workforce. Interestingly, more boroughs indicate they identify gaps (15) and priority actions to bridge gaps highlighted (17) than undertake the two input actions required - demand projections (16) and supply forecasts (10) - for gap analysis. Critical/key post analysis is undertaken by nine boroughs and six boroughs indicated they have succession planning strategies. Only three boroughs include alternate scenarios.

THE WORKFORCE PLANNING PROCESS It is one thing to have a workforce planning process, but another matter to sustain a robust process that is integrated with service/financial planning and other people management processes. The survey asked boroughs to indicate whether they agreed or disagreed with a number of statements on the workforce planning process in their borough. The position is summarised in Table 7. Table 7: The Workforce Planning Process

Statement Strongly Agree Agree

Neither Agree/

Disagree Disagree Strongly

Disagree Balance

Takes account of the move towards collaborative & partnership working 3 12 6 0 1 14

Focuses on the principal issues & key occupations 3 13 3 2 1 13

Input from service directors & managers is a key part of the process

5 11 3 3 1 12

Key findings of the workforce plan help shape HR strategy & policy. 5 9 5 2 1 11

An ad hoc process comprising a series of isolated decisions & initiatives

1 3 4 10 5 -11

Identifies the changes required for a more flexible & productive workforce 2 13 2 4 1 10

Leads to key recommendations & actions which contribute to improved organisational performance

2 11 4 4 1 8

Part of an iterative process where the plan is reviewed & monitored on a regular basis

2 10 4 5 1 6

Provides the required information to make critical workforce decisions 2 7 8 4 1 4

Is a marginal activity little used to support any workforce decisions taken

3 5 4 10 1 -3

Its effectiveness is evaluated & measured on a regular basis 2 6 7 6 1 1

Although led by HR the workforce plan is owned by the whole organisation

1 9 2 8 2 0

Thought to be a HR document with little relevance to the rest of the organisation

1 7 6 5 3 0

Is a key element in the strategic planning process 2 5 8 6 2 -1

Is a rigorous process aligned & integrated with the service & financial planning cycle

0 6 4 10 3 -7

Note: The ‘Balance’ equals - the sum of the two ‘agree statements’ minus the sum of the two ‘disagree statements’; the neutral statement is not taken in to account. For a number of statements the responses were reasonably positive with a balance of (+14) indicating their workforce plan …“takes account of the move towards collaborative and partnership working”; a balance of (+11) indicating ...“key findings

of the workforce plan help shape HR strategy and policy.”; and a balance of (+10) indicating their plan …”identifies the changes required for a more flexible and productive workforce”. A balance of (+12) indicated that … “input from service directors and managers is a key part of the process” …this broadly supports the answer reported previously on the groups involved in workforce planning. There were also however a number of less positive responses. A balance of (-7) agreed with the statement …”it is a rigorous process aligned and integrated with the service and financial planning cycle”. Additionally eight out of the nineteen boroughs that expressed a ‘definite’ view agreed (or strongly agreed) with the statement that workforce planning … “is a marginal activity little used to support any workforce decisions taken.” BARRIERS TO WORKFORCE PLANNING Boroughs were asked to indicate whether they ‘agreed’ or ‘disagreed’ with a number of statements about the barriers to workforce planning. The major barriers reported are weighted towards capacity, skills and organisational matters, rather than the technical aspects of implementing workforce planning. Table 8 (and Appendix 3.3) shows the major barriers to workforce planning are: underdeveloped workforce planning capacity and skills among line/service

managers (+ 17) 6 and HR (+13) lack of time and adequate resources (+12)

organisational inertia; perception that it is an additional burden rather than a

value added activity (+5) and difficulty in securing the necessary interest and support from senior managers (+3)

the short-term nature of the budget planning process (+4)

The availability of analytic and reporting tools is considered less of a barrier. Interestingly, although there is a neutral balance of boroughs that consider. “the diverse range of occupational groups employed in local government makes it difficult to produce a coherent corporate workforce plan”... it registered the highest ‘strongly agree’ score...six boroughs. The lack of relevant and meaningful workforce information is considered a barrier by a balance (-4) boroughs; this is an interesting response given the apparent lack of occupational and skills information. A coherent analysis of current and required skill is needed to support any workforce plan.

6 Same methodology used as for previous table.

Table 8: Barriers to Implementing Workforce Planning

Statement Strongly Agree Agree

Neither Agree/

Disagree Disagree Strongly

Disagree Balance

Underdeveloped workforce planning capacity & skills among line & service managers

3 15 5 0 1 17

Underdeveloped workforce planning capacity & skills in HR 5 12 3 2 2 13

Lack of time & adequate resources 4 13 2 4 1 12

Organisational inertia; perception that it is an additional burden rather than a value added activity

3 8 7 4 2 5

The short-term nature of the budget planning process makes longer-term workforce planning problematic

2 9 6 7 0 4

Difficulty in securing the necessary interest & support from senior managers

3 6 9 2 4 3

The diverse range of occupational groups employed in local government makes it difficult to produce a coherent corporate workforce plan

6 4 4 8 2 0

Lack of analytic tools for workforce planning 2 5 9 5 3 -1

Lack of relevant & meaningful workforce information 1 8 2 8 5 -4

Reporting tools used not sophisticated enough to produce the necessary workforce information

2 5 4 11 2 -6

NATIONAL LOCAL GOVERNMENT WORKFORCE STRATEGY There was good news (of sort) for the national bodies on their ‘national pay & workforce strategy’. On balance the majority of responding boroughs indicated that the strategy has influenced (+10) and helped (+4) in their approach to people management. The position is summarised in Table 9. A revised strategy - local government the place to be, the place to work delivering through people: the local government workforce strategy 2007 - has recently been published. Refer to the ‘Introduction’ for additional information.

Table 9: National Local Government Pay & Workforce Strategy

Influenced your

borough's: approach to people management

Helped your borough improve its approach to

people management A great deal 4 2 Some 13 12 Little 6 7 Not at all 1 3

EVIDENCE FROM OTHER SOURCES CPA STATEMENTS A review of the commentary on workforce planning from the London boroughs’ CPA statements7 generally supports the findings of the audit survey. The following observations were not untypical: workforce planning is at an early stage of development

gaps in strategic HR and workforce planning and development make it difficult

to support organisational change workforce planning and development with the Council’s main partners is at an

early stage and some key staffing challenges remain the Council has a strong medium term financial strategy, which links into the

service planning process, but this does not link into workforce planning which is under-developed

workforce planning is under-developed and a more robust approach to is

needed. This should include an analysis of current skills, future needs and plans to address gaps, as well as plans to ensure that the workforce is more representative of the local population

These however need to be balanced against a number of positive observations: highly effective strategies for recruitment and retention and integrated

workforce planning and development are contributing strongly to organisational capacity

recent investment in developing a robust ICT system is moving HR from

being a reactive service to managing information, for example around sickness absence and converting intelligence to inform future workforce planning issues

people plans accompany each business plan and identify how staff will be

managed and developed to fulfil business need. This feeds into the Council's workforce planning

there is a strong approach to workforce planning both within the Council and

with partners to support the delivery of its future plans. Consequently performance on recruitment and retention is good.

7 London boroughs’ CPA statements.

The overall impression from reviewing the CPA statements suggests that workforce planning is an underdeveloped activity in the boroughs; with joint partner planning with, for example, Primary Care Trusts at a particularly earlier stage of development. The statements also indicate that workforce planning is more advanced and effective in certain services, for example, Children’s Services, and highlight the lack of workforce planning undertaken corporately in some boroughs. Another common theme is that workforce planning is not always integrated into a borough’s planning framework; consequently it is not always fully linked to the corporate strategy and service/ financial planning process. Not having a clear view of what staffing requirements are being worked towards in the medium to longer-term could limit effective service and financial planning. Some statements also comment on how the lack of workforce data and capability to analyse it inhibits the ability to plan for longer-term skill requirements, both within the borough and with its partners. The exact criteria used by the auditors when making these observations is not known and there may be the possibility that there are some inconsistencies in the judgments being made. RECRUITMENT & RETENTION SURVEY The R&R survey8 collects vacancy, turnover and demographic data on the following eight occupational groups: social workers - community care; social workers - children & families; social workers - residential; building control officers; traffic and/or transportation engineers; environmental health officers; trading standards officers; and planners.

This year as the Audit Commission is conducting a National Study9 on R & R issues in local government the survey was delayed to align some of the information requested with the themes of the study. As one element covers ‘planning for future challenges’ a simplified workforce forecasting question was included. Forecasting is obviously not an exact science; it is based on what is known from the past and what indicators exist as to the directions for the future. Workforce forecasting is a difficult task, but it was thought worth attempting to collect some information. Boroughs were therefore asked to indicate, by individual occupational group, whether they thought the demand and supply would: increase; decrease; stay about the same; or unable to answer

over the next two years and five years

The replies received to date indicate that: the demand for the occupations covered by the survey is predicted either to increase/remain broadly stable; while the supply is predicted either to decrease/remain broadly stable. These replies10 suggest that the current shortages may persist unless action is taken. Refer to Table10 and Appendices 4.1 & 4.2 for further information.

8 London Councils recruitment & retention survey 2007/08, currently ongoing.

9 Refer to Appendix 6.1 for Audit Commission’s research brief 10 Based on eighteen boroughs.

The survey also highlights that boroughs are not entirely confident about the extent to which they are able to forecast accurately the future shape of the workforce. For the two year forecast 36% of boroughs did not provide an answer for the demand forecast; for the supply forecast the figure is higher at 52%. For the five year forecast the figures are 54% and 65% respectively. Table 10: Demand & Supply Forecasts – All Occupations

Two Year Forecast Five Year Forecast Number Percentage Number Percentage

Demand Supply Demand Supply Demand Supply Demand Supply

Increase 73 15 24% 5% 61 16 20% 5%

Decrease 9 54 3% 18% 2 45 1% 15%

About the same 113 78 37% 25% 78 46 25% 15%

Unable to answer 33 70 11% 23% 87 107 28% 35%

Not answered/ NA 78 89 25% 29% 78 92 25% 30%

Total 306 306 100% 100% 306 306 100% 100% Table 11 (and Appendices 4.3 and 4.4) shows the same information for one of the occupations - planners. The figures are broadly similar with, for example, 61% of borough unable to provide an answer for the ‘five year supply forecast’. Table 11: Demand & Supply Forecasts – Planners

Two Year Forecast Five Year Forecast Number Percentage Number Percentage

Demand Supply Demand Supply Demand Supply Demand Supply

Increase 12 2 33% 6% 11 2 31% 6%

Decrease 2 5 6% 14% 0 5 0% 14%

About the same 10 9 28% 25% 7 7 19% 19%

Unable to answer 4 10 11% 28% 10 12 28% 33%

Not answered/ NA 8 10 22% 28% 8 10 22% 28%

Total 36 36 100% 100% 36 36 100% 100%

EMPLOYEE TURNOVER SURVEY The employee turnover survey11 collects data by the following six categories: resignations, retirements, dismissals, redundancies, TUPE transfers and ‘Other’; school-based employees are excluded from the survey.

11 London Councils, employee turnover survey, 2006/07

Based on the thirty-one boroughs that replied to the survey the mean (all categories) employee turnover rate in 2006/07 is 12.9%; the median is 13.1%. The mean resignation rate is 7.3% and the median is 7.8%. Turning these ‘index measures’ in to actual figures shows that in 2006/07: approximately 16,000 people left the employment of the borough they were

working for or approximately 310 people per week

or 490 per borough in a year

at an estimated cost - depending on the method used - of approximately

£22M to £89M, or £650,000 to £2.7M per borough resignations account for 56% of leavers, or around 9,000 people

Although it is currently not possible to calculate a figure, it is likely that a significant amount of this ‘churn’ is from one borough to another as they compete for staff. Finding a mechanism for reducing this competitive demand for labour through, for example, increased collaboration is one potential way of decreasing R&R difficulties. The survey also collects information on the number of agency staff engaged by the boroughs. The mean ‘agency workers rate’ - expressed as ‘agency staff’ as a percentage of ‘direct employees’ - is approximately 16% (19% in 2005/06), the median figure is 16.5%. These averages however mask a very wide range - 3.6% to over 40%. Turning these ‘index measures’ in to actual figures shows that approximately 20,000 agency staff are engaged by the London boroughs in their non school-based workforce. Little information is currently available on the agency staff working for the boroughs; this is potentially of concern. For example, which occupations are they working in and what is the age, ethnicity and gender profile for this group? This lack of information could hinder any attempt to undertake workforce planning in a meaningful way. It could also impede boroughs’ effectiveness in monitoring whether they are recruiting a workforce that reflects the diversity of the communities they service. Additionally, having such large numbers ‘engaged’ on an agency basis could hinder effective succession planning. CONCLUSION AND CHALLENGES CONCLUSION Replies to the survey indicate a mixed picture; with workforce planning at an ‘early stage’ in some boroughs and ‘more mature’ in others. Whilst it appears that a number of boroughs have made some good progress, few boroughs have yet to realise the full potential benefit of workforce planning, and few workforce plans appear to be comprehensive in their nature.

The replies show that the boroughs have an understanding that the workforce planning process: should takes account of the move towards collaborative/partnership working should focus on the principal issues and key occupations - given the lack of

information by occupation this may be a point worth exploring further input from service directors and managers is a key part of the process.

Boroughs also have an understanding of how: key findings from the workforce plan can help shape HR strategy & policy it can be used to help identify the changes required for a more flexible &

productive workforce it can lead to key recommendations and actions which contribute to improved

organisational performance The term workforce planning however appears to mean different things to different boroughs and how much (text book) workforce planning activity is actually undertaken by the London boroughs is probably open to debate. The value of the workforce planning currently undertaken appears limited by: a lack of organisational capacity and capability to undertake workforce planning limited use of alternate scenarios workforce information by occupation, qualifications, skills and competencies is

scarce; as is information on agency staff limited use of succession planning lack of integration with the other planning processes

So how much does this matter in practice?; the questions for discussion possibly are: do we simply lack ambition in this area?

is it all just too difficult; a nice concept with limited practical application?

some boroughs question the value of workforce planning; probably a fair

comment but raises the question is the current position optimal and how prepared are the boroughs for the potential loss of skills and knowledge?

given the operational environment and the range of services provided by the

boroughs; how suited are the London boroughs as organisations to undertake workforce planning and what form should it take?

In the final analysis the solution will not just be either a ‘Yes’ or ‘No’ answer. It is perhaps a question of discussing: how much is too little; what is simply not practicable or feasible; and how much is enough for an optimum solution? CHALLENGES The research highlights that the boroughs face a number of key challenges in putting in place a robust workforce planning process. It appears that in some boroughs additional work may still be required to persuade senior managers why workforce planning should be on their agenda. The answer to the question ‘where to start workforce planning’ is raising awareness. In essence, it is

about showing senior managers ‘Why’ they need to workforce plan before they are shown ‘How’. The importance of aligning workforce planning with the financial and service planning processes also needs to be highlighted to senior managers. The boroughs, like most organisations, appear to struggle with demand and supply ‘forecasting’; this is possibly linked to a lack of available information on skills/ competencies. Forecasting allows the extrapolation of historical trend data into the future to give a view of how the future workforce might look. While there is a diminishing return on extrapolation (i.e. the further out you are forecasting, the less accurate it will be), longer-term forecasting can still be important as it can provide a direction of change. Forecasts should be updated every year so the confidence in them will improve. Also, the workforce planning audit survey highlights that scenario planning is not widely used by the boroughs. Effective scenario planning can provide a strong foundation for informed demand forecasting. The size and scope of the London local government workforce means that profiling it is a significant challenge. At the same time this is a vital part of the process as the profile supplies the fundamental information for workforce planning; providing a clear picture of the current workforce overlaid with key data identifying and predicting trends in relation to workforce developments. The boroughs appear to have robust information on the age, ethnicity and gender of the workforce. There is however an apparent lack of information by occupational group and skills/competencies. This is a potential concern and it could be argued that without this information it is difficult to undertake workforce planning in any meaningful way The small number of boroughs that include detailed segmented workforce information in their plans suggests that a relatively low priority has been given to workforce profiling to date. Segmentation of the workforce is a vital component of workforce planning. For example, although most boroughs have a fairly robust understanding of their age profile, the information as presented, suggests that boroughs do not know exactly where in the workforce retirements are likely to occur over the next five years. The significant use of agency staff by some boroughs could hinder comprehensive workforce profiling and consequently have an impact on their ability to undertake effective workforce planning. Little appears to be known about this part of the workforce thus potentially making predictions on its future size and shape more complex. This however has to be balanced against the recognised benefits that agency staff, and employees on short-term contracts, can bring to an organisation. THE WAY FORWARD? These are put forward simply for discussion; they are not recommendations. BOROUGHS INDIVIDUALLY To successfully plan for the future, it is important to first understand where you currently are; what you need the workforce to do; what is most important; and what the workforce can and will do.

Improvements are required in the boroughs’ capability to produce detailed and segmented information on the workforce, for example, by occupation and skills. Additionally, if agency staff continue to make up a significant proportion of the workforce improved information is needed on this group.

For boroughs with an embryonic workforce planning process, there needs to be an appreciation that workforce planning is an iterative and incremental process. There is little to gain from attempting to implement a perfect, off-the-shelf, one-size-fits-all approach within the borough. It would however be a short-term solution if the workforce strategies put in place now were to take account of current issues only. The strategies should include measures which allow the borough to respond to unexpected challenges such as demographic changes, or sectoral changes which cannot be currently predicted.

Workforce planning must be viewed as a journey, and it is important to take pragmatic achievable steps that lead to progress, rather than attempting to implement the perfect system from day one. The first step might be building a forecast of the borough’s ‘no change’ future state By forecasting, using a ‘no change’ model you are building a representation of what the future could look like if current trends and practices continue. If, for example, a borough currently has 120 social workers and a turnover rate of ten percent for this group of employees: this means for the ‘no change’ scenario - forty-nine people will need to be

recruited over the next five years if the demand for this group increases by, for example, 15% over the next five

years - sixty-seven people will need to be recruited In Appendix 512 a graphical representation of the workforce that current trends predict is shown; this can present a compelling story. Possible questions to be answered: where are these people coming from; is there a guaranteed supply; will placing an advert in the paper or on the internet continue to produce the required number and quality of recruits? Another name for workforce planning is ‘strategic staffing’ and a simple graph may highlight to senior management the potential difficulties which may occur in the medium to longer-term. These graphs are generated from a simple spreadsheet developed by London Councils which is available on our web resource, and can be accessed via: http://www.londoncouncils.gov.uk/extranet/doc.asp?doc=20866&username=borough&password=resource Research by Infohrm13 suggests experience is that the generic approach needs to be adapted to each organisation, and often to individual parts within the organisation, due to factors such as: strategic maturity of senior and line managers existence and quality of strategic business planning and analysis

12 Two graphs are shown; no change and a 15% increase in demand.

13 Infohrm Workforce Planning Survey, September 2007.

the nature of anticipated workforce shortages other priorities within the organisation/business unit availability of supply data.

If it can be demonstrated that organisations which conduct quality workforce planning are more likely to be prepared for the costly loss of skills, corporate knowledge and leadership in the future; it is more likely that service directors, managers and the organisation generally will be interested in workforce planning. Some boroughs may need to invest additional resources in this area, including investment in workforce planning training and techniques, if they are interested in following through some of the ideas highlighted in this report.

BOROUGHS COLLECTIVELY; INCLUDING LONDON COUNCILS Undertaking workforce planning is not an easy and the skills required are highly specialised. Anecdotal and other evidence indicates that not all HR practitioners are interested in, or want to do, this type of work. Does this suggest there an argument for increasing the level of formal collaborative working between boroughs? This could range from sharing ideas to ensure cross-fertilisation of good practice through, for example, the workforce intelligence group14 to a shared service ‘centre of excellence’ covering a number of boroughs to oversee the development of workforce plans. Ideas might include such measures as: working together for shared solutions - for example, improved information contracting specialist providers as a group to reduce cost and improve quality establishing a regional workforce database in the medium/longer-term

BOROUGH WITH OTHER PARTNERS ORGANISATIONS The surveys and the other information sources used for this report only touched briefly on this area. There is clearly a move towards partnership working and the boroughs are obviously taking the appropriate opportunities for collaborative and partnership working. It therefore follows that the London boroughs should work at a strategic level with partner organisations and explore opportunities for collaboration on issues covering the joint workforces. Working with local partners on workforce planning by sharing, for example, information and resources to tackle joint problems on a collaborative basis would appear to be a logical progression. Undertaking workforce planning within one organisation is a difficult task; across two or more organisations as a collaborative exercise is a qualitatively bigger task again with no easy solutions.

14 This process has already started but could be further developed.

Appendix 1: Infohrm Workforce Planning Model

Appendix 2: Workforce Planning - Some Basic Concepts Scenario Development As no one has an accurate crystal ball, the concept of alternative scenarios is used when forecasting the future demand for labour. The existence of alternative scenarios helps managers to deal with a highly uncertain environment. They encourage managers to plan, not just for the most likely future, but also for the less likely future. Consider what factors - internal and external - will impact on the way your

borough provides its services over the next five years. Understanding the strategic direction of the borough and how its operating

environment is changing are essential workforce planning activities. Scenarios tell the story of how the future might look, what will impact on the

borough and how the borough will position itself. Possible approaches include: review and analyse information and identify a number of potential scenarios

review environmental scanning information - desktop research and consultations

consult with key managers on possible scenarios

workshops with broad range of directors/managers to clarify scenarios and

determine probability of each occurring

review scenarios and refine

Determining the Numbers Forecasting is not an exact science; it is based on what we know from the past and what indicators exist as to the directions for the future. It is recommended to do five year forecasts; the degree of confidence at five years may be quite low but it creates a direction. The forecast should be updated every year so the confidence in it will improve

The internal labour supply, your employees, is where most organisations focus their attention. This however will often lead to an emphasis on quantity rather than quality. It is also important to have regard to developments in the external labour market.

Demand Forecasting: With at least two demand forecasting scenarios variations in demand will be highlighted. Strategy development will need to take these alternative forecasts into account. A likely outcome is that strategies are geared to the most likely scenario, but with recognition of the need for close monitoring of the situation, and possible change of strategy to deal with the alternative scenario.

Possible approaches include: To estimate future workforce requirements, somebody must make a decision

- mathematical analysis and data may be useful - but ultimately, the determination of “how many people are needed and what skills do they require” is a human decision.

Managers are the best informed people to make judgments regarding the

workforce requirements necessary to achieve service objectives. Demand forecasting - this is a managerial responsibility - not HR. Ideally, two

demand scenarios should be forecasted. Both quantitative (probability theory, regression analysis) and qualitative (focus groups, interviews) techniques can be used. Demand forecasting is about getting the right people in the right room to debate and challenge.

Supply Forecasting

Supply forecasting; this is done through workforce analysis and HR has more of a central role to play in this process. Develop a workforce profile to analyse trends in staff movement, for example, employee turnover and retirements. It is also important to have regard to the external labour market.

Gap Analysis Develop the strategies necessary to tackle any demand/supply workforce gaps identified. Using Ulrich’s Six ‘B’s these could be: buy; build; borrow; bounce, bind; and boost15. For example: BUILD - ‘Grow Your Own’ Options. Formal and Informal training and development opportunities inter and intra organisational transfers/swaps cross-functional opportunities on the job learning stretch, shadow and project based assignments boomerang jobs

Individual Tailoring

mentoring and coaching individual development planning

Organisationally Aligned succession and talent management

‘Built in’ learning designing ‘good’ jobs with role depth, autonomy and scope for opportunity

15 Ulrich, 2005, The HR Value Proposition, Australian Institute of Management Presentation, Sydney

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Appendix 3.1: Employee Profiles Included in Boroughs Workforce Plans

All EmployeesDepartment/ServiceOccupationAgency Staff

0 2 4 6 8 10 12 14 16 18

Number of Boroughs

Alternate future scenarios

Succession planning strategies

Critical/key post analysis

Workforce supply forecasts

Workforce gap analysis

Workforce demand projections

Priority actions identified to bridge anygaps highlighted

Appendix 3.2: Elements of Workforce Planning Included in Workforce Plans

-10 -5 0 5 10 15 20

Reporting tools used not sophisticated enough to produce the necessary workforce information

Lack of relevant and meaningful workforce information

Lack of analytic tools for workforce planning

The diverse range of occupational groups employed in local government makes it difficult toproduce a coherent corporate workforce plan

Difficulty in securing the necessary interest and support from senior managers

The short-term nature of the budget planning process makes longer-term workforce planningproblematic

Organisational inertia; perception that it is an additional burden rather than a value added activity

Lack of time and adequate resources

Underdeveloped workforce planning capacity and skills in HR

Underdeveloped workforce planning capacity and skills among line and service managers

Appendix 3.3: Barriers to Workforce Planning

Greater Barrier

Appendix 4.1: Demand & Supply Forecasts - All Occupations - Two Years

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Appendix 4.2: Demand & Supply Forecasts - All Occupations - Five Years

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Appendix 4.3: Demand & Supply Forecasts - Planners - Two Years

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Appendix 4.4: Demand & Supply Forecasts - Planners - Five Years

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Appendix 5: Applying Workforce Planning - Simplified Example Description Level

Job Role (1) Social Worker II

Demand - No Change Current One

Year Two

Years Three Years

Four Years

Five Years

Job Role (1) Demand 120 120 120 120 120 120 Job Role (1) Supply 120 108 97 87 79 71 Job Role (1) Gap 0 -12 -23 -33 -41 -49

Demand - Scenario(1) Current One

Year Two

Years Three Years

Four Years

Five Years

Job Role (1) Demand 120 124 127 131 134 138 Job Role (1) Supply 120 108 97 87 79 71 Job Role (1) Gap 0 -16 -30 -43 -56 -67 Demand - Baseline/No Change Demand - No Change Gap -49

Demand - Scenario- 15% Increase Demand -Scenario - Plus 15% Gap -67

Scenario Development: Understanding the strategic direction of the organisation and how its operating environment is changing are essential workforce planning activities. Scenarios tell the story of how the future might look, what will impact on the borough and how the borough will position itself. Possible approaches include: review environmental scan information - desktop research and consultations review and analyse information and identify a number of potential scenarios consult with key managers on possible scenarios workshop with broad range of senior managers/managers to clarify scenarios and determine probability of each occurring review scenarios and refine - based on workshop outcomes

Because no one has an accurate crystal ball, the concept of alternative scenarios is used when estimating future demand for labour. The existence of alternative scenarios helps managers to deal with a highly uncertain environment. They encourage managers to plan, not just for the most likely future but also for the less likely future. With at least two demand forecasting scenarios, variations in demand will be highlighted. Strategy development will need to take these alternative forecasts into account. A likely outcome is that strategies are geared to the most likely scenario, but with recognition of the need for close monitoring of the situation, and possible change of strategy to deal with the alternative scenario.

Appendix 6.1: Audit Commission - Public Service Workforce: Recruiting and Retaining Staff for the Future

Background

It is widely recognised that human resources are a council’s greatest asset yet often a council’s workforce and its management are viewed as a largely operational area of limited relevance in achieving business objectives. As a result, there is often little strategic oversight and management of the planning, recruiting, developing, retaining and budgeting of councils’ workforces.

But there are risks in not effectively addressing these issues:

• the inability to deliver quality services where there are skills shortages; this is exacerbated by changing demographics and the smaller number of young people coming into the workplace;

• rising costs and an over-reliance on agency staff in areas where there is competition for scarce resources; • poor quality performance and morale issues where staff are not effectively managed, leading ultimately to recruitment and retention

difficulties; and • a workforce that is not diverse, which will have an impact on the quality of services delivered, the quality of applicants for jobs and the

attractiveness of councils as a place to work

Some of these issues were addressed in the Audit Commission’s 2002 report on recruitment and retention of the public service workforce16. Since then a number of additional drivers have emerged which make a new study on recruitment and retention timely17

Study aims

This new study will focus on how local government and its partners can ensure it has a workforce that is fit for the future through effective recruitment and retention practice. It aims to improve the performance of councils and their partners by:

• identifying the recruitment and retention challenges to delivering local public services and stimulating national debate around the barriers that exist at a local and national level;

16 Recruitment and retention: A public service workforce for the twenty-first century, Audit Commission, 2002.

17 For example, changing demographics and the impact of an ageing population; the changing nature of councils as their role is shifting from that of provider to commissioner and enabler; the

advent of comprehensive area assessments (CAA), which is placing a stronger emphasis on collaborative working with partners in a local or sub-regional area; the leadership role that councils are

taking in the place-shaping agenda, which has important implications for the skilling and employment of the wider local workforce; and the growing budgetary pressures imposed through reductions

in public spending.

• establishing the links between councils’ recruitment and retention planning and their ability to ability to achieve their strategic objectives;

• evaluating councils’ actions to deal with their recruitment and retention challenges – identifying the costs and benefits of these actions and assessing their impact on diversity and equality;

• raising the profile of workforce planning as part of the leadership and senior management role of councils and their partners • developing practical tools to support leaders, HR advisors, and senior managers in sustaining the future supply of skilled and motivated

staff and managing workforce-related risk. Methodology and outputs

The study methodology is shown below:

The study is due to be published in February 2008 and it is anticipated that it will result in the following outputs:

• A national study

• Practical tool(s)

Literature review, data analysis & discussions with s/holders

Fieldwork – mini case studies:

• 15-20 Council sites

• 5-10 Other sites

20 Structured telephone interviews with HR Directors

Chief Execs and members focus groups

Analysis and stakeholder workshop

Outputs

Appendix 6.2: Audit Commission Key Line of Enquiry – Workforce Matters18 KLOE 3.3 The organisation is forward looking at it plans organises and develops its workforce and information technology to support the achievement of its strategic priorities. Level 2 – performing adequately Level 3 – performing well Workforce strategies reflect strategic priorities and objectives and support the delivery of services. They address current and future workforce needs in terms of people and skills and are informed by information on workforce size and systematic collection of the views of staff. HR policies have been established to support good people management including diversity practices and to ensure compliance with equalities and disability legislation. Levels of staff accidents, stress and absence are monitored and minimised. Shared action on joint workforce issues is aiding joint working between partners. Staff costs for high spending areas are benchmarked against other organisations to identify potential areas for efficiency savings. The IT strategy is aligned with organisational strategic objectives and priorities. IT is used as an enabler of business change and to achieve efficiencies, improve value for money and access to services for users. IT systems are managed to provide reliable information with controlled and secure access, to support decision making.

Plans for the organisation’s workforce are well developed and integrated with service planning in most areas, resulting in few recruitment and capacity problems and minimising the use of agency staff. Training programmes are responsive to identified gaps in skills and resourced to meet these and to develop staff. A strong improvement culture is evidenced by managers and staff identifying and implementing efficiencies and innovations. Major organisational change is supported by the leadership. It is well managed, achieves good workforce involvement and is effectively supported by IT services. Staff costs and productivity are benchmarked against other organisations to identify potential areas for savings. IT forms an integral part of strategic planning. The organisation uses IT to drive and enable business process re-design to improve both its own efficiency and increase the flexibility of service delivery models, including working with partners.

18 Audit Commission, Use of resources 2009, Comprehensive Area Assessment consultation.

Main Information Sources The following three surveys: workforce planning audit survey recruitment & retention survey employee turnover survey

In addition to these surveys a number of papers from two workforce planning websites - both Australian - were used. Both websites are a very good source of information. Link: http://www.infohrm.com/

Link: http://www.aruspex.com/

Additional documents used: A research study to support the development of a local government workforce strategy, commissioned by COSLA.

Workforce planning: a literature review, IES, October 2004.

The following boroughs responded to the surveys:

Note: Twenty boroughs have now replied to the R&R survey.

Boroughs Employee Turnover Survey

Recruitment & Retention

Survey

Workforce Planning

Audit Survey Bark & Dag • • •Barnet

Bexley • • •Brent • • •Bromley • •

Camden • • •City of London • •

Croydon • •Ealing

Enfield •

Greenwich • •Hackney • •Ham & Ful • • •Haringey • •Harrow • • •Havering • •Hillingdon •

Hounslow • •Islington • • •Ken & Chelsea • • •King upon Thames • • •Lambeth • Lewisham • • •Merton • • •Newham • • •Redbridge •

Richmond • • •Southwark • • •Sutton • • •Tower Hamlets • • •Waltham Forest • • •Wandsworth •

Westminster • • •