o&g workforce planning benefits & fundamentalsg workforce planning – benefits &...

Presented by Sam Russell & Craig Bonanno

O&G Workforce Planning – Benefits & Fundamentals

Rhodes Business School (Australia) - www.rhodesbusinessschool.edu.au - 1300 746 287

Introduction

A relevant quote and a statistic to consider:

Quote - “High labour costs and low productivity are an unsustainable mix”. The Hon Martin Ferguson AM Chairman of the APPEA Advisory Board, February 28th 2014

Stat - A well developed workforce planning strategy typically produces a decrease

in payroll of around 7% to 9% p/a (or higher) with no negative

impact on capability or productivity!


Craig Bonanno – SWP Solutions

Recognised for advanced business analytics and ability to develop holistic resourcing strategies; Craig delivers optimal outcomes by

drawing on his near 20 years experience and by implementing robust strategic workforce planning solutions:

Responsible for developing the manpower strategy in Australia, thus ensuring the efficient delivery

of customer service levels, master production schedules, client’s expectations, and budgeted targets.

In just 18 months Craig’s strategies have contributed to direct labour reductions of 18.5%.

Substantial savings realised through EBA and Award scrutiny and proper application.

Excess Leave liabilities reduced dramatically by introducing a competent leave planning program.

Responsible for the development & implementation of workforce planning strategies, and for managing

the overall workforce planning process to drive efficiencies & increase port productivity:

Implemented long-term plans to achieve optimal staffing mix and deliver substantial manpower savings.

Managed the operation through the global financial crisis without the need for redundancies.

Developed sophisticated labour planning models to forecast manpower assumptions underpinning a significant budget.

Extensive workforce planning experience in industrial environments.

Masters Degree in Business Administration La Trobe University.

Expert analytical, spread-sheeting & financial modelling capabilities.

In-depth working knowledge & interpretation of Award & EBAs.

Driving change in complex operational environments.

Development of business systems & process re-design.


Organisation (A)

Organisation (B)

What can an effective Workforce Planning strategy provide?

With direct labour often accounting for upward of 40% of an organisation's operating costs; poorly managed and

disorganised workforce planning can have a significant negative impact on an organisation's bottom line.

By implementing effective and integrated workforce planning solutions, you can strengthen financial stability and

increase competitive advantage, whilst maintaining an engaged and productive workforce.

Align your workforce to meet operational demand

Engage the right labour mix appropriate to your environment

Reduce your reliance on more expensive forms of labour

Manage leave effectively and reduce your leave liability

Strengthen your ability to model labour costs for budget purposes

Build dynamic recruitment plans, thereby reducing cost to hire

Leverage EBAs and Awards to reduce labour costs

Measure your performance against desired outcomes

Foster a culture of accountability and continuous improvement


Workforce Planning Case Study

The Situation

Background: Having acquired an additional business which was operating at a significant loss in November 2012, the business

plan was to merge the existing entity with that of the new, realise synergies and return to profit. Months on, the business was still

making losses and redundancies of direct labour were being considered.

Rosters: The business has 16 sections all looking after their own rostering in their own unique way. Rosters were not

operationally or budget aligned and a large component was filled with third party labour and overtime. Staff in most sections

were receiving their rosters with only one weeks notice. Legacy arrangements were in place and areas of the EBA were

incorrectly applied.

Resourcing: Supervisors made resourcing decisions with no accountability or understanding of labour targets, and without any

escalation to section Managers. There was no pre-planning for annual leave or long-term absences. Fluctuations in activity were

not taken into account and short-term sick leave was being covered hour-for-hour.

Leave: A massive leave liability had accrued. In a misguided attempt to reduce overtime a leave freeze had previously been

put in place. Following this, staff were only allowed to take one weeks leave at a time. The leave approval process was not

transparent, with all leave having to be approved by the unit‘s GM. There was no forward planning of leave.

Sick Leave: Sick leave was running at 9% of total permanent worked hours. No guidelines existed for managing absenteeism

and Managers were inconsistent and non-proactive in their approach.

Performance Measurement: Was all-but non-existent. Managers were not able to pin-point reasons for poor performance

when the monthly Profit & Loss Statement was discussed.

Manpower Budget: There was no labour modelling done to underpin the budget, which resulted in some areas having flawed

assumptions. This further exacerbated the financial position.


Elements of an effective Workforce Planning strategy

‘Strengthen financial stability’

‘Increase competitive advantage’

‘Maintain an engaged & productive workforce’

Budget Labour Modelling

Demand Planning

Base Rostering

Right

Labour

Mix Leave Planning

Leveraging Systems

Resource Management

Measuring Performance

WP Elements


Workforce Planning – Redundancy Mitigation Strategies

Step 1

Retaining Valued Employees

Overtime Reduction Strategies

Third Party Labour Considerations

Part Time Employment Opportunities

Understanding Natural Attrition Rates

How to Implement an Excess Leave Burn Program

Cross-Utilisation and Re-skilling Opportunities

Other Considerations

Managing the Redundancy Process

Redundancy Mitigation Strategies


Workforce Planning – Understanding Operational Demand

Step 2

Forecasting Activity

Engagement Standards

Defining Shift Constraints

Generating Demand

Understanding Optimal Coverage

Zero Base or Green Fields Approach

What-if Scenario Modelling

Cost to Lose and Handle Client Analysis

Account for financial & commercial constraints

Demand Planning


Workforce Planning – Mapping Demand vs Supply


Workforce Planning – Demand, Roster, Budget, & Labour Mix


Workforce Planning – Components of Base Rostering

Step 3

Award and EBA Interpretation

Rostering Constraints

Industrial Considerations

Work Life Balance

Fatigue Management

Rostering Concepts and Techniques

Budget Alignment

Master Roster Staff Assignment Keys

Base Rostering


Workforce Planning – Rosters & Staff Assignment Keys


Workforce Planning – Labour Supply Planning

Step 4

Labour Mix Strategy

Resource Plans

Predictive Front-line Recruitment

Environmental Factors

Job Profiling

Employee Value Proposition

On-boarding

Future Considerations

Supply Planning


Workforce Planning – Recruitment Plans & Labour Mix


Workforce Planning – Leave Planning

Step 5

Understanding Entitlements

Excess Leave Liabilities

Developing Leave Plans

Calculating Leave Targets

The False Economy of Leave Freezes

Sick Leave Management Strategies

Leave Planning & Managing Sick Leave


Workforce Planning – Leave Charts


Workforce Planning – Systems & Tools

Step 6

Leveraging Systems & Systems Governance

Scoping the right T&A and Resourcing Systems

Master Roster Templates & Assignment Keys

Roster Costing Templates

Leave Plans, Resource & Recruitment Plans

Attrition & Recruitment Tracking

Training Plans & Forecasting

Labour Planning & Budgeting Models

Demand versus Supply Mapping

Labour Reporting Suites

Job Profiling Models

Process Mapping

Workforce Planning Systems & Tools


Workforce Planning – Resource Management

Step 7

Long-term Planning

Medium-term Planning

Short-term Planning

Day of Operations

Building Resource Management Capability

Line Manager Accountability

Establishing Resource Meetings

Competent Resource Management


Workforce Planning – Performance Management & Reporting

Step 8

Labour Reporting Performance Suite

Frequency of Reporting

Setting Targets & Measures

Introducing Metrics into the Business

Analysis and Financial Modelling

Departmental Human Resource Reporting

Dashboards and Balanced Scorecard Methodology

Performance Management & Reporting


Workforce Planning – Performance Reports


Workforce Planning – Summary of Outcomes

The Outcome

Rosters aligned to meet the budget & operational demand, with shift yields reduced.

Closer to achieving the right labour mix with a shift from overtime and third party of 11%.

Reduced reliance on expensive labour: OT down 40%, third party labour down 50%.

Leave is being managed effectively with the liability reducing: Leave taken up by 165%.

Labour modelling is ensuring accurate manpower assumptions at each reforecast.

Staff turnover has reduced by two thirds, thus lower cost of recruitment.

EBAs/Awards leveraged with substantial savings due improper/ineffective application.

Performance is measured and Managers are accountable to achieve desired outcomes.

From their worst points, Sick Leave down 10% and Workers Comp down 50%.

A shift in culture to that of accountability and continuous improvement.

Productivity has increased by over 50% whilst activity has remained constant.

Total worked hours reduction of 18.5% with the equivalent labour dollars reduction 24.5%.


Rhodes Business School - Strategic Workforce Planning Solutions


Rhodes Business School - Strategic Workforce Planning Solutions

Vision

“To provide integrated workforce planning solutions to

strengthen financial stability and increase competitive advantage, whilst maintaining an engaged workforce”

Guidelines

1) Understand true operational demand

2) Account for financial and commercial constraints

3) Ensure alignment of labour requirements to financial targets

4) Identify optimal mix of labour & supply labour accordingly

5) Introduce a competent leave planning program

6) Implement effective tools and leverage systems

7) Establish robust resource decision making capability

8) Invoke Manager accountability for meeting labour targets

9) Track, measure and report

10) Hold resource meetings to invoke continuous improvement

Strategic Workforce Planning Guidelines


Workforce Planning – Methodology

“Workforce Planning - Building in-house capability to maximise future returns”


Methodology

Thank you for attending

The following may be of interest:

Workforce Planning Groups and Forums via LinkedIn:

Workforce Analytics and Workforce Planning

Scenario Planning https://www.linkedin.com/grp/

Industry Awards and Entitlements:

Fair Work http://www.fairwork.gov.au

Award and Workplace Relations advice:

Australian Industry Group http://www.aigroup.com.au/

Alternatively, please feel free to contact us:

Rhodes Business School

[email protected] 1300 746 287


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