As with demand, workforce supply is analysed in terms of both its internal and external components. Internal supply refers to the workforce you actually have in your organisation (in terms of both capacity and capability), whereas external supply refers to both the potential sources and availability of staff to join your organisation. Both components should be analysed using a current and future focus.
Appendix A provides detailed advice on how to collect internal supply data for your organisation.
This section helps you analyse current internal supply. You may select some or all of the components listed here, depending on the level of progress of workforce planning in your organisation. Your analysis will ensure you understand the demographics and skills and capabilities of your current workforce, and the implications from a workforce planning perspective.
analysing trends within the current workforce demographics.
A workforce database contains detailed information on all of your employees, to give you a complete understanding of your current workforce supply (refer to Template 8). Your database includes basic demographic information and, as your workforce planning data matures, skills and capabilities, and education and training.
For some organisations, consolidating this data into a spreadsheet or database will allow for more specific manipulation of the data. For organisations more progressed with their workforce planning or with robust data, this manipulation will most likely be possible within the HR information system through the production of specialised reports.
A skills and capabilities audit can be time consuming, particularly in larger organisations. However, if you’re maturing workforce planning in your organisation, you will want to understand the current skills and capabilities of your workforce in addition to basic demographics and employment information.
It’s important that the skills and capabilities audit be separate from an individual’s performance management appraisal. Otherwise, you run the risk of taking stock of the skills employees believe they should have, rather than the skills they actually have.
You might also consider developing a skills bank, for staff to register not only the skills and capabilities required of their current role, but those they can demonstrate from previous roles, which are known as latent skills and capabilities.
This information should be incorporated into your workforce database (Template 8).
by creating a workforce profile.
The former will give you an overview of the job families you have chosen by full-time equivalent (FTE), classification and location, similar to what you did in your demand analysis. Essentially, this involves attaching numbers to your workforce segmentation document. If you have been able to segment your workforce below job families, it may be possible to further break down the workforce numbers into job functions, job roles and/or specific skills and capabilities.
A workforce profile is a summary of relevant workforce demographics and provides a snapshot of your current workforce. Table 2 provides examples of demographics you may want to consider.
By generating visuals, such as graphs and tables, you will be able to identify workforce characteristics that are typical of your organisation and get a better understanding of your workforce.
Although analysing your current workforce demographics in isolation can reveal interesting workforce patterns, it’s worth comparing them with previous years (you may want to look at the last three years) to see how they have changed and discern internal trends. It’s also worth comparing them with APS (for example, State of the Service Reports and APS Employment Database Internet Interface) and Australian benchmarks to compare your performance against external trends.
Once you’ve developed your workforce profile and compared it to other relevant profiles, you need to ask yourself the following questions: So what? What does this mean? What are the risks?
Your data is only as good as your ability to analyse it—the ability to turn it into meaningful information. Your current workforce profile will only allow you to draw limited conclusions for workforce planning purposes, so don’t try to read into the numbers too much. Focus on broader trends, risks and patterns rather than drilling into the detail too deeply. The following list of key questions is not exhaustive, but will guide you through some important analysis considerations.
What is the composition of your current workforce in terms of gender, age, classification, location and tenure?
What is your ratio of directors to APS-level employees? What does this tell you about your workforce and organisation?
How reliant is your organisation on the contingent workforce (consultants, contractors, temporary, casual employees)? What skills and capabilities does your organisation obtain through the contingent workforce? How does the contingent workforce profile compare with your permanent workforce? What work is currently completed by the contingent workforce and why?
What is the age profile of your workforce? What implications does this have for your workforce, now and in the future?
What is the tenure pattern of your organisation? What does this mean from a workforce planning perspective?
Does your workforce reflect Equal Employment Opportunity policies?
How does your profile compare to the APS-wide profile? How and why are they different?
What patterns are evident from your workforce profile and do they vary across the organisation? Have they varied over time and, if so, how? What does this mean?
You should now have an understanding of the demographics and skills and capabilities of your current workforce, and the implications these have from a workforce planning perspective. You should concentrate on answering the key question in Table 2 in the ‘Workforce planning explained’ module about what you currently ‘own’ in terms of skills and capabilities, and developing a picture of the key features of your current workforce are, supported by the evidence you collect. This then enables a relative comparison with your current demand analysis.
This section helps you analyse your projected internal supply (that is, what your internal supply will be assuming no action is taken to align it with demand).
how planned promotions, training and up-skilling will change the profile of your remaining workforce.
You can determine the expected change in your workforce profile over your forecast period by looking at the implication of trend data and employee survey and interview information on your current workforce. Quantitative trend data will allow you to understand past trends in employee outflow (for example, resignations and retirements) as well as past trends in other workforce changes (for example, promotions and leave). This will allow you to estimate the changes that will occur in the near future and provide you with early indications of problems to come (for example, an increasing trend for unplanned leave could signal something is wrong in your organisation or an ageing workforce will signal increasing retirement rates). Table 3 lists some workforce trends for which you may want to collect data.
Trend information is based on data from the past and you must remember that trends change over time. Therefore, there is no guarantee that trend data will enable you to accurately predict the future. However, the longer back your trend data goes, the more confident you can be in your future expectations. Template 9 allows you to summarise your organisation’s workforce inflow and outflow trends from previous years.
Another data source complementing trend information is employee survey data. Asking employees what their intentions are can add a qualitative dimension that helps you to interpret the quantitative trend data.
Although referred to as an ‘employee survey’ in the guide, there are different ways to collect qualitative information on employees, including online poll surveys, probation surveys (following the probation period), or yearly performance management reviews (refer to Appendix A). Exit interviews are a good way of finding out why employees leave your organisation and often provide you with honest information. If your organisation does not have an employee survey, some of the questions you may consider including are listed in Table 4 and in templates 10 and 11.
Where did you work before this agency or department?
What are your career or retirement intentions over the next year, two years, five years?
Interviewing managers and HR practitioners can provide you with information on planned promotions and up-skilling, which will also impact your future workforce profile.
Looking at trend data allows you to understand the inflows and outflows shown in Figure 2 for your organisation and from that understanding you can populate Template 12. Based on this information, and your skills and capabilities profile, you can estimate what your workforce profile will look like at the end of the forecast period. If you have sufficient information to do so, attaching the numbers (FTE) required of your future skills and capabilities profile is a good idea. Otherwise, a description of the likely developments of your internal workforce is what will constitute your future internal supply document.
The following list of key questions is not exhaustive, but will guide you through some important analysis considerations.
What are current and projected retirements, turnover, secondments, etc.?
Are there any new policy proposals and what impact will these have on capacity and capability requirements?
Do you have any new policy proposals that are about to end? How will this impact on your workforce?
Do you have any employee contracts (non-ongoing, contractors) that are about to end?
Assuming employees will keep joining and leaving the agency or department at the same rate as in previous years, will your workforce decrease or increase in your specified forecast period?
By how much will your workforce decrease or increase in your specified forecast period?
Will this increase or decrease be prominent in a particular job family, function, role or skills and capabilities category?
Taking this information into consideration, what are the likely changes to the outflow of employees in your specified forecast period? How many of your employees are likely to leave in your specified forecast period?
Can you say anything about the rate of intake from your discussions with business managers or others?
You now have an understanding of your projected future internal supply, assuming no action is taken to align it with demand. You should concentrate on answering the key question in Table 2 in the ‘Workforce planning explained’ module about what your forecast workforce capacity and capability shortages will be, and develop a picture of what the key features of your future internal workforce will be, supported by the evidence you collect. This will enable a relative comparison with your future demand analysis.
This section helps you to understand the current external availability of skills and capabilities your organisation needs. Although this information will not directly form part of your gap analysis, it’s extremely important as it will alert you to skills and capabilities that are in short supply, which in turn will help you assess the criticality of your current workforce gaps and how you might close them.
To understand the current availability of skills and capabilities your organisation needs, you should consult those who recruit for your organisation. They will have good knowledge about how easy or hard it is to attract and hire good quality applicants, how many applications they get for different positions on average, and whether particular skills and capabilities are harder to obtain than others.
Ideally, external supply would be defined in terms of the skills and capabilities you use to differentiate internal supply and demand. However, this is not always possible. For example, the job categories used by the Australian Bureau of Statistics may differ from the segments used in your agency or department, in which case you need to map the former to the latter to get an idea of the supply in terms of your identified capabilities.
What is current availability of skills and capabilities?
Where do you currently source these skills and capabilities?
What is the ratio of good-quality applications to each position advertised?
Are there particular skills and capabilities that are harder to obtain than others?
What is the average time to recruit? Does this vary between job families?
How much bargaining power do potential employees have compared to employers?
The output of this section on analysing your current external workforce supply, when coupled with your current internal workforce supply analysis, will paint a complete picture of what your total workforce supply looks like. This then enables you to compare your current workforce supply with your current workforce demand analysis, to discern gaps in capacity and capability and identify workforce risks.
While internal consultations will give you a relatively good idea of the current availability of potential new recruits, you will be required to look more broadly at indicators of external supply to understand what the future availability of your required workforce might be. This is often referred to as an ‘environmental scan’.
The first step in an environmental scan often includes scanning relevant documents so you have a preliminary understanding of the external supply environment and emerging trends and issues. You then prioritise trends and issues to understand where your focus should be. Through consultations with industry, educational institutions and managers, and by reviewing relevant documents and publications, you should examine the most pertinent issues further and determine how these will impact on your organisation. An example of an emerging trend might be decreasing enrolments in information and communications technology undergraduate degrees, or a new mining operation in a particular locality that will lead to an increase in the resident population and the services required to support them in that locality.
Table 5 lists factors you should examine to identify how easy or difficult it might be to recruit the skills and capabilities you require in the future.
skill shortage lists (refer to http://www.immi.gov.au/skilled/sol and related regional lists).
The analysis of the types of trends listed above can be conducted at different levels of granularity and at different time points in your workforce planning. At a very basic level, you should examine broad trends such as the general unemployment level, as high general unemployment suggests it will be relatively easy to recruit new people. However, high general unemployment does not necessarily mean that the skills you need the most are in ample supply. A high unemployment rate may also influence your separation rate as staff may decide to stay with your organisation instead of looking elsewhere due to job security. The more detail you go into, the more useful the information will be.
The same holds true when it comes to geography and the location of your potential pool of new employees. The most readily available information is at a global or national level. However, if your organisation is located in a remote area, a national surplus of the specialist skills you require may not be of benefit.
You should collate the information obtained from your internal recruitment personnel and from your environmental scan in a brief document outlining the key trends that will affect your organisation’s ability to recruit in your specified future forecast period. You can use Template 13 to help with this.
What is the demand for, and availability of, your organisation’s key skills and capabilities?
What are the possible risks associated with the labour market in relation to your organisation’s workforce segmentation method (availability of qualified candidates, ability to recruit these candidates and organisational challenges in recruiting competitively)?
When you couple the output of this section (analysing your future external workforce supply) with your future internal workforce supply analysis you will have a complete picture of what your total future workforce supply will look like. This enables you to compare your total future workforce supply with your future workforce demand analysis. This enables you to discern gaps in your workforce capacity and capability, and identify workforce risks.
Workforce plan. The information contained in these documents will inform the ‘Internal supply analysis’ and ‘External supply analysis’ sections of your workforce plan. Refer to Appendix B of the ‘Workforce planning explained’ module.
Collecting data on internal supply should not be too difficult, as most agencies and departments, and their corporate sections, collect such data on a regular basis. However, this data is usually collected for purposes other than workforce planning, which means the way it’s collected and stored is not always ideal for workforce planning.
Tables 1 to 4 above provide suggestions on what types of data you should be collecting (to understand your current and future internal workforces respectively) and why. You should look over these tables to identify what information and data already exists in your agency or department. You may need to consult with HR personnel, senior managers and/or line managers to find out about existing data and how to access it. Use these boxes to ‘tick off’ what information you have. This should give you an idea of your agency or department’s maturity in terms of systematic data collection. Many agencies and departments will be heavy on workforce demographics and trend data, but less so on information about skills and capabilities, and employee career perspectives and intentions.
Once you know what you have, you need to identify what else you may need, how easy it will be to obtain, and whether, considering the cost of gathering the information, it’s worth it.
Will it give you the data you need?
Is the method useful for collecting data on an ongoing basis?
Table A1 outlines some common data collection methods.
High cost, especially for larger agencies or departments.
When collecting data for your workforce plan, think about institutionalising or formalising some of the data collection to facilitate workforce planning in the future and provide regular data for monitoring progress and changes. This includes putting thought into developing organisation-specific templates (based on the templates provided in this guide) and establishing a process for regularly using them to gather, present and store this information. It could also include investing in an information management system if you don’t have one or if the one you have is inadequate to manage your workforce data. Availability of data on your workforce is limited in many agencies and departments and therefore, understanding the information you need and standardising data collection will benefit your current and future workforce planning processes and other aspects of your business.
What information is currently being collected, who is collecting it and how is it stored?
What do you need to do, and who do you need to talk to in order to access it?
What other key information and/or data do you need that is not being collected?
What is the best way to obtain this data?
How could your future workforce planning be made easier?