O&G Workforce Planning Benefits & Fundamentals

Transcription

1 O&G Workforce Planning Benefits & Fundamentals Presented by Sam Russell & Craig Bonanno

2 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 28 th 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!

3 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: 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) 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. Organisation (B) 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.

4 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

5 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.

6 Elements of an effective Workforce Planning strategy WP Elements Measuring Performance Budget Labour Modelling Demand Planning Resource Management Strengthen financial stability Increase competitive advantage Maintain an engaged & productive workforce Base Rostering Leveraging Systems Leave Planning Right Labour Mix

7 Workforce Planning Redundancy Mitigation Strategies Step 1 Redundancy Mitigation Strategies 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

8 Workforce Planning Understanding Operational Demand Step 2 Demand Planning 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

9 Workforce Planning Mapping Demand vs Supply

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

11 Workforce Planning Components of Base Rostering Step 3 Base Rostering Award and EBA Interpretation Rostering Constraints Industrial Considerations Work Life Balance Fatigue Management Rostering Concepts and Techniques Budget Alignment Master Roster Staff Assignment Keys

12 Workforce Planning Rosters & Staff Assignment Keys

13 Workforce Planning Labour Supply Planning Step 4 Supply Planning Labour Mix Strategy Resource Plans Predictive Front-line Recruitment Environmental Factors Job Profiling Employee Value Proposition On-boarding Future Considerations

14 Workforce Planning Recruitment Plans & Labour Mix

15 Workforce Planning Leave Planning Step 5 Leave Planning & Managing Sick Leave Understanding Entitlements Excess Leave Liabilities Developing Leave Plans Calculating Leave Targets The False Economy of Leave Freezes Sick Leave Management Strategies

16 Workforce Planning Leave Charts

17 Workforce Planning Systems & Tools Step 6 Workforce Planning Systems & Tools 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

18 Workforce Planning Resource Management Step 7 Competent Resource Management Long-term Planning Medium-term Planning Short-term Planning Day of Operations Building Resource Management Capability Line Manager Accountability Establishing Resource Meetings

19 Workforce Planning Performance Management & Reporting Step 8 Performance Management & Reporting 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

20 Workforce Planning Performance Reports

21 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%.

22 Rhodes Business School - Strategic Workforce Planning Solutions

23 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 Strategic Workforce Planning 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

24 Workforce Planning Methodology Methodology Workforce Planning - Building in-house capability to maximise future returns

25 Thank you for attending The following may be of interest: Workforce Planning Groups and Forums via LinkedIn: Workforce Analytics and Workforce Planning Scenario Planning Industry Awards and Entitlements: Fair Work Award and Workplace Relations advice: Australian Industry Group Alternatively, please feel free to contact us: Rhodes Business School