Industries will continue to evolve to meet customer demands and take advantage of new technologies. Mature industries like energy and manufacturing are in the midst of major change. Emerging sectors such as cyber-security are responding to a rapidly changing environment. A common theme to emerge is the need for industries to adapt their workforce’s capacity and capability (skills and qualifications) to meet these challenges. In essence, an industry workforce plan is required.
Workforce planning is often applied within an organisation to design and implement workforce development actions to enable the business strategy to be achieved. Workforce planning links human resource actions to the organisational strategy.
How is an industry workforce plan different?
As an industry level workforce plan is not confined to a single firm or organisation, it is more challenging than developing an organisational plan. Tensions and rivalries between the firms within an industry are needed to produce economic value and competition. However, this environment may not always be conducive to the realisation of a broader industry workforce plan, particularly in emerging industries where competitive advantage is highly valued and may lie with a few firms.
The complexity of planning is further compounded by the interests of other stakeholders including:
- federal and state governments who may be interested in supporting national industries
- education and training institutions who will have a role in building the future workforce
- professional, business and employee bodies who will be keen to represent their members
An industry-level workforce plan should be seen as a major and deliberate undertaking. It is not a trivial exercise. The quality of the plan can be improved by recognising these five insights.
Approach and Processes – Largely the Same
The recent publication of Australian and International Standards on Workforce Planning provides guidance about the workforce planning approach and processes to be adopted. The good news is the workforce planning approach is generally consistent regardless of whether the plan is being developed by industry, region or organisation.
The standards assume that the industry workforce plan will be developed by the relevant industry association. Other stakeholders, including government, could take the lead on developing the workforce plan. This is likely to depend on the level of maturity and life-stage of the industry. Government could be keen to develop workforce plans to create new or transform old industries.
Collaborative Stakeholder Engagement – Conflicting Views, More Challenging
Stakeholder engagement is a critical success factor in the development of a workforce plan. The quality of the plan is likely to be correlated with the level of stakeholder input and interest. Views are likely to be different and nuanced.
Allowing sufficient time for stakeholder consultation is important, and could be under-estimated in the initial planning. The engagement approach will depend on the number, diversity and location of the stakeholders identified. The use of open forums and surveys can be beneficial, and the questions will be informed by initial consultations. Firms may be more willing to participate in such activities, if they are sponsored by a peak body, and where an industry level report is produced which collates and internally benchmarks each firm within the industry. Survey data may be important depending on the level of publicly available workforce data.
Workforce Data – Incomplete Picture
The size of the industry’s workforce is greater than that of a single firm. Trends at an industry level will be more important than issues within specific firms. If possible, understanding workforce movements within the industry are important.
Using the ANZSCO framework is a good starting point, which allows the workforce to be segmented. Other publicly available data may be available from government web-sites, and may include labour statistics and employment trends, and past census data. This data will be useful in determining workforce supply and demand data in established industries. The challenge becomes greater when the requirement is to examine an emerging industry. Integrating stakeholder workforce data collected through surveys would be useful to supplement official statistics.
Current and Future Workforce Demand – More Problematic Than Supply
As with organisational workforce planning, developing a view about the future demand is critical. This is the greatest challenge in the workforce planning process, and at an industry level, it is no different.
Developing an aggregate view of workforce demand across the industry could be challenging. At the firm level, this information is likely to be commercial in confidence, and reflects how operations are conducted. Official statistics on vacancy levels by occupation and industry provide an estimate of additional workforce demand. As these measures do not include the hidden job market (up to three to four times more than the reported levels), demand estimates could be under-estimated.
Understanding the workforce demand within the industry and allied or competing industries is important to show the total demand picture. This information drives workforce development strategies, particularly around skill development and the investment required in education and training to support the industry.
Skills and the Future of Work – Responsive and Adaptive Education and Training Systems
The future workforce is likely to require a different skill set to the current workforce. This will be shaped two related aspects: first, by shifts in the nature of work from a decline in manual and routine tasks to more cognitive and non-routine work, and second by technology changes within the industry. Greater automation, robotics, artificial intelligence and intelligence amplification are examples of how today’s work processes could be transformed in the future. Firms will make investment decisions about future technology to gain competitive advantages.
As technology and work changes, the skills needed will evolve. Developing the future skill requirement should be part of the future workforce demand. Growing these skills will require an adaptive and responsive education and training system working in collaboration with industry to produce the required job-ready graduates with the right qualifications. Education and training is expected to be a continual process, which could evolve quickly depending on how rapidly the industry changes.
The level of complexity in stakeholder engagement and understanding the industry dynamics are the principal challenges in developing an industry-level workforce plan. Such plans address a larger and more complex workforce, using less complete data than at the firm level. Understanding the nuances and trends about demand and supply in terms of capacity and capability is essential if the future workforce is to be realised. The success of the industry level plan will depend on the engagement level of stakeholders in the development of the plan, and their ongoing commitment to the plan’s implementation.
This article first appeared on LinkedIn on the 16th of January, 2018
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