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The most critical business issue facing Ergon Energy today is effective works management and delivery. The current focus is on the Network Management Plan 2007/08 to 2011/12 which has the following key features:
Proper implementation of the Network Management Plan requires an increase in Ergon Energy’s workforce capability coupled with data and systems upgrades. Other key business issues include:
Significant skills shortages in specialised trades and professional occupations will challenge Ergon Energy’s ability to acquire the workforce to deliver the Network Management Plan and continue with ongoing maintenance. The threat of continued limited organisational capacity and capability is a significant one, given the age profile of the organisation. 38.9% of Ergon Energy’s workforce are aged 45 years and over; while 12.0% are aged 55 years and over. This high risk of organisational knowledge lost through retirement is compounded by the generally high tenure across the organisation in these mature age brackets.
Ergon Energy has recently completed its third workforce planning project. The first occurred in 2004/05, from which time the organisation has steadily increased its workforce planning capability. The initial project was completed with limited management engagement in the process, resulting in strategies developed from the project being only partially implemented.
The second iteration began with a revisit of earlier forecasts, in the light of changes made to the core business of the organisation. The workforce planning team experienced some difficulties in establishing a common understanding of business issues, but nevertheless the plans were completed and recruitment initiatives began to be adopted.
The third iteration came at a time when the workforce planning team was repositioned as part of the Careers Function, within Staffing and Talent Management. By this time, members of the Executive had become familiar with the process and were more committed and involved in its completion. As a result, limited outside consulting support was required and the project was largely completed internally.
The workforce planning framework utilised by Ergon Energy is based on Infohrm’s own workforce planning framework. A number of the activities have been included to ensure the process fully captures all human capital issues relevant to Ergon Energy, and helps to establish organisation wide acceptance for workforce planning.
The methodology incorporates the following elements:
Ergon Energy’s workforce planning capability has steadily increased over the past five years. Two areas in particular where the organisation has improved its process are the increased levels of management engagement and support, as well as the greater alignment of workforce planning with broader business planning processes.
The initial workforce planning project suffered due to lack of management support and involvement within the process. A key driver of he success of Ergon Energy’s more recent workforce planning projects has been the continued growth in management engagement, support and approval that has occurred since the process was first introduced. Interaction with business line managers incorporated their knowledge, but, just as importantly, also helped to raise their acceptance of the process.
Ergon Energy built engagement through:
The overall strategic plan of Ergon Energy has been incorporated into the workforce planning process, ensuring there is a more consistent future vision across both business and workforce planning. In addition, this integration has also filtered down to the business unit level, where individual work group business plans were incorporated into the workforce plan. The workforce planning team was involved in the development of the business scenarios, which were later used in the demand forecasting phase. Ergon Energy expects that this alignment between overall business planning and workforce planning will continue to develop and relationships created now will be further solidified in future iterations of the process.
The increasing maturity of Ergon Energy in workforce planning is perhaps most obvious in the development and utilisation of scenarios. Previous to the most recent iteration of the process, Ergon Energy had simply worked off strategic plans to guide demand forecasts; this was the first time the organisation used formal scenarios. In this case, demand forecasting was based on business scenarios created through consultation with approximately 11 executives and subject matter experts across the business, signed off by the Executive Management Team. The scenario planning workshops were somewhat of an ‘eye opener’ for some of the people involved, as they were not aware of some of the issues identified as impacting upon the organisation. The two scenarios, both predicting overall growth of the organisation, included a number of assumptions concerning events in the external environment. Technological change is widely predicted to have significant effects on electricity providers across the nation, with the introduction of Advanced Metering Technology and Field Force Automation, amongst other issues, altering the labour requirements of the organisation. Government initiatives, along with more general deregulation of the electricity market will also shape the future labour force.
Supply forecasting began with workforce analysis to further understand and gain data on potential workforce risks and to research the likely availability of workers externally. Ergon Energy utilised their Infohrm Workforce Planning membership to develop the supply forecasts, based on data extracted from their HRIS including workforce size, age and termination rates.
Demand forecasting was undertaken at a business unit level across the organisation. All Executive General Managers and those General Managers from large business units participated in the process, resulting in over 30 demand forecasting meetings. Forecasts were created in consideration of the business scenarios created, using a qualitative approach. While the use of multiple scenarios may have been problematic in this phase, the workforce planning experience of the organisation was highlighted in the fact that the process was not delayed. The use of a solid, widely accepted, business scenario document meant the phase was clearer than in the past. The general conclusions were that while the workforce in field positions was expected to remain of similar size, productivity improvements and work redesign meant demand for office based roles would decline. A key aspect of these demand forecasts were that they reflected the expectation present in the business scenarios that the organisation would operate more commercially minded.
While it is uncertain how the relationship between workforce planning and the operational planning will sit together in the future, the two groups are keeping an eye on each other’s progress and working towards integrating further in the future. Currently, the organisation is making sure that there is alignment at the business scenario level so that that everyone is working off the same page.
Gap analysis was undertaken at the whole of business, business unit, and critical job role levels. Demand and Supply forecasts were calculated and then analysed. The most recent iteration of workforce planning introduced a number of changes to the analysis process. Instead of prioritising the gaps in isolation of the business, the analysis undertaken was aligned with other business processes ensuring linkage to the broader business. In addition, HR was more closely involved on a number of levels, so workforce planning really became part of the HR function, as opposed to another background activity.
As mentioned, Ergon Energy focussed on integrating workforce planning with broader business planning in the latest iteration of the process. Perhaps the most critical aspect of this integration is the degree to which those strategies developed as part of workforce planning align with the broader aims of the organisation. For this to be ensured, strategies were developed through a workshop, designed to bring together a range of perspectives from throughout the organisation. In addition to those directly involved in the project, individuals with content knowledge of business activities were included to ensure integration with the strategic and business planning processes.
The results of Ergon Energy’s workforce planning projects have steadily increased since the first iteration of the process. While the initial project developed a range of workforce recommendations, these were not undertaken widely, mainly as a response to the project being completed in isolation from other business activities, with little delegation of responsibility to implement the findings. The more consultative approach across the organisation, incorporating discussions around broader business planning issues, led to a greater number of recommendations being undertaken in the second iteration. The process today enjoys a high level of management participation, boosted by the formal implementation plans in place.
The Strategic Workforce Plan 2008-2018 was developed in the latest iteration of workforce planning. Approved by the Executive Management Team, it contains a range of workforce recommendations to address the critical gaps identified. This report took simple strategy development one step further than previous iterations of the process by incorporating action planning into the recommended strategies. This report was a simpler and easier to read document than previous final reports, making use of ‘Plan on a page’ style summaries to highlight the key points, critical issues and strategies at the whole of business, business unit and critical job role levels.
The workforce planning team has engaged in ongoing communications across the organisation since the development of the plan itself, in order to raise the profile of workforce planning, and to further develop understanding of its purpose. This has translated into a commitment from the organisation to reflect the findings and recommendations of the plan in the outcomes of business planning sessions.