There has been a groundswell of strategic workforce planning (SWP) in the land and maritime defence industries. While this is good news, a genuine integration of workplace relations into the SWP process has largely been missing. With workforce transformation the norm, it is vital for businesses to think about both of these disciplines in unison. This article, the second in our series, explains the significant benefits of integrating workplace relations into the SWP process.
It is cliché but true: an organisation’s people are its most important asset. And Australia’s defence industry, in particular, is a talent-based sector that depends on a reliable yet flexible skilled workforce.
Since the ‘Valley of Death’, defence industry participants will know the importance of optimising the workforce to meet business requirements. As a result they have actively engaged in strategic workforce planning (SWP).
While it is widely acknowledged that SWP should not occur in isolation, one critical co-dependency is often overlooked – workplace relations.
By taking into account workplace relations, a HR professional can have confidence that the workforce planning and major change processes will not only be compliant with the legislative requirements, but will also drive productivity, flexibility, employee engagement and workplace culture.
SWP typically identifies a series of changes that will help achieve the optimal workforce. While many organisations already invest in SWP, it is essential that they also consider the workplace relations implications of workforce planning activities. A failure to do so gives rise to significant risks and lost opportunities. Conversely, a coordinated approach to workplace relations and workforce planning will increase the effectiveness of workforce transformation and other HR-related change activities.
Here are some risk areas to focus on.
Some organisations may downplay the potential effects and outcomes of workforce planning to reassure employees. This is a risky approach. Failing to engage in consultation until after the time specified in the relevant industrial instrument can unravel the entire transformation process if this procedural error is brought before the Fair Work Commission.
This is not something to be taken lightly. At a minimum, it is important to comply with the consultation requirements of the applicable industrial instrument. Better yet, a robust business case, well-articulated narrative, and comprehensive consultation program, will help maintain employee engagement and ensure the business’ change rationale is well-understood.
By offering a payout to employees above the minimum requirement, voluntary redundancies act as a mechanism to incentivise employees to leave the workforce. Despite the relatively high financial cost, this strategy may be preferred as it tends to inflict less cultural damage and carries less exposure to unfair dismissal and breach of contract claims vis-à-vis involuntary redundancy. However, depending on execution, voluntary redundancy may lead to a loss of an excessive number of employees or particularly talented employees, and thereby create capability gaps within the workforce. Businesses should therefore plan any voluntary redundancy program carefully to maximise effectiveness and minimise adverse consequences.
Where a business wants to implement a forced redundancy program, it is essential to adhere to the multilayered obligations of the relevant industrial instrument. This may include the selection criteria to be applied, the level of trade union and employee consultation that occurs, the notice period that is provided, and the final payout sum.
Regardless of whether an employer chooses a voluntary or involuntary redundancy program, a wrong-step or miscalculation can undermine what would otherwise deliver much-needed workforce efficiency and productivity gains.
Where an organisation considers redefining roles or positions, it is important to think about the impact this process will have both on the workforce as a whole and on individual employees. Key questions to ask are: What is the consultation process mandated by the enterprise agreement? What will the business do to ensure an effective outcome, and that employee morale and engagement is maintained in the process? By working with employees through a consultative workplace relations forum, organisations will more successfully win hearts and minds and achieve effective outcomes.
Workforce planning may identify efficiencies or improvements through mergers or acquisitions. The Transfer of Business provisions of the Fair Work Act 2009 (Cth) are very relevant where employees shift from one employment instrument to another. Transfer of certain entitlements such as redundancy and annual leave are not straightforward questions, and it is important to seek expert advice. Careful analysis of terms and conditions of employment should occur as part of the M&A due diligence processes, and forward-planning should be undertaken to mitigate the impact of any terms that threaten to undermine productivity or flexibility.
When SWP activity identifies specific roles as critical to the success of an organisation, or where there may be attraction or retention challenges, SWP may recommend that organisations employ specialised incentives such as bonuses, additional training, or increased remuneration. By integrating workplace relations into this process, an employer can be confident that it is utilising the most effective retention mechanisms that are consistent with the organisation’s industrial instruments. A holistic approach to workplace relations can help improve retention through strong employee recognition programs, friendly workplace cultures, flexible working arrangements and clear career pathways.
In identifying the optimal workforce for an organisation, SWP analyses a large variety of data. Workplace relations can provide valuable insights regarding the implications for an organisation when selecting modes of employment, including whether an enterprise agreement passes the ‘better off overall test’ (the ‘BOOT’), which industrial instrument will help drive productivity, and which instrument will meet the flexibility requirements of the business. Having absolute clarity about these technical matters will help ensure a business’ significant planning efforts are not be undone when it comes time to implementation.
SWP provides an understanding of how a workforce will need to evolve over time to align to the organisational business strategy and future needs. When supported with a strong workplace approach, an organisation can have confidence that it can achieve those goals with minimal industrial disruption.
Therefore, whether operating under the Manufacturing and Associated Industries and Occupations Award, an enterprise agreement or another industrial instrument, participants in the Defence industry will be better-positioned for sustainable success by combining SWP with workplace relations.
Thanks to Paul Bayly-Jones for contributions to this article.