Developing Succession Or Manage Workforce Planning: A Case Study Of Bulla Dairy Foods

Discuss about the Developing Succession or Manage Workforce Planning.

 

 

This report is based on the subject area of workforce planning and management. The report is divided into two parts. The organization selected for this study is the major dairy food manufacturing company in Australia called Bulla Dairy Firms. In the first part, the report discusses about the current situations of the Australian dairy food manufacturing industry and Bulla Dairy Foods. At the same time, the report also focuses on the analysis of the future prospects of the company. The study also presents analyses of the labor market in the current situation and suggests future growth strategies.

In the second assessment, the primary focus is on the development of a strategy implementation plan for addressing the internal workforce need of Bulla Dairy Foods. After the strategy implementation planning, the report reviews the plan for workforce and evaluates the same.

Factors that affect the supply of labor in Australian dairy industry

In the analysis of the Australian Dairy industry, it can be stated that there are many factors that can affect the supply of labor for the Australian dairy industry. One of the major factors is policy uncertainties. Due to the uncertainties in the policies of Australian dairy industry, the fear of unemployment arises in the minds of Australian dairy workers. Due to this, the labor supply has been negatively affected. For example, currently, only 39000 people are working in the whole dairy industry in Australia, which is much lower than the other sector like hospitality (1200000 employees). Apart from policy uncertainties, the labor supply in Australian dairy industry is also positively affected by remuneration. The amount of money paid to the workers in this industry is quite good. Due to this, many people are becoming interested to work in this industry. As per the current data, the labor supply curve of the industry is upward trending because of the rise in rate of wage.

Opportunity of overtime work is more in the Australian dairy industry and thus, the scope of additional income is high. This has positively contributed to the  labor supply in the industry. Enhancement of occupational labor mobility is another factor that has affected the labor supply in Australian dairy industry negatively. Occupational mobility refers to ease of labor movement from one job to another. The young generation is moving out from this industry. The current data shows that the total number of employees in the industry is 39000 only, which indicates undersupply of labor in the industry.

The following factors shape the labor demand in Australian dairy industry. These factors are discussed as under:

The primary factor that has affected labor demand in Australian dairy industry is increased target of dairy production. The companies under this industry are trying hard to increase their production level so that they can export more and improve the profit percentage. Therefore, the labor demand is also increasing. On the other hand, increasing number of organizations is another factor that is positively affecting the labor demand in Australian dairy industry. In 2015, total number of dairy firms in Australia was 528, in comparison to 2011 where the number of diary firms were around 507 only. Due to this increasing trend, the demand for properly skilled experts is also increasing. At the same time, the increasing demand for the dairy products in the national and international market has also positively influenced the demand for labor.

If the Australian dairy industry is compared with the dairy industries around the world, then it can be seen that, Australia is far behind in case of dairy production. It contributes  only 5% of the total dairy production in the world, whereas Japan contributes 19%, South East Asia contributes 30% and Middle East contributes around 10%. According to International Journal of Sociology of Agriculture and Food, 2014, the federal government of Australia has started to take new steps for increasing farming workforce in the country. The federal government of Australia is also focusing on the sustainability of the agriculture and dairy production. However, considering the current state of Australian dairy industry, it can be stated that Australian dairy industry must prioritize the planning for its workforce.

On the other side, the state government of Queensland, Australia has announced in the beginning of 2016 that it is time to support the farmers in the Australian dairy industry.  With the help of government’s support, the farmers or the laborers in the dairy industry are being able to improve their skills through extensive training procedures. On the other side, the dairy companies are demanding for this skilled labor. Therefore, the government’s support is indirectly influencing the labor demand. The current decrease in the price of milk has influenced the state government to take coordinated approach. At the same time, the local government in Victoria is also monitoring the labor flow in the dairy industry. The local government has focused more on labor welfare so that the supply of labor can be increased. The local government has arranged for free training programs for the farmers and at the same time, has also provided monetary supports to the farmers. For example, in the beginning of 2016, the government has provided $11.4 million package to the dairy farmers.

Bulla Dairy Foods is one of the major family owned dairy food manufacturing organization in Australia. Bulla family has been operating its business for more than 100 years contributing significantly to the growth of the Australian Dairy industry. Current employee strength of the organization is 450.

Identifying whether the staff diversity meets the current organizational requirements

The current organizational requirement at Bulla Dairy Foods is to increase milk production and thereby increase the revenue.. However, achieving the organizational requirements needs proper workforce and strategies. Therefore in order to check the feasibility of the success of Bulla Dairy’s organizational strategies, it is important to evaluate the staff diversity within the organization. The evaluation of two staff diversity variables at Bulla Dairy Foods has been stated below:

Gender diversity: At Bulla Dairy Foods, the number of male employees is more than the number of female employees. Moreover, Bulla Dairy Foods has recruited the male employees for the primary activities of the firm which include extracting the milk, operating the machines and marketing activities. On the other side, female employees are engaged with the secondary activities like, taking care of the animals, packaging. The management team is comprised of both male and female employees.  Therefore, it can be said that the gender diversity at Bulla Dairy Foods meets the requirements of the company. However, there is no indirect discrimination between the male and female employees for the primary and secondary activities.

Age group: At Bulla Dairy Foods, majorly young employees are engaged with core production and marketing activities because young employees are quick learners. Moreover, there are certain tenured  employees who can perform better and in an organized manner as compared to the younger workforce.  Therefore, the possibility of hampering the production and marketing activities is less. On the other side, the management team of the organization has included senior employees because their experiences help the organization to identify effective strategies at the right time. Hence, the age diversity is also effective for meeting the organization’s requirements.

Currently, Bulla Dairy Foods has started to expand its business in international market and so the company has taken the strategy of selling the products through super markets. This strategy requires an effective workforce in the supply chain. The company has recruited efficient employees for the supply chain so that the flow of products never gets hampered. On the other hand, the company has recruited educated people in the marketing team, who can deal with international business organizations. Furthermore the  strategy that the organization has taken is high production with minimum cost. In order to meet this particular strategy, the company has recruited skilled workforce so that the production can be higher. However, due to the employment of skilled workforce, the company has had to recruit less number of people. Hence, the costs of salaries and wages were reduced . At the same time, the company is also providing training to the employees on a quarterly basis, so that they can perform better. Therefore, the workforce planning of Bulla Dairy Foods is aligned with the organizational strategies.

Few years back, the staff turnover at Bulla Dairy Foods was average. However, currently, the staff turnover within the organization has started to increase, which is not acceptable. The employee base in the organization is 450, which is much lower than before. In 2013-2014, the turnover rate was 7.2%, which increased to 8.62% in 2014-2015 and 15.09% in 2015-2016. This means the total staff turnover increased by 7.89% from 2013 to 2016. This increased staff turnover can affect the production and distribution of the productions also loss of knowledge for the business. However, this issue of staff turnover can be solved by the following strategies:

Increase the salary and wage level by reducing useless costs. At Bulla Dairy Foods, the wastage is high, which causes extra cost. Therefore, if the company reduces the wastage, then it can use that money in the payment of salaries and wages. If the salaries and wages are competitive, the employees will not leave the organization.

The firm needs to create a healthy working environment. It must maintain the hygiene level.

The firm must try to build team unity among the employees. This will enhance the productivity of the employees.

There must be friendly management within the organization. Good relationship between management and employees is very important for reducing the staff turnover.

In order to get the skilled labor from the external sources, the company needs to apply the following strategies:

The company can use the medium of social media to find the skilled labor. The social media like LinkedIn is very popular selection of appropriate candidates as per the organization’s desire. There is another option available to the management and that is the referral system. The company can introduce an incentive system for referring the skilled labor force. However, this must be restricted to the tenured employees.

The company can also hold an open day for taking the interview of the local candidates.

Developing the contingency options to deal with the extreme situations

There may be different extreme situations, which Bulla Dairy Foods have to deal. Some of the extreme situations and the contingency options are as under:

• Loss of large number of retiring personnel: In order to handle this situation, the company must provide proper training to the employees, who are working for more than 10 years in the dairy industry or within the organization, so that they can handle the situation.
• Health epidemic: In order to handle the health epidemic situation, the company must maintain the hygiene factor within the workplace. At the same time, the company must start the free clinic facility for the employees.
• Unavailability of replacement workers at remote places: This situation can be handled by taking the strategy of providing free lodging, meal and travelling facilities to the employees belong from the urban areas. This particular strategy will attract the employees because their cost of living will be less.

Review of organizational strategy and change determination

Current workforce strategies at Bulla Dairy Foods:

• Provide an initial 1 month training to each new employee recruited within the organization
• One time training to the existing employees
• Salary and wage increment once a year. The company has taken this strategy to reduce the cost.
• Recruit local people who can work for long time.

Modification or changes in the workforce strategies:

• As Bulla Dairy is going to expand its business in the future, the management needs to introduce some new products, which requires more skilled labour. The company will get skilled labour by providing training to the existing employees for at least 4 times in a year.
• In order to get the skilled labour for the new products, the company will recruit some new employees who already have experience in dairy production.
• The management will introduce some contests for the existing employees so that they perform better than before.

Determining the organization’s workforce needs

There are four main departments at Bulla Dairy Foods and these are – production, operation, marketing and finance. Among 450 employees, the firm has recruited maximum employees in the production department that is 348 and minimum employees in the finance department that is 11. However, in order to achieve the organization’s goal and maintain acceptable performance level, the organization needs to increase workforce in the marketing department which is currently at  57. This will help the company to capture the international market in a better way. The company needs to enhance the workforce in production department in order to produce more. The workforce is also needed to be increased in the operation department which is currently 34. However, the workforce in the finance department need not be changed. However, in order to expand the business more, the company needs to increase its workforce at least by 5%.

Analyze the current workforce capacity to meet the predicted demand for goods and services

Presently, the overall production of dairy products in the Australian market is 9.73 billion liters. However, in the Australian market, the demand for dairy products is 50% of the production. Currently, the workforce of the Bulla Dairy Foods is able to produce nearly 88% of the total country’s demand along with Bega Cheese Limited and Warrnambool Cheese & Butter WCB. This indicates that the current capacity of Bulla’s workforce is more of less good as per country’s demand. However, the organization needs to improve the capacity so that it can meet the maximum demand alone. In order to do that, the company needs to increase its current workforce in each department. No labor transfer can be done because a production department’s employee cannot work properly in the finance department. Hence, the organization needs to recruit expert employee in each department.

Strategies to identify the gaps of future required staff

• The firm should retain the existing employees in the production department.
• The firm needs to recruit more skilled employees in the operation and marketing department.
• The firm should retrench the employees in the production department.
• Developing the communication strategies

The firm can communicate the change to the effected staffs through face-to-face meetings and emails. This will help the management to communicate the change in a systematic way. At the same time, this will be verbal and written communication, which will help the employees to understand the change in a better way.

Recruit at least 50 experienced marketing people: The management must recruit 50 experienced marketing people with experience of minimum 7 years. This will help the firm to get improved marketing ideas and utilize their skills in international marketing.

Pay higher salary than the competitors: This is very important for keep the experienced staff within the firm. This will help to reduce the turnover of experienced people and help to keep sufficient qualified staff in house.

Use social media: The management of the company can use social media in order to get highly knowledgeable workforce. At the same time, the organization needs to provide more training to the existing employees.

Plan for diversity management, recruitment, training, redeployment and redundancy at Bulla Dairy Foods

Internal labour needs identified	Strategies to address need in the next year	Required resources or budget	Timeframe
10 female employees are needed for better customer relationship management in the international market	The organization must employ more female employees in the marketing department in order to build up and maintain the customer relationship in the international market. Female employees are needed to be implemented because at Bulla Dairy Foods the number of female employees is less and if the organization employs more male employees, then there will be misbalance in the gender diversity management of the company. This strategy will also help the organization to meet the customized planning need principle of succession planning.	The firm must budget 10% of its total cost for employing new female employees	Within next 1 to 3 months By 31 Jan 2017
Need 2 experienced  people for taking decision in critical situations.	The company must recruit the experienced people who are above 45 years because it is seen that senior employees are often able to take better decisions in the critical situations. This is because they have faced greater challenges as compared to the younger workforce.	Include 7% of the total cost of the organization.	Within next 4 months By 28 Feb 2017
Recruitment of 20 skilled employees	Take practical test to identify time management and quality of work of the new applicants, at the time of recruitment. Involve top management personnel at the time of taking the test because top management personnel have more judgmental capacity. This will also help Bulla Dairy Foods to meet the succession planning principle.	Top management personnel Involve 0.5% of the total cost	Take the test at the time of taking 2nd round of interview. Involve 2 hours Implement by 30 Nov 2016
Increase the workforce for product promotion	In the marketing department, the management must employ the people who are willing to travel in different places for promoting the products. The employees may be male or female and young or aged.	Involve 10% of the total budget for this recruitment.	Within 3 to 4 months
Urgent training Currently, many employees in the production department are not much familiar with the use of new machineries. Training required for 270 employees	Company must arrange for the employees’ training session for at least 3 times in a year. This will help the company to educate its people regarding the use of new machineries. The employees will be updated. At the same time, some repetitive training is required because if an employee fails to perform better after one training session, he or she can try to understand the whole thing again in the next training session.	Involve 30% of the total cost of the company in total training session in a year.	Involve 3 days in each training session. Total number of days for the training of the employees in a year is 9 days Complete by 30 April 2017
Need of proper motivation for improving the employees’ productivity and reducing the rate of employee turnover	Start entertainment sessions for each month. Include game show, quiz competition, parties. In the entertainment session. Provide different types of awards to the employees of different departments. For example, Employee of the Month award, and award for highest attendance. This will help the organization to influence its employees for better performance.	Involve 5% of the total costs of the organization. Involve the middle level management team for organizing these events	1 day in each month Commence by 1 October 2016
Need employee management interaction	Arrange for employee-management meetings on quarterly basis. This will help the management of Bulla Dairy Foods to convey their ideas and strategies to the lower level employees. At the same time, management also needs to consider the ideas of the lower level employees in decision-making. Due to this type of meeting, employees will feel that they are also important part of the organization.	Involve all the lower level employees, top level and lower level management in the meetings	1 day in each 3 months

Table 1: Planning Chart

(Source:20)

Therefore, from the above table, it can be said that there are various strategies that the organization (Bulla Dairy Foods) needs to implement in the coming future. These strategies will help the organization to achieve its goal or future targets successfully and at the same time, this will help the organization to reduce its employee turnover percentage.

It has been identified before that the employee turnover rate at Bulla Dairy Foods has currently started to increase.  This type of situation indicates that the company needs to recruit better people for the future days. The staff turnover figures at Bulla Dairy Foods  in last three years and the future staff requirement of the organization are shown in the below table:

Years	Number of employees	Percentage of turnover
2013	625	-
2014	580	7.2%
2015	530	8.62%
2016	450	15.09%
2017 (future requirement)	475	10.38%

Table 2: Employee turnover ratio

(Source:21)

The above table is disclosing that from 2013-2014 to 2015-2016, the employee turnover rate has increased from 7.2% to 15.09%, which means that the percentage increased by 7.89%. However, for the next year, the management of Bulla Dairy Foods has decided to increase the workforce from 450 people to 475 people. This will result in the decrease of staff turnover rate by near about 5%. However, this percentage can be achieved with the help of two basic strategies, which are mentioned below:

Recruitment strategy: The management of Bulla Dairy Foods must recruit the people by taking proper quality tests and at the same time, it must focus on the recruitment of experienced candidates. The company should emphasize on the employment of female employees.

Rewarding strategy: The organization must reward the efficient employees on the monthly basis. This will develop a competitive attitude and interest in the mind of the staffs.

Figure 1: Organization’s chart

(Source:22)

The above figure is showing the organizational flow at Bulla Dairy Foods. In this organizational chart, there are five key positions and that are – managing director, production manager, marketing manager, operation manager and finance manager. This particular structure shows that the managing director of the company recruits the managers of the four major departments of the company. This recruitment is done internally for the managerial posts. This is because the managers must be aware of each activity of the company in past, which is possible only if the recruitment is done from the internal source. However, the recruitment for the other posts is done from the external recruitment  sources.

A succession plan to ensure that the organization is the best employer

An organization can be the best employer when it meets the requirements of the employees. In case of Bulla Dairy Foods, the employee turnover rate is increasing, which indicates that the company needs to take care of its employees. Therefore, a proper succession planning is required to improve the current position of the company.

In order to identify the staff for the succession, the higher management at Bulla Dairy Foods needs to analyze and evaluate the performance of each employee on a weekly basis. This will help the management to identify the employees, who need performance improvements. At the same time, the management also needs to identify the employees, who are interested to improve their career in future.

After identifying the staff for the succession, the management at Bulla Dairy Foods needs to develop strategies for the succession plan. The management of Bulla Dairy Foods can take the following strategies:

The Management needs to monitor the succession program carefully at a regular interval. In order to do that, the management should provide the scope to the employees to learn the activities in a better way from the experienced personnel like, production supervisor for the employees of production department and marketing head for the marketing employees within the organization. The management can build a team with experienced and weak-performed employees, so that the weak-performing employees can learn in a better way. At the same time, the management can introduce special external management programs and special projects for improving the staffs’ quality. After one month, the management needs to analyze whether the performance level has been improved or not.

Career development activities are also effective for the implementation of the succession plan at Bulla Dairy Foods. In these programs, the management should provide the tools to the employees, so that they can measure their own performance. It helps the employees to develop their career more effectively.

Review the workforce plan

Presently, at Bulla Dairy Foods, most of the employees are male and young people. However, as per the new workforce plan, the organization will recruit more female employees and some experienced employees, who are above 45 years age group. These changes in the workforce will change the patterns of the existing employees. The existing female employees will be motivated, as the percentage of female within the organization will increase. At the same time, the female employees will feel more secure at workplace and the dominance of the male employees will be reduced. Due to the recruitment of experienced and relatively older people, the company will be able to improve the performance of the existing young employees because the young people will learn from the experienced people. The current workforce plan of the organization is not a low level workforce plan; however, the management must improve it to perform better in the future years.

Climate survey to 10 employees and line managers

How long are you working at Bulla Dairy Foods?

Options	Percentage of respondents	Number of respondents	Total respondents
Less than 1 year	20%	2	10
1 to 3 years	70%	7	10
More than 3 years	10%	1	10

Table 3: Tenure of the employees and managers

How far do you believe that current working environment at Bulla Dairy Foods is healthy?

Options	Percentage of respondents	Number of respondents	Total respondents
Strongly believe	0%	0	10
Believe	30%	3	10
Neutral	10%	1	10
Disbelieve	40%	4	10
Strongly disbelieve	20%	2	10

Table 4: Satisfaction level of the employees and line managers

How far do you believe that Bulla Dairy Foods needs to change the current working environment?

Options	Percentage of respondents	Number of respondents	Total respondents
Strongly believe	30%	3	10
Believe	40%	4	10
Neutral	0%	0	10
Disbelieve	20%	2	10
Strongly  disbelieve	10%	1	10

Table 5: Employees’ and line managers’ view regarding the change in Bulla’s current working environment

Objectives:

• To create a healthy environment at the workplace.
• To motivate the female employees towards better performance.
• To motivate all the existing employees to learn better techniques of performance improvements from the experienced people.

Strategies:

• The management at Bulla Dairy Foods must develop new policies for the maintenance of the hygiene factor at workplace.
• The management must inform all the employees regarding new environmental policy, so that everyone can be responsible.
• New teams must be built by including all types of employees like, experienced and inexperienced, male and female, young and aged.
• Impact of global trends and incidents on workforce planning

Impact of climate change: The production at Bulla Dairy Foods can be hampered due to the climate change because the production of milk is highly affected by the temperature. Therefore, in such  situations can affect and hamper productivity which in turn can have an adverse affect on the profitability of the organization.  As a result the company will not be able to pay the reward and salaries to the employees. Hence, the workforce planning will be a failure.

Workforce casualisation: Due to the workforce casualisation, the discipline within the organization will be directly affected. Excessive casual attitude of the employees hampers their performance resulting in ineffective workforce planning. .

Epidemic: Due to epidemics, employees will be physically unable to perform better and the employees, who are not affected by epidemics, will also refuse to come to the organization.

In the report on Bulla Dairy Foods it has been identified that the current workforce at the organization is mainly male oriented. The number of female employees is less and at the same time, the number of tenured employeesare also less. However, with the help of new succession planning the company wants to improve the performance of its employees. In order to create a successful succession plan and implement the same, the organization needs to adopt several strategies. However, there may be some barriers while implementing the succession or workforce planning which the organization needs to overcome.

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