Managing Your Business’ Workforce Is Key to Survival

While Australia’s economy has remained relatively stable compared to other nations during global disruptions, many businesses have still faced significant challenges. Rising costs, digital transformation, and labour shortages have forced organisations to re-evaluate not just how they operate—but how they manage and retain their most important asset: their people.

In most industries, workforce costs represent the largest business expense—but they’re also a key driver of innovation, resilience, and customer experience. That’s why investing in effective workforce planning and talent management strategies is no longer optional—it’s critical to sustainable business growth.

Why Downsizing Often Backfires

It’s tempting to cut jobs when finances are tight. But research consistently shows that mass layoffs can trigger long-term damage—especially if not part of a strategic workforce plan. The Australian Psychological Society’s College of Organisational Psychologists (COP) reports that organisations that downsize by more than 10% experience a subsequent voluntary turnover rate of up to 50% among remaining staff.

Beyond morale loss and productivity dips, the cost of replacing staff can be staggering. Depending on the role, turnover can cost 2.5 to 10 times an employee’s salary—including lost knowledge, recruitment costs, training time, and reduced efficiency.

In contrast, retaining and developing employees offers one of the highest returns on investment a business can make. That’s where a clear workforce strategy comes in.

4 Key Steps to Building a Future-Ready Workforce Strategy

According to the COP, here’s how businesses can protect and optimise their talent while navigating economic uncertainty and change:

1. Identify Core Capabilities

Start by identifying the critical skills and functions that drive value in your business. What roles are mission-critical? Which areas will support long-term growth or competitive advantage?

This clarity helps avoid the risk of losing key capabilities or overspending on non-essential functions.

2. Assess the Value of Roles

Not all roles have equal strategic value. Evaluate the impact of different positions on your organisation’s goals—and consider whether some tasks can be automated, restructured, or outsourced without compromising quality or continuity.

3. Align HR Policies with Role Importance

Tailor your HR approach to the importance of each role:

• High-impact roles may warrant greater investment in training, compensation, and retention initiatives
• Less critical functions may benefit from more flexible, cost-effective arrangements

Defining a strong employment value proposition for key staff can also improve loyalty and engagement.

4. Link Strategy to Human Capital Levers

Ensure your plan addresses all three elements of talent management:

• Acquisition: Modernise recruitment strategies to attract diverse, skilled candidates
• Engagement & Retention: Use clear performance management, feedback loops, and employee recognition to maintain morale and productivity
• Development: Invest in upskilling and career pathways with online courses that align with emerging business needs

Done well, this approach not only retains top talent—but builds internal capability for future growth.

Workforce Planning: Key Considerations

Today’s businesses must manage change at speed while navigating:

• Skills shortages in tech, health, and trades
• Flexible work expectations from a post-pandemic workforce
• Automation and AI transforming how teams operate
• Generational shifts in employee values and career goals

That’s why many organisations are now embedding continuous workforce planning into their operations—not just to survive, but to stay competitive and attract the next generation of skilled talent.

Support for Business Leaders and HR Professionals

Whether you’re managing a small team or leading HR for a growing organisation, the right training can help you build practical and strategic workforce capabilities.

Explore relevant training options:

• Human resource management courses
• Leadership and change management
• Project and operations management
• Business strategy and administration

You can also access resources from the Australian Government’s business portal for help with hiring, upskilling staff, or accessing workforce funding initiatives.