Recruitment, Selection, and Personnel Planning-chapter 5 more key concepts (youtube.com) https://www.youtube.com/watch?v=PipdqAewoLU

Chapter 5 - Forecasting and Planning

Read the opening case on "Strategic Workforce Planning at Vistaprint" on page 171.

Strategic staffing is a proactive process, similar to just-in-time supply chain management. It involves managing a company's talent supply to ensure that it is always has enough of the right people in the right jobs at the right time. The first four chapters covered staffing context and job analysis. This chapter covers workforce planning.

Staffing experts and managers widely predict that organizations will face a challenging labor situation in the coming years as baby boomers retire and developing countries experience lower birth rates. Workforce planning is a strategic process that allows an organization to predict and manage its talent supply and demand. Yet, several organization fail to executive this process effectively.

The Workforce Planning Process

The workforce planning process has five steps:

1. Identify the firm's business strategy.
2. Articulate the firm's talent philosophy and strategic staffing decisions.
3. Conduct a workforce analysis.
4. Develop and implement action plans.
5. Monitor, evaluate, and revise the forecasts and action plans.

This process is illustrated in Figure 5-1 on page 173. Review this diagram and read through this information.

Forecasting a Firm's Labor Demand

Accurately forecasting business activity requires identifying key business activity factors, identifying quality sources of relevant forecasting information for those factors, and utilizing these sources to compile complete, accurate, and timely data. For example Con-way Freight complies monthly forecasts of customer demand, productivity goals, and scheduled and unscheduled absences to project hiring needs one to three months in advance.

Seasonal forecasts are those that occur during certain seasons like Christmas for retail and delivery companies and spring season for landscaping services. Interest rate forecastscan project the likelihood that a business will build new plants and increase production. For example, when interest rates are high, they may delay building a new plant, but when interest rates are low, they may start building a new plant. Rising interest rates generally suggest that the demand for labor will fall, whereas falling interest rates generally suggest that the demand for labor will rise. Currency exchange rates forecast must be used to determine staffing. If one country's currency is valued more than another, then it takes more currency of the less valued country to buy goods and services from the dominant country's companies. This increases the price of goods in the dominant country's companies. A good example is China. They continuously decrease their currency making their products cheaper and increasing demand, while making U. S. products more expensive decreasing their demand. Competition-Based forecasts focuses on understanding how increases in competitors can decrease demand for your products and cause the hiring forecasts to decrease. Yet, if competitors leave, then the hiring forecast for your organization might increase. Industry and economic forecasts include gross domestic product (GDP), the business inventories and sales ration tracked by the Department of Commerce, and the Purchasing Managers Index issued monthly by the Institute for Supply Management.

Legal factors like PPACA or Obamacare of 2010 affect the number of employees, because organizations with 50 or more employees are required to provide health insurance or pay a fine of $2,000 per employee. Other factors may be (1) an increase or decrease in consumer spending, (2) an increase or decrease in the unemployment rate, (3) an increase or decrease in the disposable income of consumers, (4) increased or decreased purchases of durable goods, and (5) increased or decreased housing purchases.

Internal forecasting tools like looking at revenue forecast, restructuring plans, growth strategy, and new services must be completed. Staffing ratios are a mathematical way of calculating the number of employees a firm needs to produce certain levels of output. Knowing the employee-productivity ratio is important to know when forecasting. For example, UPS knows that for every 22 packages crossing the border one employee is needed.

Scatter plots are a graphic that shows how two different variables are related. Figure 5-2 on page 175 illustrates a scatter plot. Trend analysis is using past employment patterns to predict future needs. Figure 5-3 on page 179 illustrates a trend analysis. Productivity ratio is the headcount or cost of direct labor, or workers who actually create products and provide services, divided by the cost of indirect labor, or workers who do not actually touch the company's product but who support the direct labor (management, accounting, human resources, etc. Judgmental forecasting relies on experience and insights of people in the organization to predict a firm's future employment needs. Return on investment analysis is another options, but generally is difficult to show value. For example, Walmart's staff reduction efforts led to understocked shelves and lost sales.

Forecasting a Firm's Labor Supply

Keeping up to date on labor market data is vital to ensuring you have enough people to hire to do the jobs needed. Transition analysis is a quantitative technique used to analyze internal labor markets and forecast internal labor supply. Figure 5-4 on page 183 illustrates this analysis. A transition probability analysis is show in Table 5-2 on page 184 and Table 5-3 on page 185 shows a forecasting transition probability matrix. Read through this information to ensure you understand this information.

Talent inventories are a detailed record or database that summarizes each employee's skills, competencies, and qualifications. Replacement charts are visuals that show each of the possible successors for a job and summarizes their present performance, promotion readiness, and development needs. An example of replacement of a replacement chart is shown in Figure 5-5 on page 187. Employee surveys help to monitor indicators that employees are dissatisfied. Also, including absenteeism and grievances reports help to determine turnover. Forecasting the external labor market can be done in two ways: observations and experience and monitoring market statistics generated by others like Bureau of Labor Statistics. The most popular sources of labor market information are listed on page 189. Tracking college enrollment and graduation trends zip code analysis to determine optimum areas where those qualified might be located are two more ways to forecast external labor market supply.

Resolving the Gaps between the Firm's Labor Supply and Labor Demand

To resolve the gaps, an action plan or strategy to proactively address an anticipated surplus or shortage of employees is required. Dealing with short-term shortages can be handled by temporary or contract workers and dealing with the reasons for turnover. Dealing with persistent talent shortages might require automation of jobs, self-service checkout lanes, business process outsources. Business process outsources is relocating an entire business function to an independent service provider. Dealing with temporary employee surplus may require contingent workers, layoffs, or scheduling changes. Dealing with persistent employee surplus may occur when technology changes, new competitors enter the market, and changes in customer preferences. Early retirement, layoffs, and not filling vacant positions are all strategies to address this issue.

Staffing Planning

In addition to workforce planning, it is also important to take the time to plan the staffing process. First you must determine how many people should be recruited. Staffing yields show the proportion of applicants moving from one stage of the hiring process to the next. Hiring yields show the percentage of applicants ultimately hired. Review Figure 5-6 on page 195 to see an example of a staffing yield pyramid.

What resources are needed is the next question to answer. Eight or more costs are related to external hiring: (1) agency or search firm fees, (2) employee referral bonuses, (4) company recruiter costs (5) candidate travel costs (6) job advertising expense (7) internal recruiter costs (8) cost of any assessments used to evaluate the candidates.

Two methods of estimating needed resources for a staffing effort: work-load driven forecasting and staff efficiency-drive forecasting are discussed on page 197. Workload-driven forecasting is based on historical data on the average number of hires typically made per recruiter or the average number of recruits processed per recruiter over a given period. Staffing efficiency is the total cost associated with the compensation of the newly hired employees.

How much time is will take to hire employees must be determined, so managers know when an employee will be in place for productivity purposes. Figure 5-7 on page 198 shows a typical hiring timeline. The timeline will depend on multiple factors including the position in the organization, the level of KSAOs needed, the efficiency of the HR department, and the money available to recruit. Continuous recruitment or sourcing and processing candidates before the positions even become open can help speed up the process, while batch recruitmentwhich involves recruiting an entirely new applicant pool every time the organization has one or more position to fill takes the most time.

Staffing Ethics Technology

On page 201 the leading indicators of ethical issues is listed. Analytics can also be used in staffing forecasting and planning. Demand forecasting predicts how busy an organization will be at any future moment and how many employees it will need to manage the resulting workflow.

Strategic Workforce Planning at Vistaprint

Read through this information on page 203-204.

After reading each chapter, you will need to read the summary, takeaway points, and complete the assignments for that chapter.

Review the lecture notes and book content and pick one of the items, google it, and list your item in the thread title. In the body of the thread post a description and/or definition of this item explaining the topic to the class.