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12-WorkforcePlanning.pptxWorkforce Planning
What is workforce planning?
Workforce planning (WP)
An effort to anticipate future business and environmental demands on an organization and to meet the HR requirements dictated by these conditions
The objective of WP is to have the wisest, most effective use of talent in the interest of both the individual and the organization
Strategies and plans
Strategies are the means that organizations use to compete (e.g., quality, speed, cost, etc.)
Plans are necessary in order to develop successful strategies
Planning leads to success (not intrinsically, but planners tend to outperform non-planners)
Plans give managers and supervisors a sense of control over the future and helps them cope with change
Plans require managers to define objectives, thus giving meaning and direction to employees’ work
Strategic planning
Strategic planning involves setting organizational objectives and deciding on action programs to achieve these objectives
A strategic plan answers two fundamental questions that are critical for managers:
What business are we in?
How shall we compete?
Strategic planning
Strategic planning typically includes the following processes:
Defining company philosophy by looking at why the company exists, how it is unique, etc.
Creating statements of organizational identity, purpose, and objectives
Evaluating the company’s strengths, weaknesses, opportunities, and threats in order to identify the factors that may enhance or limit the choice of any future courses of action
Determining the organization design (structure, processes, interrelationships) appropriate for managing the company’s chosen business
Developing appropriate strategies for achieving objectives, including subgoals
Devising programs to implement the strategies
Alternative strategies
Traditionally, organizations create a strategy to develop their identity
Their strategic plan is defined at the outset (“what do we want to be and how do we get there?”)
Example: FIU’s “World’s Ahead” or “Beyond Possible” strategic plans (http:// stratplan.fiu.edu/docs/WorldsAhead_StrategicPlan.pdf) (https://beyondpossible.fiu.edu/_assets/docs/Strategic-Plan.pdf)
Other organizations reflect on their own identity and differences from other organizations and then create plans that align with and capitalize on that uniqueness
Their strategic plan comes last, after the core values are determined (“what are we and how do we make the most of that?”)
HR strategies
What we’ve described so far are general business strategies
As fun as those are, we’re more concerned with how these overarching business strategies influence HR strategies and policies
HR strategy is the set of priorities a firm uses to align its resources, policies, and programs with its strategic business plan
The planning is done from the top down (e.g., from “how do we compete?” to “What competencies, incentives and work practices support high performance?”)
The execution proceeds from the bottom up
Workforce planning processes (long-term, middle-term, and short-term) are enacted correspondingly with business planning processes
Talent inventories
A talent inventory is a workforce-wide database of employees’ characteristics
They typically include several of the following for each employee:
Current position information
Previous positions in the company
Other significant work experience (e.g., other companies, military)
Education (including degrees, licenses, certifications)
Language skills and relevant international experience
Training and development programs attended
Community or industry leadership responsibilities
Current and past performance appraisal data
Disciplinary actions
Awards received
Personal information (career goals, hobbies, families, etc.)
Talent inventories
It is important to specify the primary uses of the inventory at the concept-development stage
This provides direction and scope regarding who and what kinds of data should be included
Some common uses of a talent inventory include:
Identification of candidates for promotion
Succession planning
Assignments to special projects
Transfer
Training
Workforce-diversity planning and reporting
Compensation planning
Career planning
Organizational analysis
Talent inventories
Example: IBM uses a staff-deployment tool called “Workforce Management Initiative”
It’s a sort of in-house version of Monster.com
Built on a database of 400,000 résumés
It lets managers search for employees with the precise skills they’ll need for particular projects
The initiative cost $100 million to build, but it has already saved over $500 million, and it has also improved productivity
Its greatest impact is in its ability to help managers analyze what skills staffers possess and how those talents match up to the business outlook, helping them decide whether to “buy,” “make,” or “rent” employees
Workforce forecasts
Workforce forecasts are attempts to estimate future labor requirements, based on:
The supply of human resources, both within the organization and outside
The anticipated organizational demand for various kinds of employees
Internal supply forecasts relate to conditions inside the organization (e.g., the age distribution of the workforce and average turnover, retirement, transfer, and new hires within job classes)
Demand forecasts depend primarily on some business factor (e.g., projected number of retail outlets, sales, and product volume)
Workforce forecasts
Consider some paradoxes of workforce forecasts:
The techniques are basically simple and easy to describe, but applying them successfully may be enormously complex and difficult
After the forecast has been made, it may prove to be most useful when it proves to be least accurate as a vision of the future
Example: a forecast points toward a surplus of middle managers with comparable skills who were hired at the same time to meet a sudden expansion. The forecast may be most useful if it stimulates action (e.g., appropriate training, transfer, promotion) so that the surplus never actually develops. It is useless only if the surplus develops on schedule as projected
Workforce supply
External
Several agencies forecast external supply (e.g., the Bureau of Labor Statistics)
It is important to look at both external supply AND demand
Internal
Leadership succession planning
Identify high-potential individuals, both within functions and corporate-wide
Develop pools of talent for critical positions
Create development plans for key leaders
CEO successions: 50% internal and 50% external
Maintenance of “intellectual capital” and motivate senior-level executives
Vs change and a new, possibly improved perspective on the company
Workforce demand
Demand forecasts are very subjective due to uncertainties regarding trends such as:
Changes in technology
Consumer attitudes and patterns of buying behavior
Local, national, and international economies
Number, size, and types of contracts won or lost
Government regulations that might open new markets or close off old ones
Workforce demand
Pivotal jobs
It is important to first identify the most critical jobs—those that drive the strategy and revenue stream
This categorizations allows an organization to understand how its talent relates to its strategy
To the extent that people are geographically mobile, multiskilled, and easily hired, there is less need for precise demand forecasts
The final product should be an analysis of the demands, supplies, and differences between them for each job
Workforce forecasts
“Making” versus “Buying”
In meeting labor demands there are two options:
Making: training people within the organization
Buying: hiring new people into the organization
In general, it’s more cost-effective to hire
Selecting quality employees can also increase the efficacy of training programs
A third option exists: Renting (contracting)
“Making” versus “Buying”
How accurate is your forecast of demand?
If not accurate, do more buying
Do you have the “scale” to develop?
If not, do more buying
Is there a job ladder to pull talent through?
If not, do more buying
How long will the talent be needed?
If not long, do more buying
Do you want to change culture/direction?
If yes, do more buying
Control and Evaluation
The function of control and evaluation is to guide the WP activities through time, identifying deviations from the plan and their causes
Monitoring performance
It is important to set subgoals to detect if the overall WP strategy is on track
Describe both how much change you expect to see and over how much time
Example: a decrease in absenteeism of 30% over three years
Control and Evaluation
Compare the costs of the WP process to its benefits; estimate the costs and benefits of alternative WP strategies
Evaluations of new WP strategies are likely to be more subjective, whereas older strategies may be examined with real data
It is the responsibility of every manager to make sure that the WP strategy is being enacted in their section of the organization
