8pg- HR Case Study




Chern's Internal Labor Market

Chern's Internal Labor Market

Forecasting labor demand

It is recommended that when forecasting the labor demand to identify minimal and optimal staffing levels, especially when analyzing the demands for labor. The demand for labor for Chern’s on the forecasted business activity and the business needs depends on the business strategy. The business needs include such things as attaining the staffing levels that are essential to generate given amounts of revenue within a specific period (Phillips & Gully, 2015). Increasing the staffing levels will execute a growth strategy whereas decreasing the staffing levels during the restructuring process of obtaining the new talents required creating other products or offering different services. In essence, there are many ways used to forecast labor demand using methods such as judgmental forecasting, trend analysis, scatter plots, and the ratio analysis.

Strategic staffing

The strategic staffing necessitates organizations and firms to keep their fingers on the beat of the labor markets (Phillips & Gully, 2015). Therefore, understanding both the future and the current competency trends and skills in the labor market is essential for Chern’s to retain its competitive edge. To forecast the labor supplies, Chern’s should be in a position to integrate the existing staffing levels together with the anticipated staffing losses and gains since it would result to an estimate of the labor supply for the targeted position at a particular point in future. The anticipated losses and gains could be based on the historical data that is combined with the managerial estimates of any future changes.

Forecasted Employees for Next Year

Job Category







Current no. of Employees

FTSA (Full-Time Sales Associates)








PTSA (Part-Time Sales Associates)








DEP (Department Manager)








BUY (Buyers)








MER (Merchandising Managers)








Forecast for Next Year













Forecasted employees

Chern’s is expected to carry out an action plan to proactively address the anticipated shortage or surplus of employees. This process will allow Chern’s to address the issues of gaps between the number of the current employees and the number intended. Knowing whether a surplus or shortage of applicants is the result for temporary factors and whether it reflects the trend that could continue is essential since different staffing strategies are fundamental for each (Phillips & Gully, 2015). The table reveals that Chern’s contains a surplus of employees. Therefore, Chern’s is required to transfer some of its employees to other locations that it has planned within the five-year growth strategy.

Most of the surplus employees could be transferred to fifteen other stores that Chern’s intends to open every year which will be funded with its growing income and revenues. This action will benefit Chern’s since few employees are required to staff the new stores while consequently reducing the staffing costs. Additionally, Chern’s would be in a position to retain most of its talent to grow the company and enhance its competitive advantages. Nonetheless, if this action proves impossible, Chern’s will not have alternative solutions depending on whether or not the surpluses are permanent or temporary. The matrix allows Chern’s to observe its forecasted employees for the forthcoming year within its flagship store.

Forecasted labor supply

Transition analysis refers to a simple quantitative method used to forecast the internal labor supply and the internal labor markets. Despite its simplicity, it remains to be an effective technique to analyze the internal labor market of an organization which is useful in workforce planning and provides solutions to the recruit’s questions on the possibility of promotions and promotion paths. Transition analysis also helps in forecasting the number of employees who are currently working within an organization and could be employed in several positions in the future (Bureau of Labor Statistics, 2018). Though, the transition analysis is best carried out for a limited number of jobs which eventually makes Chern’s an appropriate candidate for the informative method.

Anticipated surplus

The company is likely to experience a temporary slowdown, and in case it happens regularly, it would be for the best interest to use contingent or temporary workers in future who should be allowed to go easily especially when the business is low. This process will aid to buffer the main permanent workers and even offer them enhanced employment security (Bureau of Labor Statistics, 2018). The temporary layoffs are an alternative although it could last beyond six months. Besides, it can be cost-effective because of retraining and rehiring process, enhanced unemployment insurance premiums, and the severance costs. Some of the alternatives to layoffs are across-the-board salary cuts and the reduction in work hours or the reallocation of workers to expanding areas of the business. Most options are likely to cost less when it has been implemented.

The surpluses could be as well permanent or persistent. Therefore, Chern’s would consider not filling the vacated positions, permanent layoffs, and implementing the early retirement incentives. The early retirement programs are likely to result in the most productive and skilled employees leaving the organization. Besides, the layoffs can damage the workforce morale and even hurt the reputation of the firm as the employer (Bureau of Labor Statistics, 2018). Failure to fill the open slots is likely to leave major positions within the organization either understaffed or vacant. The action plans are required to address the persistent employee surplus that involves steering employees, hiring freezes, and reassignments to reduce the possibility of future layoffs.

Chern’s flagship store at 140 full-time sales associates

Chern’s is experiencing a likely and high unnecessary deficit in the full-time sales associate’s levels. Chern’s is required to assess this soon as possible to be able to retain its competitive edge in the flagship store. In reference to the matrix above, Chern’s is required to hire about 60 employees in case it desires to fulfill the goal of staffing about 140 full-time employees within its flagship store. Besides, Chern’s is required to have at least 1778 applicants in case it intends to recruit the number of the total hires required to overcome the deficit. This calculation was based on the data gathered during the previous recruiting efforts for Chern’s.

Hires= 15% of 80= 60

Offers=15% of 534= 80

Candidates=30% of 1778=534


Looking at the past staffing yields for Chern’s is one of the best ways to establish the number. That is the proportion of the applicants that moves from one stage to another of the hiring process. Besides, the selection ratios or the hiring yields are the percentages of the applicants that would ultimately be hired. The Chern’s previous hiring and staffing yields have been summarized and demonstrated in the chart below. It is evident that the shortage of full-time employee’s sales associates is most likely to be temporary. The reason for this conclusion is based on the employment changes that are expected to take place now and within ten years within a state where the flagship store has been located to match the employment changes that will take place within the same period in the entire nation ("Retail Salespersons," 2018).

Anticipated shortages

Chern’s is required to take particular precautions when assessing the temporary shortage of talents. It is essential that hiring incentives in such cases last as long as the talent shortage and as high as the salaries cost the organization a lot of money in the entire new hires tenure within the company. Additionally, it is essential to recognize the concept that expensive recruiting techniques including the lowering of the hiring standards and search firms so that recruit’s methods could quickly drain the recruiting budget without resulting to an acceptable hire. Lowering the hiring standards reduces the quality of the firm workforce which could not necessarily be accepted either.

Chern’s contains other options that are likely to bring back the number of the workforce up to 140. The options include providing the hiring incentives including the retention and sign-on bonuses to be paid when the employee has successfully served the company for a particular period. The issue of retail salesperson fails to indicate that the temporary shortages could emerge persistent shortages as the general merchandise store will not grow fast but would also attract customers with preferences that change as the economy increases its frugality (US Department of Labor, 2018). The hiring of the retail salespeople is expected to reduce in most industries including the department stores that will experience a drop in the store locations. However, Chern’s is expected to grow and even open fifteen new stores in future, and the demographics could nevertheless cause some alarm.

In conclusion, there is the possibility of a shortage of workers that could last for several years based on the changes in the consumer preferences. Chern’s is required to reduce its demand for talents that are likely to be in short supply through increasing its use of technology and automation and reforming jobs so that only a few people with the desired talent are retained. Besides, Chern’s is likely to increase the supply of the qualifications required although it could not be as practical or a fast solution.


Bureau of Labor Statistics. (2018). Employment Situation SummaryBls.gov. Retrieved 6 February 2018, from https://www.bls.gov/news.release/empsit.nr0.htm

Phillips, J., & Gully, S. M. (2015). Strategic Staffing, Global Edition (3rd ed.). New Jersey: Pearson

Retail Salespersons. (2018). Bls.gov. Retrieved 6 February 2018, from https://www.bls.gov/oes/current/oes412031.htm

US Department of Labor. (2018). Retail SalespersonsCareeronestop.org. Retrieved 6 February 2018, from https://www.careeronestop.org/Toolkit/Careers/Occupations/occupation-profile.aspx?keyword=Retail%20Salespersons&onetcode=41203100&location=Illinois