HR

5 Forecasting and Planning

Outline

Strategic Workforce Planning at Black Hills Corporation The Workforce Planning Process

Forecasting a Finn's Labor Demand Seasonal Forecasts Interest Rate Forecasts

Currency Exchange Rate Forecasts

Competition-Based Forecasts Industry and Economic Forecasts

Legal Factors Other Factors

Internal Forecasting Tools

Forecasting a Finn's Labor Supply Forecasting the Internal Labor Market Forecasting the External Labor Market Develop Your Skills: Sources of Labor Market Information

Resolving the Gaps between the Firm's Labor Supply and Labor Demand Dealing with a Temporary Talent Shortage

Dealing with a Persistent Talent Shortage

Dealing with a Temporary Employee Surplus

Dealing with a Persistent Employee Surplus

Staffing Planning How Many People Should Be Recruited?

What Resources Are Needed? How Much Time Will It Take to Hire the Employees?

Strategic Workforce Planning at Black Hills Corporation

Summary

LEARNING OBJECTIVES After studying this chapter, you should be able to:

a Describe the workforce planning process. II Discuss how an organization can predict its future business activity.

■ Describe how an organization can forecast its demand for workers.

■ Explain how to forecast the likely supply of available workers from inside and outside the firm.

■ Disc uss how to develop action plans to address gaps between la bor supply and labor demand.

• Describe the staffing planning process.

115

116 Ch 5 Fon,•a..fot1n~ unJ Pl.inmn!! ••r•« • at Black Hills Corporation i W

orkforce Planning Strateg c . :,-bJ,CJ energy conglomcrale Ulack 111ll s Corpom1i un einploys

1 !JO- rar-olJ 5.,.,,h D,tl.o< IJ I The co mplny kno" s that accurate work fore l'l>ro,., :dy 2.:ioo rmpio)c<> ?round ,~, e~blrnt 1, th:tl the n-cmgc age of It; Hne und opcro':1~lann1n11i mu.-.! to ,is ru1un: ,rrccu-rn<SS- ~ from ~510 50 aflcr a rc,:cnl ncquis 111on. \Vilh close n, ~- ~111, ~ J other ~c) rmpt,,)ccs inert~ within se ven years, the comp:1ny recognizes that 1:0• ~ c,( us \u,xL.fl)f'C'C m>"" eligible 10 rcu~dc s :md cftx·iric power with minimal disruptions 2 may ha\,

bl 1on1opro"1 cga . . . trOUblc mcct1ng ti.) o igJ I

me ho"' many cm plo)CCS will retire 111 a year, l~c types of to.Jent Biacl Hi ll< nc«Js todctcrm h' "ill come from. und how much 1rnln1ng new hire ""'1r.! •· these new ,n:s • ' "'Ill 10 rrplJCC them. "'~"' The company's ultimate goal IS 10 find and recruit qualified °"'I to safdy w um< ihctr new Jobs. I h' 1he orgonizntion ns quickly as posslhlc, and rctnin the' T~ ~ proJucuvc w t in · . . m, o~--cn,un: they ~ - omr .,. gro"th SlrJlrgy. Black Hills asks lor your advi ce abou ""I' ;l!IJn:,bk ond c,,cutr lw I ho,, . 11, bus,nrss ,u fl adi ng this chapter. you , hould have some good ideas 10 h I ..:an ITIC'CI its staffing goab. A er re s arc IQ the cumpJO)

. h Id h pen 10 0 manufacturing company 1ha1 did nol manage ilS supply , •.. Imagine " al wou ap . r . c,..,. effccuve ly. What ifit failed 10 acquire an oppropnatc nu mbe~ o quultty p~trts ror what ii makes, bl I Cc n, n, once it ran out from any supplier tt could find . As unrealistic 11 ,L. scram ,ng 10 rep o ,- - . .. . , . ""

th. pproach ,s not unit kc the one many organ,zattons lake 10 managmg their supp1 mayscc m, IS O , , $ ' . 1

, , , , , ) of tnlent. Strategic staffing ,s a proacu ve process. 1m1 ar lo JUSl- m-'.1111e supply cham 111~ mcnl, it mvolves managi ng a company's talent ~upply 10 ensure 1ha1 11 alwn_ys has enough oflltt nght people in lhc righ1 jobs al the right Lime. O1I and gas p~oduccr ~nd d1stnbu1or Saudi Namco uses workforce plann ing 10 more oecurn1cly proJect ru1ure Job req uirements. manage its comin retirement wave, and uti li ze contrJctors most stratcgicall y.

3 1 The first fo ur chapters or this book described the starling context und job analysis. Li

th is p,1r1 or 1he book, we wi ll di scuss planning, sourcing, and recruiting. Workforce plannin& the subject or this chapter, is esse ntial 10 strategic starling because it ide ntifies and addru.1e1 fu1ure challenges 10 a linn's ability 10 get the right talent in place at the ri ght time. Aequiru,1 and retaining the ta lent necessary to exec ute company strategics and initiatives is ortcn a chil, lengc. A 2012 su~cy of over 1,200 CEOs , aid that they were forced to delay or cancel nstn11cgi, initiative and approximately 30 percent said that they could not effectively innovate or pursue a market opponunity due 10 talent constraints.'

S1aJ'ling creates the infrastructure for the /inn's strategy execution, and proac tive \\orkfortt and staJ'ling planning cnsun:s that tl1e lim1 has the people it need~ to execulc 1hat s trategy 1u~ foll y.

5 When FM Facility Maintenance found that new accoun1 managers were having n tough ume

adj usting, negatively affecting the customer experience, 1hc company started hiring new nccoom m311agcrs about 120 croys before they were needed. This gave the m plenty or time to 1hltdo• : acc.oum manager and learn the company culture before gelling started o n their own.6 Wltn . pple 5 adJUSlment to its slllrling fonnula for its stores resulted in severnl weeks of under-toffing 11 made headlines and resulted in leadership telling employees that the company "messed up "1

S_iarli?g c_xpcns and managers widely prcd icl tha1 organi t ations will face n chnllcng,ng labor s11ua11on m the comin b b . . . . I . g years as a y boomcrs rc11re and devclopmg eountncs cipcn ence o• er btnh rates The B r . · II . be · ureau o Labor Sta11s1ics prcdie1s th·,1 70 millio n Amerteans • 1 retire I• cen 20 IO nnd 2020 I ·1 ' ' kc age group or I w

11 c only 40 million will enter the workforce. By 2020, D ) by 73 cmp oyees, age

25 10 44, wi ll fo ll by 3 pcrce n1 while !hose age 55 to 64 will gro• percent and those 65 and old ·11 · lolw iss ue- by 2050 Ch . er w, grow by 54 percenl. The aging workforce ts n g ., · tna 1s expected to h · I n:11 " the world combined. ave more people over the age of 65 than will tic The agi ng workforce wi ll affcc . b . . /ll a result, some organ,.w,·,o . h tJo 5 rangmg from the entry leve l 10 the cxecu11 vc suit< ns rn1g I have to I b · · if iht) arc unable 10 staff th · . sen e ack or pass up ex pansio n opportun1ucs lh . . Ctr compani es. For ex . . . 'I htlt c workers II needs 1o cxecut .

1 bo . aniple, a manufactu ri ng orga mzal1on thnt cnn

1 strategy-say, by adopting sloe Its a r-m1en1ivc stra tegy might be forced to change its bultn~. 1 b I bo , lier growth g I odU<•" Ya a r ,orcc with more rcad,'l . oa s or manufactu ri n,, 11 roducts that can be pr •n c · Y ava1labl k'I " · ,csll quipmc ni automating the manur . e s I ls. Alternaii vely, the fi rm mighl need IO 1111 aciunng processes to reduce i1s need for s ki lled worker;.

Chapter 5 • Forecasting :rn<J Planning

The competition fo r good em ployees is particularly fierce for smaller companies, who, espite providing the m~jori ty of ne,~ jobs in the United States,8 have a more difficult time hir-

d general. Forccastt ng and planmng let !inns hctter manage 1alcn1 shortages and surpluses. ,ng ,nider>tnnding business cycles, the busi ness needs of lheir fim1s, the current talent in the ir By "' and 1he pipelines for linding ruture talent, HR prorcssionals can proactively reduce the r,nns. . . f

1 .

1 the greater compe11tton or tu ent will have. ,n,pac Workforce planning is a strategic process that allows an organization to prediel and man-

'ts talent supply and demand. The goal or this process is to enable the organization to attain •~\'usiness goals and execute its strategy. Because business leader inpul is as important as HR '.1' 1 workforce planning is an organizational initiative, not something solely done by HR. ,npu ' Despite 1he clear advantages or forecasting and planning, many organi,ations respond to heir stafling needs reactively rather than proac1ively. In other words, 1hey do little planning and 1

ipl y work to Iii! positions as they open up. Jim Robbins, the former president and CEO or Cox t 111rnunications, put ii this way: "\Ve spend four months per year on the budget process, but we

h:dly spend any time talking about our talent, our strengths and how to leverage them, our talent eds and how 10 build them . Everyone is held accountnblc for their budget. But no one is held

:~countable for the strength or their talent pool. Isn't it the talent we have in each uni I tha1 drives our results'! Aren' t we missing somcthing?"9

At Corning. a leader in specialty glass and ceramics, talent planning is the "bridge that ir,nslates business strategy inlo talent stratcg y." 1° Coming knows that its talent portfolio inOu- cnces its success. Over- or understaffed units affect the company's cost structure, cash !low, and ability to deliver its products. The wrong skill mix can mean missed market opportunities ir the workforce is underskilled or, ir the workforce is overskillcd, cost structures that undc nninc profitabili ty. To keep its skill mix optimized, every spring Coming models its fotu re talent needs ac ross multiple scenarios and then analy,es strategics to close any gaps.11

Jn this chapter, we discuss lhc importance of understanding the organization's business strategy. goals, and competitive environment to idcntiry what talcnlS 1he fi nn will need. Ensuring that the right people arc in place at the righ t time requires forecasti ng the !inn's labor demand and maintaining an aw:treness of the rele vant pipelines for its labor supply. Action plans can then be developed to address any gaps between the two. Arter reading this cha pter, you will have a good understanding or the workforce forecasting and planning process.

THE WORKFORCE PLANNING PROCESS The \\ Orkforce plan ning process. which is illustrated in Figure 5- 1. typically includes the follow• ing live steps:

I. /1ie11tify the firm '.1 business strattgy. A !inn' s strategic vision, mission, and strategy affect its current and futu re stal'ling requi rements by inOucncing the types an ti numbers of employees needed.

2. 1\rticulate tire firm 's talent p/1i/osophy am/ strategic s1afji11g decisio11s. As you learned in Chapter 2. !inn s differ in their commitment to thing, like promoting workers, retai ning workers, and their prcrercnccs for hiring people with certain ,kills or training them after they arc hired. Because these foctors inOucncc the nature or the linn's ruturc labor supply anti the type or workers it will need, they arc important to understand whe n forecasting and planning.

3. Cu11duct a workforce analysis. l"orccas t both lahor demand and labor supply and idcn- 1iry any gaps hc twccn the two.

4. Develop a11d implement action p/a11s. Develop action plans 10 addr~s, any ~ops bctwce_n lahor demand and lahor sup ply forecas ts . 1l1c plans should be conm _tcnt wtth '.he finn s talent philosophy, and con include both short- and long-term rccruttmg, rete ntio n, com- pensation, succession managcmenl, and traini ng and development plans. For example, addressing the issues related 1o an aging workforce or n wo'.kforce with man y employees who arc roughl y the same age might require longcr-tcm1 ac uon plu~s. . .

S. Motritor, ei,almlle, a,rtl revise the f orecasts autl actilJu pla11s. Ev~luutc ho_w crl ccll: c the fi rm' s workforce plan has been in terms of meet ing the company s rccr~1 tmg and hir- ing goals. As ihc business envi ronment changes, tltc. linn' s forccn,ts and oct,on plan, may need to chongc, 100 .

117

118 Oupu,- 5 • fom_-:;i....uns; ltlJ Pl.111rung

--r-. ~--,A-,-t-7,-.,-,-o=-,-,.-,-,,., 7 for U,bor

_\\ hh:h Job:>\\III the firm n~-1."J ' - \\ h.111.-ompch:MClC'S Joe~ ~C'

busmo:t ,trB1~·~ '""~ui~ Jdt'1tn'/J· dtr n, .. ·s Tlllr 111 Plrilosop}aJ'

tutdSn-augi~ Staffi11g Goals

- \\ "hJI IS the lirm':, C\ f"-"C"l~-J k \ d ofbus1m."-.\ uc-11 , i~

~ - Hu\\ nun) ,, orlcrs arc nL'C'Jed"

~ ,--ar«a.st tht' Supply of Lubur

811.sintsS SrNrra A 1VUJablr in tht' ,1/urlta

- \\ 'hrch compc1cnc10. arc a,:111:ibk., - \ \ 111 the lirm ~ able to find tho~·

rompct.:nc1cs in1emall~ or e,tcm:111~ ,, - llo,, mM' c.,1c:mal ,,orlcrs possess ~sc oompcu.-nc1c.-<'

Jdrnti/)' Caps (ProJC( lcd labor

:,u rpl uses or shon:igc, )

Dt1·,•lop Actio 11

Plun(s) to A ddress

llrl' Forrca3-1rd Tulrnl Gap~·

M onitor Eva/ua1~

Qnd Rn,/s~ th,

F orttOJJs 1111dAcrlo,.

Plans

AGURE S-1 The Work.force Planning Pro<ess

Forcc:liung 15 not an cxnct sc ience. anJ 11 ,~ rare fo r a fo recast to be e xac tly nghL Gi,ea Ltus um.-c rtarnty, 11 15 U!!Ually ~ !ii 10 construct cs11111a1c~ as 3 rw~ge-:--":llh low, probable, 11d high e.sumaie.s-and then n.'Ca1cul,:uc th~~ .c.sumatcs ~s the organJLa llon ~ in1cmal and cx1ema1 em aronme nlS change. aJong y,11.h the linn s assumpti ons about ~IS ~vorkforcc needs. Cl'Cabng :rnd ,mplcmentmg " orkforcc plans 1s eas ier m more stable organiza ll o ns and more challcngin \\hen a company faces rapidly changmg cond1uons. With that said, the ~ rms experiencing~ chan!!CS wi ll find pl .lllnmg the ":!;SI \'aluable beca use II ca n guide the ar recru iting and hlflll ucuons m the face of unccnrunty. -

1nc ume frame for wor..,fo rcc pl:mmng ~hould reflect the leng th of the bus iness planolD& C)cle. Shon -1crm '-' Ork.force plannmg 1m oh cs plannin g sourc ing. rec ruiting , de velopment, am ~pJr.J uon ac m'tUes the firm needs lo do m the coming )·Car. By contrast. lo ng-1cnn workfom- plannmg m,,olves doing I.he same acU\' 1Ues but fo r a mu luycar pcricxJ. 13

At the ,cry lcas1. \\Orkforce planning should be done for those postt1 ons throughout tfJ1: organuauon "hose cxccuuon 1s considered cri 1ical fo r the success o f the ir units and the finn 15 a "hole. lf mno"auon and m1ang1ble assets, such as kn ov.lcdgc or crea l1 vity. ge ne rate a fllffl's comp,,uuve ad1 omoge, then lop manager.; and kno" ledge ll'Orkers arc csscn1iul. If an organllJ- uon·s compcUU\e advan1age ts based on scn·1ce, illi succc~s depend s on the q uality and pc:rfcr- mJ.nce of us cus1omcr-facmg emplO) Cc.'S 1" The accurate 1c.JcnL1ficat1 on o f 1hcsc key pos1uons IS extreme ly important, as their being ,acant or poorly staffed ca n a ffec t 1hc o rg anization 's ab1hl) to perform CnLicaJ Jobs and role s can occ ur al any organ1Lat1onal Jc, e l. For example, tluoL about " hat the mos t cnucaJ Jobs m1gh1 be 1n a hote l. You might have tho ught of the manager,<r C\c n the fro ni desk staff " ho set 1hr tone for gucs1s· experience~. Jn fac L. repeat business m ~ hotel industry is dn vcn more by room cleanhncss than by gucsl'i' interactio ns with fron1 desk suff. making the housckecpmg staff criucaJ for creatmg a compc1111 vc J dvantagc.15 Posmons11 ~ hi~h top performers sigmlican1ly ou1pc rform a, cragc pcrfo nnen, can al so be importanl for• lmn 5 workforce plannmg. Ensunng that the most c ffcl' II \C and producti ve peopl e polistblcatt placed m10 these p<>S! Uons can posmvely affect a company's bo1tom li ne.

Next, ~c discuss how an organ1za110n ca n forcca:)t 1hc fut ure dema nd for its prcxlucts and ~en ices, wh,ch, m 1um. will affect !IS demand fo r labor.

FORECASTING A FIRM' S LABOR DEMAND

An organiauon's produc1 demand d I ·r . ~ mzation

15 c.v.... . ircci Y al,cc1s its need for labor. On the o ne hand. 1r an °•:i-

,,_. nencmg gro" mg demand fa h d . crca..~ the au1omalion of

15 f r \I, a1 11 ocs or makes . unlc ~s ii p lans 10 m

the increased de i dm;nu ac1urmg processes, ii will probably need 10 hire mo re people 10 mctt man . \CO if the orgamLall on docs pl.in lo ~uuo mate . the process of doing so is

Ch.apter S • Forecasting and Planning

li~cly 1o 1ncrca,e the fim 1'_s de mand for people wilh different f)pes o f ialcnt- people able to use

and maintain the_ ne ~v mac hinery or le~hnology, for c_xample . On 1he o the r hand, ir the demand for thC org:1n1Lat1o n ~ products ?r serv1~es 1s <lccrcasrng. the co mpany's need for employees 1s h~cly 10 fall , perhaps 10 the pom1 tha1 11 m.·eds to downs11c, or Joy off, employees. \Vhcn 1hc d,•n1,1nJ for goods wcakcris dun n.g recessio ns, many em ployers downsiLc their work fo rces .

j\ccura1cly forccas 11ng b usrncss ac11v11y req uires 1dent1fying key husincss al·Uvlly foc1or!,. i&.:nuf)i ng qual11y sou.recs o ( relevant forecas ting in fonna1ion for 1hosc fac tors. and uuli zi ng iticse sources to compile co mplclc, accurat e, and tim ely da1a. For example. Con-way Fre ight compiles monthly forccas~s o f customer demand , produc 1i v1ty goals, and schedu led and unschcd - uti:-d absences 10 pro1ect h'.nng needs one 10 three months in advancc.16 1111s enhances Con~way' s n'<'n.uicrs· ab1hly to recrui t and onboard the needed dn"ers. " hich can take one 10 three months.

1nc umc frnme fo r a business acti vity forecast is at th e di scretion of lhc o rgan1 La 11 on. It 013y make se nse for organi£allo ns tn re lative ly stable, pred ic table environments to make (i\'C•)car or e,cn 10-) ellr forecasts . Organ1 Lat1o ns in more dynamic. unprcdic.-Lablc en vi ron- ments nrny have great difficulty ma.king reaso nabl y accurate bu siness foreca.s ts fo r periods greater than 6 to 12 months o ut. Forecasts arc best treated as dynamic estimate s. and should be revisited and updated regularl y as ass umptions and c nv1ronmcnrnl cond itio ns c hang..:: . Construcli ng short· . mid-, and long-range e stimate s 1s also useful because long-range forecasts :ire ltkcly to be less accurate tha n short-range es timates due 10 the in cre ased like li hood of envi- ronmental and o rganu.a tional changes in the long te nn .

There arc many cx.tcrnaJ source s of infonnau on tinns can tap into 10 fo rcc~ t 1hc demand for their products. Ne xt, we will discuss fi ve of the mos1 common types o f infom1atio n that can be used 10 evalu ate general bus iness trends in Lhc econo my: seasonal factors. mtcrcsl rates , cur- rency exchange rates. competitive changes , and industry and econ omic forcca.s1s .

Seasonal Forecasts

For some organ1 1..ations. business dcm::mds arc ~ea.!ional and pred ic table. For examp le. United Parcel Service experiences a sharp increase 1n shipping volu me from No, ember 10 January every ,car due 10 holiday shipping demand. Landscaping finns know that 1hcy will need more \\ Ork - ~~ m the sprang and summer lhan in the winter. Becau'ie thi s increased seasonal de mand occ ur~ C\CI)' ) Car. 1t can be nnuci pa1cd. For many organ1 tauons. business c ycles nn: much lcs.!i prcd1i..:1- abk Occ~ ional spikes and dips in the de mand fo r an organ1za1ioo·s prod uc1s or se rvice~ can be harder 10 forccasl, bu1 the belie r an orga nizati on can an11c 1pa1c 1he m. 1hc bc11cr i1 wi ll be able to have an nppropnate " orkforce m place as nccd~d.

Interest Rate Fo recasts

ln1crc !,1 rnte forccasls can proj ect the lt.,_ch hood 1hat the organ11a11on will need or be able 10 bu1IJ new plants and increase prod ucuo n m 1he near fu1ure . Higher in1eres1 rates di,;;couragc capunl IR\estmcnt by making ii more cxpcnsi\c for organizauono:: to borrow mo ney 10 fund th earcxpan• ~ion plans Higher inlcre~ t nuc s make it more cx.pcns1,c for consumers to borrow money as well. As a result. product demand tends to decline \\hen mle reM rates rio::c. By con1r:u.l, whe n in tcrcs1 ra1cs foll , product demand rises. Rising m1ereo::1 rate~ generally suggc sl 1ha1 the demand fo r labor " Ill fall. "hcreali falling 101ercs1 rates gene rally sugge~I that the dcmnnd for labor will rise For example, \\ hen interest rates fa ll , the llemand for homes lends 10 rncrca.sc. mcrca'.)mg 1hc dema nd for skil led 1rndc workers and mortgage spcc1nli'-I~

Currency Exchange Rate Forecasts

For many com panies. cspcc1ally global one,. exchange r:uc lorcc~h arc use ful for forcca,1mg bus1 ncv,; ac11v1ty. If a country's currency 1c. stre ngthen ing again ,;,1 01hcr currenc ies. II mcano:: that one um t or the coun t.ry' s curre ncy lr.tnslatc!, into grcalcr amounh of the foreign currency th an v. hen lhl! cc'luntry's currency was " cakcr Th is mea n, thJL Lhc countr)' ' s compa ni es can unpon goo<l-, and materials more cheaply hccuusc one unit of the domc'illC currency huy;;; mOrl' for~1gn goods 1h:rn II u~cd 10. However, this olso means 1ha1 country ·;;; produc t"' arc mon.· cx rcn~1\C o,cr~c:ts. For example. " ·hen the Ne w Zealand dollar .!>Lrcngthencd agmmt the U.S. do ll ar. fa i..:k Link:,, , a New Zealand beef jerky maker, was forced 10 cut t\\o-thfr<ls o f its ,-. or.., forcc becnu,;,c ii

119

- 120 Our< , • f<,m."i"11\$ ;inJ Pl.wuni U S cu, iomcr 10 huy ot, Jcrk) from BraziJ.17 L lt

:< • ch<Jr,:r for the com(\ln) ., h1gi:c,1s in1cmauonall) . a ,1rcng1hcning U.S. dollar'~ """

111 "'5 ,-omJ>ln) d,-c, • lot of bu<tn<Sd for ,h< r,nn·, produ<1, and 10\,cr labor de . ~ 11 • u,

10 10,.., ,n1<mauonJI J,man h n 3 counlf) ·s currency v.cokcns~ As a llllad lar tr.in' J IC') IR hJ ni'."n~ " C' COunr-. , fi \

,~- , do )OU ,ur ro-< p, - poncd oood< fall 11,e in1cma11onal demo.a -1, I lhc inn ''"' c of 11~ c, " ··-uu or,1,,. cum:n<v "c:,l,en,. th< rcla111c pn< > do<S the counll)''S demand for labor. Exchange '1ltt ..

·._ roducb n~·, as II rc,ult. ll5 ,cnn The more stJ.blc lhc exchange rate lhc "'- counUY > P J n 1he long • "'ari l,c , ol; uk and d,fficuh 10 p~ ,c, ' demand and laoor forcca>h will be. a<eW1l" and u.-cful the fim> , p,.,ducl

. . aased forecasts Competition- ,er.. ",II hJ' c grca1er product cho,ccs, "h·""

ndu)lf) cu)lOn F '" • I f new c:om~u100 cn1cr Jn 1 • an) ' s products or sen 1cc) or example. 10 lhc 1 d for an) onccomp ,. ICt 1<nJ 10 dilu1< the dcman •~:iJ.ers man) U S. cwma.crs, including a~1 f , m fo reign Cw,., • • llj of increased compcuuon ro Jcniand for their producb and downs11ed lhc,r • .,. cd dcchn1ng •w, o 31mltrChl" :tk r. c,rcncnc arli:ct then ,ts ) Uf\l\lnS comp,c111ors might ClJ>Crlcac:t torc-cs Ahc~au,cly. ,r a finn lca\e, am .

. ..,. -= •uc1> or ' "" ,ccs. greater demand fo r u~ir P' .,...

Industry and Economic Forecasts . ~ rcca>l is hkely 10 d1lfcr for different comparucs 111d

The infonnouon rclc1 an• 10 m:wng 0

8 ° •d s 1,ultx 0 r uadmq Indicators. a commonly •• J n, c onftrtllrt oa, , ' ' -.

JJITcrcnl uidustncs. ' thn:• 10 six months. prc,cn1, a rclauvcly broad ..,__ f me acu,11y o,cr "" . Y""•t barom<1cr O econ0t the ind<, can help ,denufy u-cnds leading 10 cconom,e rccruioos

111 of the economy As such. Board Consumtr Confidtnet Ind,_, measures ....,.,_ ~ . 1hl) Conftrtnc, . - ---, rt<'O\Cnes. • •~ mon nd ,s qucsuons aboul their pcrcepuons of 1hcir Job ._-, scnum_en1 b) a,king suneyo:c,po Th~: ,ndC\ also can help predict fu1urc ccononuc ocu, ,iy aid and ,.,dhngncss 10 speod m. Y ccs and assocl31Cd labor needs.

d d I a company s produelS or s,rv, thus eman or d 1 - ,nciudc !!TOSS domc,uc produc1 (GDP), 1hc business'"'"' Addiuonal economic in ica o,,. ...

d I

rauo 1r.1c~cd by the o.,p:inmcnl of Commerce. and the _Purchasing Manal"I ,ones an sa es thl b lh 1n,u1u1c for Supply Managcmcn1 Di,appoinling corpora1cc11111DI! lndc. ,ssucd mon y y c . d I d d f

f r, · ncus10mcrscanabo ~ugge,ta cc 1mng emnn orns~ prcannounccmcnts rom a ,rm s 0 ~

ucis. Industnes often lu,e their 0110 forrcasis a, 11cll The Nouo nal Rc s1auran1 Assoc111wa·, annU.11 induslf)' forcca>I ,s one "ample An orgam,auon can anal y, c :is p~I _product dcmat ",th rrgard 10 these inJ,calor< 1o ,denllf) "h1ch one s 1cndcd lo accuralc_ly prcd1c1 changes 11 1 bu<incss acuvuy, and !hen use thal ,nfonno11on 10 forrcJ<l 1he company < fu1ure labor elem.ad.

Legal Factors

Ne" lcg,slauon can al so influence labor demand. The cmplO)Cf hcahh insurance mand.llc & the 2010 Paueni Pro1ecuon & Affordable Care Ac1. also called Ohomucarc, requires cmplo)m with a1 lcasl 50 full -umc cmplO)CCS 10 pro11dc govcmmcnl-approvcd. affordnblc hcahh '""' ancc 10 ai least 95 percent of their employees and dependent, beginning m 2014. If ani ofihol< cmplo)CCS n:cmes go,cmmcnl heahh insurance subsidies, tho IRS will fine the emplo) crl'I' " S2,000 peremploiee. This II expected 10 affcc1 staffi ng models, paniculurly for scn;~cc J<~-~ boost the 1empol11f) siaffing indusll)I as emplo)cr< If) 10 stay under 50 employees. Cmp") may im pose stnel hmus on the durauon of l<mporary 11 orker a-,1gn111en1, or send Jobs OH'ru 10 J\Old bc:u,g affccled b) this law

Other Factors

Add111on:tl factor< can also md,caic changing demand for 1hc organi11111on', produCIS and _,. 'ices and the need for changes in 1he 1<0rkforcc Some other IJeior, 1ha1 oflcn cJu,e , omp,WCl 10 change the SIL< or their 11 orkfo rcc include

• An increase or decrease 1n consumer spend mg • An 1ncrca,c or decrease 1n lhc unemploymcn l role • An 1nmasc or dcma<c 1n the di<posablc mcomc o f consume"

Increased or decreased purchases of durable good, lnmascd or decreased housing purchases

Chapter 5 • Forc1..~ lmF, and Planning 121

M.111~ fim1"> ~tart hmng as soon as the cconotn)' bcgms expanding M> that new employ• l...:) " ' II ~ "ell tr.u ncd and produc11,,c hy the time the increased economic g ro"t.l' Gcncra1c~ ,~ rt"a..c-d bu~mcs~ :ic11, 1~) for 1hc fim1 Some mfonnatton the tinn needs to forcca~t 1h sole~ can t'tC ~,nerai~d m1crnall y J~or c,amplc. by lrnd,rng a firm·~ incoming orders, mamiscr~ can s et a n .i,; , t,oul .. ha1 the likely order ,olume "'II bc: ,n ~,e ne,1111on1h or quancr S1m1 larly . a com-

"' entering or c,1tms a particular lmc o l bu~mc,s "111 ~nu" that 1h labor need~ arc hlcl)· to ~ :a~~c accordingly l n 01her \\ onls, the fi rm \\ill generate 11s fort'caSI'- ba'-ed on 115 own rn1emal t,u,ine,s needs

Internal Forecasting Tools

,\ liml can also forcca,t 11\ lahor Jcmand. depending on the goals u has generated internally, "hich might mcluJc the following

• Ach1c, 1ng 1hc ,1arting le, els the finn nerds to grneratc 11 S" en nmount of re, cnuc "1Lh1n :i p,n1Cular penod of lime (e g .. h,nng enough <ale.people 10 gencrnlc $5 million in re, enue \ l uhin ~,x month~)

• lncrc~mg the iinn's starring le,cb 10 cxccutc a grov.th Mratcgy , Dccrca~mg the finn's ~talting lc\elli dunng a rc ~tructuring , Ob1au11ng the new 1nlcn1 the lirm needs 10 ercnte new products or provide different , erv1ces

To bc11cr si,e 1hcir sale~ force~ m each of their sale~ channel '-, companies. like \Vlurlpool. 1.·alculatc the m, e~tmcnl m human resources required to reach their optimum profit level 511mg anal) M"S and ~,ausucal model< can 1dcnl1fy if a company 1' ,ltghtl y o,crstaffcd in one area or ha, uniappcd po1cn11al ,n ann1hor h "a good idea lo 1denufy 1hc minimal as " ell as opumal siaffing lc\cls the fi m1 needs to mccl 11.s goah

The most 1mponant labor demand forecasts arc tho\c tor 1hc positions and sl1ll s that ,, 111 be cen1ral to the or~an11a110n·s rntem.Jcd ~1ratcg1c d1rcc11on For e,ample, assume nn organ11J- t,on 1~ e,pc:ncncmg slow gro1.\lh in II~ bricl s-and-monar foc 1h11e~, but ti 1s 101cndmg 10 roll uut 3 new Wcb-ba, cd m1uatl\e for ~el l mg ns producl hnc The finn 's labor forcca~t~ might ind1 ca1e that 1t3 o,cr:i.11 h1rmg wi ll stay rcla11vc ly nat H O\\CVCr, m light of the nc\\ ~1rateg1c 1mtrn11,c , 1he comJXiny obv1ou)ly will need cxpcncnccd IT spcc1ah~t.s, computer technician, . and so ftware Mlle~ It Mil abo need cu:?io tomcr SCf"ICC cmplo)'ces who u rc tcchnolog1cally compete nt. If 11 cannot lure 1hc-,c peo ple. lhcn the nc" Web-based m111a11,e i~ hlcl) 10 fail .

The re arc many 1.1.a) s 10 forecast labor dcmnnd. and ncx1. \\ C " 111 di sc us) four of lhc mo,1 common one, rn1 10 anal) '"· "'aucr plots. trend nnJl) !iolS, and Judgm ental forecasting

RATIO ANALYSIS The ,-u mJl<d IC\cl of busmc,s ac111H) of 1hc firm can be con,crted in lO ~ numhcr of cmplo) ~c, 1hc compan) will need 10 ntlain tlw, lc\CI of producll\ 1ty by U)mg pa.st ~taffin~ ratios A Mnlfi ng rJII0 1s a mathcmaucal \\a) ol c.1lculatrng the nu mber of employees a firm 11L' t:<l3 to prod uce certain lcHI~ of output. A fim1 l'nn then "index" the number of people 11 \ CC~) 10 cmplo) \\ 11h 1hc busmc,, melnc. For c,amplc, a law firm might index the number of J'l'lllcg, ls 10 the numhc r of anornc} S based on u , 1Jlli ng ro110 of 3 2. In other " ords. the fi rm nccJ, three p~1rnlcgal ') for C\-l"fY (\\0 attomq, ,\t Un11e<l PJn. cl Se rvice. CH~() 22 package~ 1hat u o')s 3 border ~uppon one Job m its package operati on 19

A rauo analys1" a,'lume') tha1 there 1, a rcl:1t1\dy fi,cJ rJll0 bcl\\CCn the numhcr o f rmplo)ccs needed nnd certom bus mcv•~ mcmc, u~mg h1,ton col pattern~ ,., Hhtn the fim1 help') to c, 13hl1sh a rca\onablc rnnp:c lor these ra110~ Of l'our:,c, the process can be U)ed for ei ther Ju, t,f) '"£ ne\\ plMl1on') or c.kmon~lrntmg Lhc need for la)offs

For cxampll.·. :bsummg that a manufoctunng fac1lll) ha(; 100 employee, Jntl produ ce, Sl0,000,()(k) of product annually, then 1hc fi rm·, proJuc1i,,n-lo-cmplo)CC rauo " $200,000. 1 For e, cry odd,11onal $200,000 of produ cl 1hc compl n) "·"'" lo produce, ii should hire on aud1- 11onl\ \\ Orkcr. lkcau~e , omc econonuc) of , cale \\ 111 rc, ull from the e;;..p~ins1on that \\ 111 r~dw,.L' lhc num ber of cmplO)CC > needed, organ 11a11on1 should con,idcr lhcir unique , 11u.111on and JUJU <I •heir forccas1, according!)

Other rJIIO') that can I~ u,~<l m c, 11 matmg 1.1q;et hc.u.kount lc, cls md udc

Re\Cn uc per emplO) l'C • ~! Jnogcr. 10 c mplo)e<'

STA H '/ ,\ 'G HAT/0

11 n1111/1 r,m,11eal IHI) H/ c 11/c ula tmx //11• rrumlJ'f'r of t'mpln, rr1 u firm nu,lt to pmdiia ctrrmri lt1tls of m,rpw,

122 Cluptcr 5 • fcm-:t.."1DS and PL1Ml0S • 1n,i:-n10f) k\Ch toe mplo)C'C')

SCA TTDI rwrs u sraplur dt.zJ ffl111o1 ~ ,..o d,ff,mu n1ndbk.J o.rr rrlarnJ

• Store"',~ 10 ~mplo~~t 1omcr orders to employees • Numtx'r of cu,tC\mer1 or CU.) -

11 roJucuon cost> I • Labor co.)ts 10 n P . f roducuon capacll) to cmp oyccs • ~ . n.-cnt3~C uuliauon o p

Th pc loicc-producto,lly rnuo to remain stable O><r ••· .,f'--cts 11s emp . th rod . • .. f01t-lf an organ,,auon c th past rntoo of employees to c p uct,v11y that'

e3:,un• pcnod, then "mply appl)od,ng cbe adequate. Ho"cver. tf the organization is ex~ • f the u~·oming pen can I Ir . • .. ..,. fo"'<a,,t<d or ;· , rcmplo) ec. due to 1cchno ogy. ain ,ng, res~ctunog, and IO

mg 3 ctungc ,n producu, 11> pc _ has th,s 15 ,nappropnate Managers will often ha,c GI. then the appllc:iuon ofpa,,t ratios sudc_ ted and their expertise should be incorporated 1'&\loit

n«J 10 be 3 JU> • Dtotb, ,den of how esumatcs f "h,ch n"t rauos do not exist. the onl y "•Y to gc

I o><l s11ua11on, or r- ' °"It proce» In ent,tt ) n I on the Judgment of the finm s managers. Although a ttnsonablc staffing forecast "d

10 n: \ labor demand at a time (labor hours per un11 ~

um tcd to one pre ictor o • -----~ Jnal)SCS an: , cd uusucal techniques such as a regression analysis can be "IOI for example), more ad, 30~,c:ors. For example, a regression analy sis that inco'J)()rates s.., to incorporate muluple P ff, and seasonal 1rends can be used to forecast the 0,,_,._., sues.. ma.II tra ic. -UU1CJ"" fon:cnsts. siorc rel3ll store. or course, the underlying data used to construct any 'ltlo,- cmployees needed '" • d bl 3Jld reliable. Qtherw1sc, the forecast will not be ICCUratc

anah s1:, mu:,I be ere i c . . rcgr,ssi on • c- d d'" small· and medium-me organ,za. t1ons can be more d,rr:-c

For,casung la<vr emJn d be th •mlll . trend, ,re t,~cly 10 be more variable an cause ere IS I_) ptcalty less i-.,

because hi>toncal fi h h to draw Add1uonally, adding one new person tn a 10..,mp,,__ t cal 1nforma11on rom " IC · h h '"I'< on d ,L. worHorce in 10 percent increments, "' ,c may no1 con,, .....

company means expan 1ng UK.: . ¥••-.-. to the orowth rate of the bus,ncss. Companies of all sizes onen prefer to h,re tcmpora,y or c,.

• ,. 1 1 the)' ,re sure they need the add1uonal employees. ungcnl 'wl-'Or,.:ers un .1

sCAmR ,LOTS Scatter plots show graph1cally how I\\O different vanablcs--say, ,.,_ and salesperson staffing (evcls--m ttlated. For the purposes of forecasti ng labor demand,sca ter plots help firms determine ,fa factor has historically been re lated to staffing leveb n,1 ,nformauon ,s then used to de1cm11ne what staffing levels ~hould be _chang_ed as the fq changes. llus 15 related 1o corrtlar,on coeffic,tllfs :ind regress,011 analys,s, which ore d1.scus.§td

,n Chapter 8 . Assume lhat new housing dc\ClopmenlS arc being built in the area served by Ambulm

Express. a pnvatc ambulance service. The company wanlS to forecn,_1 IIS future requ1ttmcnb r~ ambulance dmers and lno" s that the more people hving in IIS service area, the more dmm l will ne,,-d to meet the communuy·s needs. The staffin g expert first collects data from m otho, ambu!Jncc services 1n the state 10 learn thctr number of ambulance drivers as \\Cit ns the poruli uons in their service mas. Table 5-1 summan,es these numbe rs

Figure 5-2 sho"s these I\\0 sets of numbers graphically m a scalier plot. 1110 popul- sc"cd by the vanous ambulance services ,s indicated on the horizontal nxi,, and the corrc<pool- ing number of ambulJncc drivers employed by each of the companies is indicated on the,..,,_ cal am. Each po1n1 on the graph renecis one company. Notice that a nearly ,trnight hnc can N dra\ln bet"ccn lhe points, as "• ha1c done on the graph. Thi s lead, us to conclude th at thcrt" 1

~ The Population Served as It Relates to the ~ Required Number of Ambulance Drivers

Population Served

12,500

25,000

30,000

35,000

50,000

60,000

Number of Ambulance Drivers

2

6

10

11

Chap1cr 5 • Forccasung and Planning 123

12

10

§ 81 6 b 0 0 z

' 1

l 1

o,/ 10,000

1 i I

I i l

20,000 J0.000 ,o.ooo lO 000 Popu\:u1on Scn cd

__. 60,000 10,000

FIGURE 54 2 An Example of a Sutter Plot The Relationship between the Populatlon Served and tht Number of Ambulance Drivers

direct, If not perfect. rclat1on1r;hip hct\\ ccn the two foctors-1hat 1s, the number of people that can be " "cd 15 directly related to the number of ambulance dmcrs, Therefore. the hoc can be used to predict the d,ffercnt staffing levels needed lo sc"e the different populnuon level-. Ambulance Express anue,patcs sm ing 43,000 people w11l11n two year, Stan,ng on the homontal axis. "c loe•tcd the point that renccts-13,000 people and then drew a do11cd vcn,cal line o,cr to the sohd d1Jgonal hnc. From this point on the sohd diagonal hnc, we drew a dolled hori1.on1al hnc left to the ,crtical a.xis The staffing level at which th11r; honzontal hnc touches the ,cn1cal a.xii. 1s the csUm3tl'd number of ambul ance dnvcrs Ambulance Ex.prc~s will need . In th is example. sen IC· ,ng 43,000 people "ill require eight dm ers

TREN D ANALYSIS Trend analysis invOl\'CS looking ll past employment pallcms- thc ,mploycr',. the industry's. or e,cn the nation's pallcms, for c,amplc- and using those patterns 10 predict J fi nm's fut ure labor needs. for example, 1f a company has been gro" ing S percent annually forthc last eight ) Cars. It might nssumc tlut it ~ 111 c -.q,cricncc the same 5 percent annual gro"lh for the next rcw years In other words. any cmplO)mcnt trend~ likely to continue can~ useful ,n tcnns or fo recasting a finm' s futu re lahor demand

Figure 5-3 1llu,1rates J trend nnnl)m using a hypothcucal example of a hospital', number of nurses educated 1111cma t1on.1lly ,crsus domcsucally from 2006 ~,rough 2013 The trend lines ,ho.- that ~,e numbe r of domcst1cnlly cducntcd nurses has been ,11,ad,ly dechn ,n g. nnd the number of mlcm,t11onall y educated nurses has been stcnd1ly in creasing o,crthe last sc,cn years . If II had ~en tr.1d.ing thc,c trcmh, the hospnnl m1i;l11 ha,c decided to scale up 1t.s 1ntcmational rccru111ng cffon, in tune to m.rnagc thi1- tranc.nion ton more mtcmatmnally educated nursing force

Valero Ene rgy Corporation used h1>torical trend< to uccuratcl) fo recast 11> tale nt demand b) d1v111on and 111lc three years in advance. By pulling fi ve yea" of historical people records into a datJba,,e, the compan y de, el oped a scncs of mathematical algorithms used 10 do a trend analy- '" 111c analy," allo"cd the company to predict its tumo, er by location, posu,on type, salary . cmplo)cc tenure , and d1v1sion : o Although this c\Omplc sho" s that it can be done, trend analys" is rardy u,cd h) 11>clf 10 make labor demand lorccast, So man) factors can affect a compa ny's ,inffing need, , mcl u<lmg the finn ''- Cllmpct1t1on. ccononrn.· environme nt. and changes tn ho,\ lhc rom p.my gels 1b v. ork <lone (au1om:111on might 1mpr0\ c it, product1v1ty. for example), that the 111 eihod can be difficult 10 use alone

JUDGMENTA L FORECASTING ln , tcad of trying to 1<lcnll f) pa>l rclat1on,h1ps hct\\ccn ,1aff- mg kvcl1 and ,arious factor<; as \\ c did ,111h the prcv1ou, mc1hods, judgmcnllll rorccusting relics on the c,pcncncc and lll)l£ht s or pcopk in the organ11at1on to pn:-d1ct a firm ·.., ruturc rmplo)nicnt need,. A,king man:,gcr) and supcrv,,..e1r., about ,, hat they hchc,e ruturc ,1aff111g

TRt..VO AVAL l 'S / S

u1m8 pa.H rmrlo} mr,u partrr,u rv pr,d1c1 /uturt 11ud1

-

124 Oupc .. "f 5 • forc, . .1.\Ung :anJ Pluming

JLDGI/E.\TAL F0/1£CAST/\G

,,.1w,, °" dw arrn.,,., ONl1At11"1:J o( f"'f.f'l, UI tJv orJoJIU:;JUIOII t.l pr,JKt

ati.,M fjV!'.JnttJl/'W,intnl ttmh

100 I

0 Dorm:)11cally Cduc111cd

6 lntcrnat1omdl) Educated

FIGURE 5•3 Domes:t,catly ,nd Internatio nally

Educattd Nu,,., (200&- 2013)

and cmplo) « skill le,cl, can be ,s ,ery 1ns1gh1ful Managers arc o ften aware of \\hat IS l""I on '"the h,cs of their ,ubonhnatcs and may be able 10 provide rea,onably accurate PrcdlCIIOli of Ihm fu ture labor ,upply Lile" 1,e, m:tnagcrs are often •" arc o f the rcurcment ehgib,luy 11d ,ntenuon, of Ihm stalf and con use 1h15 1nforma11on 10 proJect likely tale nt losses sc,cr,J )QI

into the future . . . Judgmental fon:cru;ung can be rop-do1111, in "h1ch case the orgamzauon s leaden rtly 11

their «pencncc and ,no" ledge of their 1ndu,lf) and company to make predJc tions about ii, firm 's future staffing In d s n,"td, The esum•I <> the lop managers come up with lhrn bcca. ,l!lffing goals for 10,.cr-lc,cl managers 1n the orgonllallon In some cases, p~cularty •IQ compan,c, an: facine financ,al d1fficulues or resl/llctunng. budgets may detcnmnc the fint•, "headcounL" or nu,;;ber of cmplo)<CS Bouom-up Judgme ntal forccasii ng uses the U1pUI of lo" cr•lc\CI managers 10 csumatc the finn's 101al slaffi ng rcqu1rcmcnts. Each manager csttmat1 the aumb<r of emplo)<CS he or ,he needs 10 execute the finn' s >Lratcgy. The c,11ma1es aJCC<ll- sohdated and modified as they mo1e up the organ1La11on' s hierarchy lo the fim1 's lop ll1JWga!. wbo then fC\ICW and fom1a htc the estimate

Bccau.sc hmoncal trends and relauon;lups can chansc, 11 ,, u1ually bc,1 10 supple!llfnlll, mon: mechanical rauo. ,caner plot, and trend forecas ting methods " 1th managenal JUdgl!IIIL ll1e mochan1cal methods can be u,cd as a s1anmg pom110 male the csll motes, and then mwt er., can use lhcor Judgment 10 modi fy the es11ma1c<

RETURN ON INVESTMENT ANALYSIS I( IS possible 10 CSlllnate the return on in1esunent (Joa , addrng a nc "' position based on the costs an d ou tcome s re , ulu ng from that new hire The linl step 1s to assign dollar values to the bcncfl1s c~pcmd fro m a new hire for the period ofms most appropriate for die pos,uon and the organ11auon- 11 could be a month. a quarter, ora)a How much re,cnue dunng the penod ,.,11 be d1n:c1ly generated as a rcsuh of this posouon?llal much money per penod "'' " this posouon s31e the organ11auon 1n terms of increased cffici<"'7 and ho" much value "'II II add 1n greater producuvuy, qualll). or customer s,:rv1cc? The su,iul lhcsc figures ,s the , alue of ood1ng this posou on.

Nc,1. the costs lo a<hcrusc the po1111on. 1n1m 1cw and screen cand,dates, pay for tbcf Imel. and relocate. train, and compensate them 1s calculatcJ . Tius " the 11111,al in,esuneol iht company has nude'" the ne" hires, l\h1ch should then he d111dcd into the, aluc the ne" iw,(> bnngs 10 the compan) and muh1phed by 100 to dctcnninc the fim1·, pcrec ntagc return 00111 In\ cslrnent

For txtunple assume . r r «ll{Xl) · 3 ~lore s nc ...,, um1turc ,alcspco pl c 1•cncratc an 3\-Cr8£~ 0 JUU,

in profit their f,"1 )Car In dd th e ,,,nil! th fr,

· a •tion, c reduced "orkload on 1hc re,1 of the sales staff ,m, •• cir c 1c1cncy and ab 11 ~ .. ,., . 1 1 l to pro, ode l11gh -qual11y cu, 1orncr ,en 1cc b) 5 pcreenl. nus 11 •

an ouu1t1onal SI 5 000 10 the c · ~ D · ompany If the cu,1 of hm ng anJ trJmmg a new salc<p<

ChJplcr 5 • ForcC3.)ling and Planning 125

,,f"<"-d 10 be S7,000. and h1> or her salary 1s $25,000 before com n11,sions. the return on ,n,c-t· nocnt of honng an add1 11onal salesperson is prcd,ctcd to be 23-1 percent

100 X 1($(\(),000 + S 15.000)/($7,000 + $25,000)1 = S75,000/S32.000 = 234'K ROI

Co01p3n1cs can mcorpora1c other human resource da13 mto their models. depending o n ~h:JI they v.Jnt to forcca,t O1I company Saudi Aramco·~ \\Or Lforcc proJccllon~ include the ,<,q,orotc rcs~~n:c< required !o recruit, hire. and train new s13ff nnd to mentor employees dunng

1 t,c,r career~ • 3M pro, ides HS business leaders mfonnat1on about 1mpor1:1n1 trends, ttnd coun•

U)'·b) ·C0Untry com pan1-.on~?r s kills gaps. worl.Jorcc demographics. produc11v11y. and return on human ,.1p11JI ITI\'CSlmcnb -

~lany cmplO) Cf"S, partic ul arly rc1a1lc~. mistakenly 1rcat labor costs l'.b an easy target when '"'' cu111ng 1~ needed, rather than treating cmplo)'ccs and sufficient s1:iffing levels as an m,e~t- mcnt that conmtlutc~ directly 10 the company' s pcrfonnancc \ Vhen Home Depot tncd 10 boost profi t, by cumng staff and re ly mg more heavily on part·llmc I\ 0rlcl'>. cus tmncr sn11sfacuon and ,ales growth fell. S11nilarly, Walman's staff rcducuon efforts led 10 opcrnuonal problems includ- ing undcr~tockcd ,helves. which led to decreased sales Because Walman link~ the number or hours for ,\Inch manager., can ~ hcdulc employees 10 sales performance, declining sales con trig· ~er a sp1rn l of lov. cr s taffi ng lc vclii further customer ~crv1cc and ~ales decli ne,;;, und additional cub m " ork hours and headcount

FORECASTING A FIRM'S LABOR SUPPL V

S1r:11eg1c s1am ng requires finn s lo keep their fingers on the pul,c of their labor marlcts. Therefore. understanding current and future <kill and competency trends on the labor market is crucial. ln fonnauon about lhe number and quality of cmplo)ccs hlely 10 b< a»1lable 10 an organ11a11on " hen II needs them ~hould be considered \\h1lc the org:in11a11o n ts to 1hc process of fonnulaung 11< bu>1nc» strategy. For in>1ancc, a11cmp11ng to gro" a fiber optics finn by 20 per• ctnt a )C:3f m1~h1 not be possible 1f Lherc arcn' l a sufficient number of fiber opucs engineers and 1cchn1c1ans 1n the labor pool \\1llong 10 " ork for salanc, the finn "able 10 pa) . ll os ob\lously be-,t for an or~.1.011a11on (cspec1ally small fmns thal h3\'e a harder umc nu.racung cand1d:ncs) 10 have • reasonable csumale of lhe proJec1cd O\ao labol11y of talent for 11 s Ley pos111ons b<fo re dc1elop1ng a s trategy that depends on 1h1s talent pool. TI,c organiznuon' < 1111emal and external lnbor marl.ct,;; "''II mnucncc thc,c csumatcs We will d1~cu~s each one- nc,1

Forecasting the Internal Labor Market

To d..:1cm11nc the 111-.cly ~uppl) of a finn' s internal talent ::it a fu1 urc po1n1 m umc . subtract 1hc number of cmplii)cc~ the firm amicipates lo.) mg via promouons. demotions. Lran-,fer~. rc11rc- mcn11i. and rc.,1gnn11on1, from the number of cmplO)'CC" 111 Lhc pos111on at 1hc hcgrnn mg of Lh tr: lorccu, tml! pcrnxl. 1l1en add any anuc1patcd talent gains for lhc position from lrum,fcrs, promo• uon~. and demotion~ to the 101cmal labor su pply forecas t In 11gh1cr labor mark..-1~ when \V0rkc~ arc harJ~r 1(1 find, more rmpl0)Cc, 1han u:iual ma) lc:nc the organi1at1on to pursue other oppor• 1un111c , Fm er cmplo) cc~ may le°' c during looser labor markets " hen Jobs arc le" plcnu r ul

Anal)1mg u company\ demographic 1111, :md current tumO\cr ro1c~ can help man agers fon:cas1 ho" mJny current employees arc hkel) lo , 1111 he on the com pany' , I\Orkforcc al a g" cn forecas11ng date . An organwuion that expanded rapidly m the past may find that a par11cularly 1:u-gc cohort of cmplo) ccs ht red nl roughly the same lime I\ 111 be rcunng at about the <amc 111nc, for c, amplc Thi,. of cou~. will mean that the finn \\Ill ha,c 10 hire a large number of nc v. emplo)cc, In ri:placc 1hcm Given thctr better Lno" ledge of their ,uborJ,natc,. ~upcn 1~1ng man• ai;m ma) ,,1,0 be able to reasonably es11ma1e the pcn:cntngc or their current \\orHorcc likely l0 be "1 th 1hc: organi,auon at some spcc,ficd date m 1hc future Trans111on anal)si~. managcnal Judgment. 1.1lcn11n\ Cnlonc~. und rcplaccmcn1 chJrtS arc some or the mC'lhods that can be u~cd to lorrca,1 m1crn.1l tali:nt rc~ourccs, and \\Ill be c,p1J1ncd ne , t

TRANSITION ANALYSIS A c1uan111at11 e 1cchn14uc cJlkd a transition unal)sis (al<o called MJrLo\ ,IIIJ l),1,) 1, a '1mplc tc:dm1quc that can be u,ed to nnal)IC u firm ', mlernal labor mao ~ct, and rorcc3\I 11s mlcrnnl labor suppl ) Conducting a 1ran1111on anal) Sl~ cJ n also l1clp

TRA,\ 'SJT/0.V ,1 \',<LI SIS

a 11iu111ruu1or 1rchml/11r m rd t,, an,,h:r ,,.,,,."'11 I/JPt,1 ,,i.,d.,n m~t {11rt nnt 111renwl /ubt,r 1urph

I ~

I i I ~

J

I

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126 OIJrccr 5 • "'""'-a.,ung .inJ Pbnrun~ . G

FIGURE 5-4 The Tran~t1on Analysis Proc~s llluurated

I c:,ni,; qu«uons about their po1<n11al path, for promouon .~

hinng mlllagtl\ illlS•cr •Pl' 1 ~ .. If firm's up,111ng or do1>nsillng pbn,

Figun: 5-1 ,ho"s how u u:m>1uon analysts works. Managm, fi rst tdcntiry all of lht

post11ons in the company that feed employees 1n10 the target pos111 on >nd 10 which cmp~

,n the UJ'l!CI post11on tend 10 be promoted. demoted. or transferred Ideally, all of the empio,,..

cntcnng and lea, ing the iargelJob arc 113clcd so thal the uansiuon probabtltly mauu ts ISiet-,

r.itc as possible The «11s m the 1r.1n>111on probab11t1y ma1nx contai n the percentage of emJJloi.

cessuymg 10 the same Job. mo1tng 10 • d1ffcrcn1Job m the company, or ex Hing the coml'illy.

As a numcncal cmnple. as,umc 1ha1 ti 11 the beginning of 2014. and the company DOQk

10 forcc:1>t the hkcly number of customer"" 1cc reprcscnta111 cs us call center will have• lht

bcgtnntng of 1015 Table 5-2 sho• s the tr:lns111on probab1lt11es-tha1 tS, the ltkehhood of pccpic

sl.lytng in their current pos,1ton or movmg-for four JObs reflccllng three job levels 1n the orp. nuauon based on dJta from the onqcar pcnod from JanuaJ) I , 2013. 10 January I, 2014

Full- and p311-Umc c11>1omcr SC""e rcprescnU1111cs are at the entry level, supcrv1SOn1t

at the middle JOb le1 el, and managers are 31 the thml JOb level The last column 1dcnUftcs it

number of emplo) ees currently " orlo ng at each Job at the beginning or 2014. The lllllflllOII

probab1lt11es are 1n the third 10 sc1enth columns of the mw,x. Jnd reflect the probab1lt1y lhil■

cmplo)tt "ho begtns the )Car cmplo)cd ,n the Job 1Jen1tlied 10 the left wall be cmplo)ed 11lll,

JOb 1dcn111icd a1 the top of the column or ,..,II ha1c cxated the organ 11a11on by the end of the )Q The numbers on the diagonal (m bold ) n:flCCI the probab1lt1y 1h01 an employee who beg1ni20II

10 the Job named 10 the left will sttll be ,n thalJOb one ) car later.

A uans,11on probab1h1y ma1n, 1s presented in Table 5-2. Reading across the fil'II""'

1nd1ca1es that JO pcn:cnt of the cmployc~s "ho bestn 201 ~ as full-umc customer scrv1tt rqr,

scntaU1cs art hkcly 10 suit be worktng as cu,1omcr sm ,cc reprcscn1n111cs nt the beg1nnU1Jcl

2015 Ten pcn:cnt of the cmplO)CCs "ho began the )Car 1<orkang as n fu ll-time cuS1omers,r1ll't

reprcscnl.llt1e are hkcly 10 end the )Car "'ork,ng as a pan-umc customer service reprc1<nU111t

and IOpcrccnt arc l1lcl) 10 ha1t been promoted 10 supe""or. None of the employees beginatll

-=11:18} An Example of a Transition Probability Matrix Transition Probabilities (2013-2014) Current (20141

Job Category (1) Level (2) FTCSR (3) (%) PTCSR (4) (%) SUP (5) (%) Full-Time Customer Service

MGR(6)(%) Exit (7) (%) 40 10

Representauve (FTCSR) 10 0 40

Numborof Employeos (II

40()

Part• Time Customer Se~ ce 20 Representauve (PTCSR)

50 5 0 25 150

Superv,sor (SUP) 0

Manager (MGR) 85 5 5

0 0 0 65 35

75

20 --

Chapl<r 5 • Forccomng and Planning 127

thl: ,car a) o full •lllll~.cu,t~mcr servi ce rcprc)Cntall\C can be expected to be a nrnnagcr by the

,nd of 1he )Car, The E.,1 column reflce15 the percentage of employee, '" each job 1ha1 can

t..: ,,pcct«I to ha,c left the company by the end of the year. In 1h,s case, the 1umo,cr rate has

i«n JO percent among full-umc customer sc"1cc reprcscn1a111e,, 25 pen:cnl among part-time

1.u.stomcr ~ rv1cc rcprcscntali'vCS, S percent among supcn1s.ors, nnd 35 percent among managers.

wttcn n:aJ1ng ~,c table II IS helpful lo remember that for each ce ll the JOb 1den1tficd 31 the begtn -

nin~ of the row 1s the relevant starling posiuon (al the beginntn£ of the ume penod captured by

ah< 1111110 ,), anJ the Job 1dcn111ied at the IOfl of the column is " here cmploiccs end up at the end

of the umc penod captured by the mainx . n,e bo11om row of Table 5-3 sho" s the forcca,ted employees in each of the four jobs a1

the bcgtnning of 2015 The numbers in Table 5-3 come from muh1plymg the curre nt number of

,mplo)CCS 1n each Job by the uansi uon probab1h1y 1n the corrc,pond1ng cell in Table 5-2. For

«ample, n1uh1pl) 1ng the 400 current full-lime cu>1omcr service rcprcscn1a111c employees by

40 (JO percent) gives us an csumate of 160 of tho,c 400 employees bei ng in the same JOb al the

t,<ginnang of 2015 Muhipl)ing 400 by 10 ( 10 percent) 8"'' u, an cs11mn1e of 40 full -ume cus- tomer service n:pn:scn1a1tves becomi ng part-It me customer service rcprcscnlalll cs by 2015. and 40 being promoted 10 supervisor. None of the 400 arc expected 10 be promot<d 10 a manager's

pos1uon by 2015 (400 x 0). In the second row, muh1plyms the 150 pan-ume cu,1omer service

n,pn:scn1auvcs by .20 g11cs us an cs11ma1ed 30 sull in the same Job tn 2015, and multiplymg

150 by .50 g11 cs us nn e, 11ma1c of 75 of ~tcm becoming full-umc customer service reprcsenta-

u,es by 2015. Muhiplying 150 by 05 £11 CS us an c,umale of appro"mately c1gh1 of the pan-

umc customer ,crv1cc reprc,cntau, cs hcmg promoted 10 supervisor by 20 15, perhaps due 10 tlte

completion of a degree . The numbers in bold on the diagonal rcflec1 the number of people 1n

each Job 1n 20 14 expected 10 be 1n the samCJob at tl,c beginning 0( 2015 In the bouom row of

the Ulblc are the column , urns {in bold), "'h1ch rcprc,cnt the total number of people forcc:1>1Cd 10

hr 1n the JOb 1dcnufied at the lop of 1hc column 1n 2014. In this case. the company c,n expect 10

enter 2015 w11h 194 fu ll -umc customer service representatives, 115 pan -ume customer service

n:pn:scn1auvc,, 112 supervisors, and 17 manascrs, based on the uansiuon probab1ht1cs. A total

of207 emplo)cC> "'II ha, e left the orgun uauon Pn:d1c1cd shorl3£CS and surplu,c.s can be easily calculated by , ubtracung cu rrent cmplo)ce

coun1s from estimated employee counts. If lhe company expects to maintain its current staffi ng

1c,c1,. 11 " hkcly 10 ha,c to hire from outside the organwmon for three of the fou r pos,uons (206

fo ll-lime cu,1omcr service rcprcscnlativcs, 35 pan-umc customer Strv1cc rcprc!,cntatncs. and

three managers). For supervisors, however, the company can an11c1pa1C having 112 compared

10 11s current number of 75. nus sugge11S that II may be facing a surplus or 37 supervisors ,r the firm's mtcrnal mo,•cmcnlS and quit roles conlmuc. This could g11e the firm the opponun11y 10

c,pand because the company ,1111 ha\C n surplus of supervisors. Or ti could mean tha1 ahemauvc

promouon paths halC 10 be considered for them or that their promotion rates need 10 be reduced

tu pre, cnt the !!1Urplu,

iiwli it•• Forecasting Employees Using the Transition Probability Matrix Forecasted Employees for 201 S

Job Category (1 ) Level (2) FTCSR (3) PTCSR (4) SUP (5) MGR(6)

Full-T,me Customer Service 1 160 40 40 0 Rep,esentat,ve (FTCSR)

Part Time Customer Service 30 75 8 0 Repce,en1a1ove IPTCSR)

Supervisor (SUP) 2 0 64 4

Mar ager (MGR) 3 0 0 0 13

Forecast for 201 S 194 115 112 17

206 Def1t1t 3S Del1c11 37 Surplus 3 Defoc,1

Current (2014)

Number of Exit (7) Employees (8)

160 400

37 150

75

20

207

Exits

r ~

I I I

I

I

128 Clup.cT 5 • t-om.~ung i1nJ Pl.uuuni; th trJn,1uon prubab1huc, arc based on the mo,ements of •tn

TML\T /.\'I E.VTOIU£S

o fkrodrd rr, ord u r dmub.JM thdt .Jll1nn1,m.:t', t lM h ,,.,.,,tu,u , d,1/U , ompttt '1('lt' tutdy11al1f,( tJl/o,u

In th" <'amP1\ c but an meaningful penod con be used. Some organizau l'loit1ti ,,,, the )<Jr 2013 to -

0 14· 1

~ blc and ,<1 11 fo nd that 111.,,r tran,t11on probal, 1 Olis~ l!n\ ,ronmcnu lhJt an: rclJU\C 1

> ',hJi ~ ~asc more accurntc tmns1t1 o n analysis rcsu 1 1

111 es Ill}

I , t 0 \ "r UlllC' n \ ' ls ,... ..

n:IJu,c) ,on,1.111 ' fromcs Other organw111on, w,11 cxpcncncc nuc1 ... b,

obtJJncd b) lool ing 31 Ions•~, um,< diffocuh. to ,denufy re levant probab1ltucs. In such lltboas, J ~ n11J\Cmcnts thal ffl411o,C 1 I Clta

cmp O) cc I 's results arc hlely to come from transiuo.n probabihucs·;;:, Ill, ml"'-l accurn1c transiuon ana )

1 ""'-Oft.I oJ r a few months rather than o }Car or more. Because h' ~"

from rclJU\'cly ;hon JlC" • •• : Jo on mall numbers. 3 uans111on analysis ts most useful : ~ malt: accur.11c c!lum:ncs v.uo. ) 1

1<:f ~ cm lo crs. h i, IC>S cffccu, c for very small cmplo)e~ ~ anagers can lllso use their Jlld....._,

p > ·•· • · b I u • ··--d on say the company s gro,.th rote . In 1h1s case ••·v

0 -~

I0 :>dJU>l u~ pro.,_. I I C> ""- • ' ' ""', IOlild ,.-c:,Jcul31< the emplo)ec defocus and ,urplu,es up\\:url or downward by the percentage P'OI

h he bu " ••• toc ,pencrce For CAamplc. ,r the " orlforcc 1s expected 10 .,_ i

rate I e) C\P,.'CI I " -~ .. _ ...

10 percent then the required cmplo)CC levels for full· and par1-11me customer service re~

u, e, 1H>u ld be 440 and 165. n:specu1<ly Lile ••> fon,casu ng technique. a tran>1 11on anal) StS ha, some hm1uuions.2< Mutllplt

mo,c,-for e.amplc, a person being promoted '" ice '" the same penod-cannot be lleeoun1oi1 for. Thus. 11 ,s be,t 10 keep the umc interval used 10

calculate the trans111on probabihucs 10 nto

)Cars or lc.. If any reason can be ,denufocd for why p~t pancrns of c~ploycc movcrn,nij "11

chan~<. ,a,. due 10 an c,pcctcd pay incn:asc or surge in employee ret,rcmcnts, these upca. uons ,houlJ be factored 1010 the uan"11on probab1hucs. In some cases, p~t lrcnds w,11 001 "'•

accurate as man.tEcrs' csumalc) arc nus I) parucularly true 1f new s1rntcg1c dtrcction.s are~

cons,dcn:d. Also. ,r onl) a fe" people mo, cd into or out of a JOb the transiuon probabthl) Qli. mate might be un,1.1blc and su bJCCI 10 error. A uans111on anal) sis al so •~sumes that all cnipto,.

cc, ,n 3 JOb haic an equal prob3b1h1y of mo1emenl. \\h1c h of course, 1 sn t hkcly 10 be ihccasc.

Dcspt1c the hmiwmns "''e noted pre11011Sly. a ,ancty of organ11a1ions, includ,ngpot,c,

dcpanmenlS. rctJJI eompanic,. high-tech comp.1n tes. and the m1h1ary successfully use the l<Q.

n,quc to forccast their internal labor supply. Like budgcung, forccasung ts an imperfect SCl<IICl

Nonetheless. 11 ,s general!) u,cful andcena,nly far be11cr than doing nothing at all. Agwn, bec.ito,

of the unccruin ucs m,ohcd "1th forccas ung. cntcnng both conse" a111 c and optim1suc CSUmlis

10 produce a forccastcd range 1s hlcly 10 be more useful than lf)tng 10 p1npo,n1 an esumatt

The pnmary hm11.iuon of all forccasung techniques is that they rel y on histoncal p,ums

and a,:111 II) lc1cls. If the cn-,ronmcnt changes, past p.111crns may no longer hold. For cxampk.

1f the unemplo)mcnt rate" 1ncrcas1ng. cmpl0)CCS ma) be less l1lely 10 lcO\c the comp,n) Ila,

they " '"' ,n pre, 10us years "hen II was easier 10 fond another Job. On the other hand, dccms- ,ng unemployment rates m1gh1 1nd1ca1c other employment opponunilles exist and lead IQ a

,n=asc ,n the numb<r of employees qu11ung their Jobs. This may also make it harder for fni 10 attract sufficie nt numbers of qual1focd applicants. In this ca,c, changes ,n an orgaruWJ01·1

compcnsauon policy 10 offer above-market wages can help the forn, retai n its employees, lhercb)

1ncrea;1ng the organ1zauon's 1n1emal labor supply Lile" ,sc, ,f on organllallon 's rcqu1rcd c:o,r,.

pctcnc,cs chani,c. tis ab1h1y 10 meet us future starfong rcqu1rcmcn1s internally will be ham~

,f 11s current cmplO)CCS don't possess those competencies

TALENT INVENTORIES ANO IIEPLACIMENT OIARTS Forcca,lin£ the likely 11111,,J,tt rJ

cmplo)ees that " 111 be a,wlablc at o g11'cn lime 1s only half of the p1c1un: It is also 1mporUII 10 ident,fy which current cmplo)ccs might be q,w/1{,ed for the anucipatcd job openings. Thi>

requires gathcnng mformauon abou t emplO)ecs' skill sets and quahfoca11ons. Although 1dt.1UJ[)·

'"S some candidates might be easy, 1den11fy1ng as many qualt focd employees as possible r<qwr<> more fo rmal planning.

Manual orcomputenzed talent inventories arc detailed rccorJ s or darnbascs that sumal' nzc each employee's skills c , • ompctcnetcs. educauon, tra1n m• langua• cs spoken prt\lOUS per ,ormanccrcv,e"s and chan r be .,. ., · erfr1 tool for qu kl · ces

0 ing promoted. As such, a ta lent '"' cntory can be a ro• Dcn,nmc •~ irgetung the right talent in the nght place "hen II "needed Tiic New Yorl S~

•- • " 0 .uai,on and Finance us d l10't Jobs " " e being ehm,n I d 8 1

c an in,cntory S)>lcm to rca,s1gn emplo)cc; •

10 be quickly matched• eh. h)' a l?" 1"8 cmplo)ccs· cducauona l Jnd e,pencnllal back~ "" I e minimum q· I r, cs tit 1n,cn1ory allo,.,d mo, t d . 1

ua 1 1ca t1on, fo r Job, ,n vanou, state agenc~ · "Paced emplo)ccs to be placed '" other Job, \I llhm s,x "eel>,

Charter 5 • Forec:1J,1tng :md Planning 129

Man) companies employ imm,grnnts 1n rclall\Cly lo\\ -, l ,llcd Job,, dcsp11e the fact 1h.11

th< ,mplo)CC' graduntcd from un,versn,cs tn their homelands and ha,e h1ghcr-lc,el ,ki lls Once

,t,c,r Engh sh ,mpro, cs. thcsc cmpl0) ccs can often mo, c 1010 more oppropnatc roles 1n the com-

J'l") · ~ut only 1f thc fonn knolA S ahout thc, r quahfocallons Talent ,nventonc, help 10 track thi s

,nformauon Computcnted S)stcms ond human resource 1nforma11on systems that track the labor sup-

pl) anJ talent ,n,cntones or fomts can moke internal labor suppl y forccn.sting substanually eas-

,cr Soft"arc and service, allo'." companies to match employees' ex peruse and l no<1 ledge 10

bu<•nt" needs ond deploy the nghl people JIISl as 11Sse1S would be dcplo)cd 1n a supply ch:un. 16

IBM 's Workforce Management ln11,auvc borrows many of the same concepts of supply-chwn

,n,nagcmcnl, such us capac11y planning, supply and demnnJ planning, ond sourcing. IBM built

.,uu,1un: thJI out hnes the internal and cx1ernal skill, o,o,lable 10 fonns ond prov ides a m1n u1e -

~)-m,nu1e >icw of the labor supply chain IIStng a computcnzcd tlllenl ,n, cnto'} Th< software

e3ialogs sl1lls. crea_ung common descnptors around 1Aha1 people do, what their competenc,e,

an:. and .,hat c~\"'r,cnccs and references the y ha1 c-1nfonnauon that goes well beyond a ba"c JOO descnpuon •

IBM 's system " ""' tested "hen a large client based in Wa;hington. D.C., contacted IBM

th< dJy befon: Humeane Katn na "as about lo h11 IIS server hub The chcnt requested 14 employ•

ccs • •1th specific sl,lls '" data anal)"'· process 1mprovemcn1. log1sucs management. project

m,nogcmcnt. and mfonna11on management. A search " as placed, and \\llhm 24 hours, 14 1nd1-

1 ,dual! "ere in place tn the requested locot10ns to suppon the recovery effon. Tracl ,ng do" n •

icJ.m without 1hc S)'l>tCm would have Ull.cn weeks.~~

Rtplacement charts arc a ""Y to track the potentrnl replacements for parucular po,i-

uons 29 A replacement chart can be manual or automated h v1suall) sho\\S each of the possible

)U~Cc)sors for n Job and summarizes their stre ngths, pre.sent pcrfonnlncc, promotion rcadmc,s,

and dc1elopmcn1 needs. Figure 5-5 sho"s on c.omplc of a n:placemcnt chart.

EMPLOYEE SURVEYS The ova1lab1l11y of internal talent is dependent on 1urno1er rotes. -.h,ch

are not 1111,ays con"ant. Conducung employee ,urvey, and mon,tonng indicators of employee

d,ssausfacuon. such as cmplo) cc abscntcmm and gne\Onccs. can help 10 1dent1f) the potcnual

for increased tumo"cr m the future For organ1Lat1ons ,, uh a 1,al1:nt ph,lo,ophy con~1stcnt \\ 1th

n:1a1ning emplo) CC>, or for organ11a11ons for wh ich tumo,cr ,s panicularly hann ful 10 a fonn' s

strategy executi on. staying ,n touch w11h the n1111ude, of the company's cmplo)ec, and managers

can be cnncol. Many fonnsconduct annual sur\e}S of cmplo)CC sa11sfac11on and fool for deelin-

1ng trends that sugi;c~t th at 1umo, er rnlcl> may nl>C

An organ11a 11on should ca,i ly be able 10 put together an age profile of 11s workforce.

allo\\tng II LO forccasl how much of its 111lcn1 ,n \Onous areas and uni1, 11 ,s hkcly 10 lose 10

rc11rcmcn1 3t vanous pom~ tn the ruture Dc:,pll c the relau,c ca,c or comp1lmg lh1s in fo nn3-

uon, • ,u"ey by The Conlcrcnce Board fou nd that 66 pen:cnt or par11c1pan1S rcponcd that their

wmpan,cs do not have an age profile or thrn worlfnrce. ,ugte"mg that they lacl hard data on

ho" n:11rc mcnts \\111 affect, anous d1v1s1ons and bu~mcss unil'-. Add11 1onally, dc,p1tc their ob, 1-

ou1 uscfulnes, for forcca,11ng. more than 63 ~rccnt of sun cy rc,pondcnts rcpo ned that their

organ11a11on, d1J not ha,c an m1en1ory nr their employees· sk,11, and tJlcnts. and 49 pcn:cnl d,d

no mc,sment of their companies' train mg and dc\Clopmcnt nccds.' 0 llus may he pJnteularly

, r ofllR

I I I

/fR Du,'< ,.,, 11 r Hrm Rt,;I<••• JIH D1reoo, rm,.-11, Rt'):1011 UR Dirr,,; 1or Crmr.il H,'1.;ltJ••

Pill \\ 11d\ U001 \11lh l\)\nt't Snm Joocs S1u11!j1lu I inanec. \ lr.11('~\ Strnti:lhs ln1crn.111ooal

l trt1W lt1 I :shl.-v u:l1ill10ni. Job Jlt r/ormanre Oubl:andm~

Job ptrJom1 mu Good Jub l',•rjo,n1ar1, ,• CnK'oJ

Pron101in11 rt,iJmt.u /lro,uo1m11 rN i, '4111"\t

l ',of'Wll011 , , iJillllt'H Read) 1\C"C'Jl i lobJI c,p:nenlc Need~ lkHIOf!llll.:nt Ill \U-;11qrn: rla.1111111;

FIGURE 5-5 The Replacement Chart f or a Vice President o f Human Resour ces Posiuon

REPUC£M £.\T C/IAIIT

, u ooll) 1l1m 11 u 1,h11/1hrpu111blr

,11cuuon/or n JtJb mul \ummur1: r, 11it1r prt,t11I pr rfan,umu prom1111011

rriidmrt \ and dt, rl,,r11wnt nf'tds

'"'

l I

I I • r )

I

I

130 Our«t ' • fum..1...uni; JAi PIJJuung .,,,, According 10 Dc,clopmcnt D11ncnsions lntcma11onal Inc

probkmauc1ncomtng)< fi b , 011 '0 percent or large. cstablt,hcd comp,. •• &I ott.I

h •,oun:e consulung ITTf\, Y - • - ~,tc, 1J1 .._ um.111 n:

0 1 or more or their 1op-lc,cl tale nt \\htle the rcplac,: ""

UOJl~-J State, , .. 11 lose~ p<rcc~ 15 r<:cnt Thi, funhcr underscores why ti's so i ll\cnt P<l<,i or 3)· 10 -l-l-1ear-old, d,-cltne, bJ pc \ I mponan1 r~ N£l!UZ3Uon: lo dc,clClp pro:icu,c )taffing plJn!"i.

fonusting the Extemil ubor Mirket

h I h re from the c<1cmal labor mar~cl a1,omc potnt. In add,uon 1 All orel11tLlll 0n3 :nc o 1 · d I o 11eo4 • h orkc~ 10 meet c,pand1ng demand. ou1s1 c peop c need 10 replace "'---

lfli! 10 lfC """' " · ~ h O . . --•\.II emploicc, \\ho n:urc or k a1c the organ11a11on for ot er rcas?"' rgan1zat1o ns moni10rlhc

C\temal labor m:irkct m t"o wa) :?, The liN \\ 3Y is 1hro1,gh their o u-11 obsen_•atio,u and tq,,,i ,nus For e\ampk. 3TC the quality and quan111y or applicants rcspondtng to Job announce~ impro, 102 or gciung "or,,c• Global engmccnng and cons1ruc11on company CH2M

Hill~

, 1r.1iegy ~pons for each counll)' or region that include demographic 1nfonnauon, talent l'11l-

abiltty. local hinng challenge,. local and 1~;cmauonal compe111ors, commonly used dm cr, lo

a1trru:1 ulcnt. and local salary cxpcc1auons. • The second way organ i,auons montlor the external labor mar~ct ts by 111011i1onng labor

marktt s rar,sr,cs gtntrattd by othus The most comprehensive ::iourcc of free data on Condi.

uons 10 the us labor market 1s the US. Bureau or Labor S1a11>1tcs (BLS). The BLS Web~~ (v.v.w.BLS.gov) conllltnS mformauon on 1hc nauon's produe1tvt1y, benefits, employl!ICII.

and uncmploymenL h also condum o National Compensauon Survey that provides "•SC 11111 t-cnefit data for o,cr .I()() occupauons tn 01cr 80 mctropoluan and nonmctropolt tan areas tn tho Untied States Recently the BLS proicctcd that 1hc nation's labor supply and demand "'OUkl t,, roughly equal. bu1 that sh on ages and surplusc, " ould occur tn ,omc occupauons and ,nd111.

tncs This means thai firms ltkcly 10 cxpencncc shonagcs will need to extend their "Orkfom

plans three 10 fi1c )Caf' 10 find al1cma111 c sources for hard-to- fill positions and/or ll1lo tho people hired for 1hcm Firm, in tndustncs wt1h surfic1cn1 1alcn1 can foc u, on more shon-tCIII

pllnnmi 11

This chapter's Develop Your Skills fcoture contams addt11onal sources or e\lcmal blx,

market 1nformauon h can also be helpful 10 1den11fy and 1rnck trends that might affect ru1ure labor supplyqllll

uy or quanUI)'. Compan,c, ltkc Microsoft v.aich college enrollment trends and ha\'e cxprcsscJ concern about 1hc low number or U.S. s1udcn1s pursumg computer science degrees Kc,11

Schofield. the general manager or stratej!y and commumcations at Microsoft Research. slOlc\,

- we v.ant 10 make sure that there's a rich p,peltne or great talent that "c can hire 10 buildfanuo

uc products, 10 our own companJ and tn our partner, compan1c, a, "ell, because ti 's about the v.·hole tndu,,try and not ius1 the products that ~l1crosof1 o,vn, 11,el f ... J,

The financial scn•iccs company Capt1a l One develops 1hrcc-J car labor demand forccllll

by anuc1paung business chJnj!cs tha1 v.111 impact us hcadcoun1 need, . Propnc1ary forecast iooJ els detcrm ,nc v.ha1 the company's mrnmum sus1amablc me 1s tn any give n m:ukcL By w ly11ng muluple factors related 10 its hmng needs as v. cll as dem ographic trend,. Capt1al °"'

DEVELOP YOUR SKILLS

Sources of Labor Market Information

Many sources of laoor mar,et ,nfoonat,on and forecasts e~t Here are some of the most copula, SOU!Ces and lhe.r Web adores,es

• Conference Board Help Wanted Ad,erusmg Index wwvv conference-board org

• Empire State Manufacturing Sul\ey w,,w nyfrb org • ISM Report on Business IIMW ,sm ws • Labor Market lnforrnat,on by State

www workforceserur,ty do'etd gov/mao asp

• tmB Small Bus,ness PoN w.vw nf,b corn

• SHRtW1101gers Leading lnd,cator of National Emplo)"""1

Index w.vw 1hrm org/hne

• Tr mlabs Online Jobs P01ting~ Index WNW trtmtabl com

• U S Bureau of Labor Stat,11,cs w,w, bis gov

• U S Censu1 Bureau www cen1us gov

' Local £mploymen1 Dynam,cs from the u S Census Bureau hnp /Mhd d,d census gov/led

Chap1cr 5 • Forccasu ng and Planning 131

c,umaics "hat percentage or the populauon ts ltkcly to applJ wt1h the finn o, er time. It then

Jctcrmtnc> "hat perccntaj!c or applicants 1> ltkcly to receive JOb offers and calculates when

111 1 , bOr reservoir_ will be depicted to the point that ti can't hire enough people. llus, in tum,

i,ccon1cs the finn s long- tcnn, maxtmum sust:unablc Sile around wluch ii plans its expansion icgy. Capital One also docs a 11 p code analysis or employees 10 de1cnn1ne the optimum areas

:::hich 10 locale so tl1a1 ti doesn' t poac h its own employees from cmung locations. 35

RESOLVING THE GAPS BETWEEN THE FIRM'S LABOR SUPPLY AND LABOR DEMAND

111, next ,1cp in the workfo rce planning process 1s 10 compa ,e the firm' s forccustcd demand for

labOr 10 terms or qualuy, quantity, and skills wi th tts forecastcd supply. Perhaps the organ1La1ton CIP''<IS 10 have the amount and qualuy or labor to meet 1IS futu re staffing needs. Or perhaps

11 opcCIS 10 have a surplus or shortage of labor Ir c11her a labor surplus or labor shortnge IS

forecast, nn action plan should be dc\Cloped 10 proacuvcly address the st1ua1io n. Acuon plans ,houldalways be consiste nt with the fi nn's business strategy, talent philosophy. and HR strategy.

For example. layoffs arc 1nconsis1cn1 with a talent philosophy of wunung people 10 co ntnbutc 10 the company o,er long-tcnn careers and result in ncgauvc outcomes for the finn. (In Chapter 12,

•• discuss some of the altcrnall\'CS finns can take 10 a101d laying off cmploiccs.) 1n,1cad or havtng 10 lay off employees. some industncs m desper:11c for them. The

Amcncan Nursing Association created a ~tccnng comm11tcc 10 dc\Clop an ac l1o n plan 10 addrcs,

1t,c nursing shortage in the Unucd States Hen: ts a pon1on of the acuon plan dc1el opcd 10

,ncrcasc the supply or nursc,36:

• Communicate nursing's uonomic ,·al11t'-cduca1c the puhlic nhout the pivotal role nun,• ,ng plays ,n the nation's health care system.

• Jmprol't tht work tn~ironmtnt-1mpro,•c the cond ition> under\\ luch nurse~ work so that qual11y pallcnt care 1s op11m11cd and nursing slaff IS retained.

, Communicatt tht pro/tssional nursing cu/turt -asscn numng's high standards of pro- rc,,,onnl practice, cd ucauon, lcadcrslup, and collaborauon 10 t-cucr appeal 10 polcnual

nurses and enhance the image or the profession. • Ed11ea1io11-rcshape nurstng education 10 enhance nurstng's 11nagc. • Rtcruitmtnt/Rttt lllion--c.nhancc profcssion:al oppor1un111c~ 10 a llrucl an<l su::ilam excel -

lent nu"c' for long, re"ardmg careers.

Siu Recd, president, Integrated Suppl)' Chain, Motorola Inc .• dc,clopcd an acuon plan 10

1ncrea.sc the future supply or supply chain managers. Motorola has identified the likely career path and skills the supply chain professional or the futu re needs 10 gc1 10 the top j ob The com- pany then partnered nggrc sSt vcly with key supply cham schools in Nonh America and 1n1crna-

11onallJ "We \'altdate our model with them and let them know what type of graduates we need for 1hcm 10 provide us," says Rccd.37 In other \\0rds. Mo1orola worked backward to find its

,upply chain talent. Whe ne, er changes arc observed in labor market condt11on<, 11 IS 1mpor1nn1 10 try 10 a,sess

•hcthcr the change represent, a labor market trend that 1s likely 10 conunuc or "hcthcr II is a , hor1cr-1enn fluctuation caused hy the business cycle. Undcr,,tanding the difference IS tmponnnt

because d1ffercn1 stnrfing strotcgics arc nppropnlle fo r cach . .!8 We discuss what 1he basic type,

or ac110ns plan-, arc next

Duli ng w ith a Te mporary Talent Shortage

Wh, 11huuld be done ,r 3 shonngc or qualtfied talent IS thought 10 be temporary? Offcnng lur- ing m..:cnll\C(j such :l(j sign-on and rcicn11on bonuses con~1c.ting of st0ck op11on~ or cash 10 be paid ,,lier the employee has successfully "orked \\ tlh the company fo r n ccrt:un pcrtod o f umc

can he lp the lirm cope \\ ,th the situation. Bccau\c lughcr salan~~ cost the organ11..at1un mon: monci for d,c duration of the new hire ·s tenure with the comp.,ny. 11 ts often be11cr 10 offer lt mnf

1nJuccmcn1s that last only as long as the talent shonai;c docs 19 When compamc< find it dt rficu lt

10 htre in a llj!ht labor mar~c~ they often tum 10 more c.,pensi1e rccruutng method<. ,uch a,

:i<ldt11onal adveni<tng and search firm;, or thcJ lov.er 1hcir hiring standard, so that more r«rutl\

A CT/O.V Pl.AN

.stmtrg) to P'°''" " t i) at.ldrr11 ,111 unt1, 111111td .s11rpl11r"' rlwna}:t <1 tnl/1/u)rt~

132 Cluprcr .i • F~•m.'J.)bn~ .n.l Pl.tnrung - J fi dx· po~111on i\'c11hcr of thl'SC ,1ra1cg1c, t'li guaran1ccd to

/JL'Sl\'£SS PROCESS Oi T SOL RC/\ G

rrl« WlflJ an nitrrr bM1111,11fa,.rn.,11 to un m4rpo,dnu Ju, 1u rru. uJrr

an: con,1dcn-J quallf1c or "'~ "unicJ ron,1.·qucncc , ~

c.,._h c.tn '.r,'1u,~ un , olu11on m1gh1 t,c 10 n:mul pcork currently \\Or~,n~ for the c ' On, ,hon •~ml ,uons "'II h~cl) ,1111 ha, c to bc lilied by nm hires. If the 'OOt °"'fllei

Nonc:thek).'!,. ~omc ~ti""C ,, unu)u.111) h1~h iumo\C'r, 1hr acuo n plan ,hould address Cltuc (( j pn'J'-c tcd l3tw sho : 1 1

n.,)' nnnr supcrvi<ion. 1111111,·d r arccr advanccm the~ f th: 0 er- for comp c, o,~ ,-- · r·

cni Pote o t tum , ~"' n111cs and so fonh The fonn ·s HR managen. can then try lo u 1111.( hm11cd m11n1ng or,~ · ·" · d d h nco,., C':Jtbt ol the.· rumo\c:r b) conJucung cmplo)rt' SUf\C) S nn ,scu'is t c s11ua11on With the ~

n ·s manacer... In <om< c;i,c,, crcaun ly may be needed to rcsohe projected laborshn..'." pa l

1 - h H " R Bloc~ had trouble fonding \\Orkcrs for 11S 1echn1cal suppon ·:-1

""1 Fornwnp 1.'." en '-"' ca JCPt.,.

burro l(ans,s CH) . 11 rclocaicd the focilH) to the inner cuy and hired workers "ho .. .., in ,u . . ~o L,td do"ntov.n .

faiemal ialent "''"°'Ls an: somcumcs used 10 manage temporary skill gaps Som nwiuon.) set up n1.'l"orLs including con~uhanb. frcc-kmccrs. , enders. and o utso urcing ~°'P.

that the\ "'P a.s needed 10 fill shon-tcnn IJknt needs. Pnnc,p~ F,nanc ,al established 1 ~ an \\ruch rcurcc~ can " orL. on 8 proJcc l-consulunB basi s, 3~1 \ ourEncorc enables mcm~ ponies 10 ,hare • pool of rcurcd cnginccrS and sc1cn11>1\ Compani

es can also acccu,::; iaknt in the cloud through Web ,lies including mturk.com (Mechanical Turk), freclanctr

anJ El31k.·e.com. This can gi\'C nn organization almo~I rns111n1 accc~~ to a large number ofs~

people ~ ho the} can Jure as and "hen needed on a con tr.let or proJCCt ba\ls. Bu,incs, lcaderS an: often attr.Jctcd to ~lob.ll locauons including Mexico and 0...

because of their Jo" labor co,,~. Labor com can change quickly, however. making thcscsJion :,1~htcJ dec1s1ons more costly •

Doling with a Persistent Talent Shortage

If the shonagc is likely to la.st a number of ycan., an organ11n11on must reduce its demand forth,

talents that "111 be in shon supply and/or increase IIS supply of employees "1th the quai,foc.,,._

11 ne<ds. Although 11 can be possible to increase the form 's suppl) o f employees, th,s 1s llOf I r. or practical soluuon for most orp-anizauons. ln, tead. m,:my orgamzauons try 10 reduce lhctrltf.d

for slulls thal w,11 be in shon supply by increasing their u,c of au1omat1on and technologJ,llll

by rcdes,grung Jobs so that they need fewer people" 1th 1he talents that arc in shon suppl)

Although to some extent they ha,c done so forcost-s,v,ng purposes, Home Depoe, Cosia, anJ many supcnnarkc ls arc among the compan ies that ha, e automated Jobs by mstalhng s,U

sen 1cc chcckou1 lanc3. ~lany callers to customer ~en 1cc dcpartmcn1, now receive au1omaitd

rcsponscs to their inqumes. Not all Jobs can be automa ted, hu1 11 ,s freque ntly an option rm

compan1<s facing talcnl shonages or "anung 10 reduce their labor cos ts by getting the -

"ork done "llh fc\\Cr employ ees Ho"c,cr, as "C h:1\l' mcn11oncd, au1o mation cnn gcntralc Ult

need for new emplo}ccs with specific types ohk,lb-for c,umple. empl oyees "ho can m11nL111

the automated equipment. These factor.. mus1 be considered a, well \\ hen a company dec1de1 to au1oma1c some of us funcuon.s.

The petroleum industry 1s facing a sc, ere shortage of petroleum engineers, gcolo&i.sts . ..t geophys,mts. dcsp11c automa1ing some processes and reducing the number of worlm nccdol

'" >0me Jobs from lhrcc to one. Dc,,pue the decrease due to ~realer automa11on , 1he pmonori

,hortage rs so scnous that the compaoy bclrc1c1 that this will slo11 the com pany's tnno,llQ

rate, c,entuaJly reducing the aniount of 0111hc company" 111 "•t Jl

ff 13lcnt is hard 10 find or 1s too cxpcnme, one option /~o ou1source 1he affected ~u11nos

process. Business process outsourcing 1s 1hc rcloca11on of an entire business function, such 11

producuon. man ufoc runng. or cus1omcr s.en1cc. 10 an indcpcncli:nl sc:-rv1(.'c provider in 1hc )Air

or 3 different country Commonl) Oul5ourccd bu>rncss func11on, ,ndude JT and 1echnolog)'""

vices. customer Ser\ 1cc and c, en t th I f

· corpora1e lrainmg If the fim, 1s j blc ,o ma in1a1n or ,mpro• e qua 11Y o the business process be CQ!ll

but c al i ing ou1sourccJ, tire rnmpJny can not only reduce 1IS :an so ocus more on 11s core compctcnrn:s. The relauonsh1p bct"ccn SJ 7 b II uro

and the business I ion transpona11on sen ,cc, company Penske Corpo<11 processes and ,Jiu p,roccssh ou1,ourcmg firm Gcnp3CI in vo h e, more ihan 30 d iffe rent ~u11"'::

~ rnfc\ O\" some compa · g 111,1 lc,eraging offshore sl,llcd labor T nics arc cngagin£'" hu,iness process ou1,ourc1n

pendent Genpact cssenuall O reduce cosi, and 1mpro,e 1hc q uallly o l 11, opcra11on~ •~

Y acts as Pcnskc 's vin ual ,ubs1d1ary \\'hen a Pcn, ke 1ruck 111'"'

Chapter S .. f ort"L.lSllng o.nd Pl3Jlning 133

i an ,n11.:r.totc inp. Gcnpact's Z)taff in lndm l'l1ccL lhc cu~to mcr·~ cn:d11 rind acquire pcrn11ts

,~:he 1rud 1s sroppcd ar a \\CISh Mati on OCcau~c ll la.els a requ ired fuel rcrmu. l ndrnn \\ Orkcrs

U'2fl,nut th1..' nccc).;.il) d~ umcnt.lo the '-'eigh ~tauon to £ Cl the \Chicle back on the road w1th1n a

i,.,1r hour After a tnp, the dm cr slog 1s shipped to a Genpact fac, ht) ,n Juarc,, ~lcxico, "here

ulc:tl!C, 1a,c, toll. nnd fud da1:1 ore entered into Penske compute rs and processed in India. \Vhcn

;cn,k~ ~ell.; thl! 1ruck, s taff in Mexico record the 1ransacuon 4-1

oealing with a Temporary Employee Surplus

\\1icn 4 1im1 cxpccb a business slo \\ c.Jo\\ n 10 be tem porary. 11 has SC \ era! opuons J f i;,lowdo" n:,

at(' cyclical or happen frequently. u~ing temporary or conu ngcnt \\ Orlcr., who arc the fi r,;1 10 be

!ti go "hen busines, s lo" s cnn help bu ffer Ley pcmtl.ncnl " orkcrs and provide Lhcm greater

cmplo) rncn l sccunly Temporary la)'offs arc another opu on lo deal "uh a sho n-1enn cmplo) cc

,u,plus, bu;,thcy <omcu mcs need 10 la,t more thl n six months 10 be cos1-cffccu"e due to se"cr•

ancc coSI'-, grcrll..:r unemployment insurance prcn11ums 1hc fi rms must pJy, temporary prod uc-

U\JIY declines ,n the finn 's remaining \\Ork force. and the rehanng and retraining procc'"· Losing

the 1n\e.)1mcn1s the organ1,a11on pre\ 1ously nrndc 10 hire and tr.un the laid-off" orLcrs can also

be cosily. Allcmjll ves lo la)OITs include acro~)-thc-board 'ialary c uts or a rcd uc11on m worL

hours. or rcallocollng workers lo expanding areas of lhc business. Some lirms offer unpaid vaca-

uons, sabbaucab,. job sharing, and other crcall\C lioluuons 10 temporary surpluses.

When the labor market pcmlll.) hiring .a ~umc1cn1 number of \\ orkers. some rcUJlcrs uu-

!iLC 1hc surplus by hmng add1uonal part-lime \\ Orkcrs and adoptmg a "Just m umc" staffing

model 111 \\ h1ch employees lcnm !hat they arc \\ Orkmg \\•lthin 2-l hour, or less o r a M: hcdulcd

shift. Some rc1a1l \\Orkcrs arc exp.:crcd 10 cal l in the n1ghl before or mo rning of a potential sh1 f1

10 learn "hcthcr or not 1hey ha, e been sc heduled to \\Ork. Who gets scheduled and for how Ion~

, 3 n depend on crnplo)ces· previous week"s sales pcrfonnancc or proJcclcd customer traflic for

the d•y due to 1hc weather forecast or proJectcd sales. Walman', scheduling software alcn,

managcrS when an employee 1< approaching enough hour. to quahfy for hcahh care benefits '°

AJlhough this can help organizations con1rol pa) roll co~h and pre\ cnt umJcraaffing due 10 turn-

O\Cf. the crrauc schedule and mcons1Mcnt number of 'work hours can male II d1flicult for pan-

11me cmplO) CCS 10 make e nough money, rai se c hildren. or 1aL.c clas~,.

Dealing with a Persistent Employee Surplus

Orgam1011on, )0mctune,;; need 10 pcnn:mcntly reduce Lhc number of people 1hcy cmplo)

Technology changes, 1hc entrance of compc111ors, and changes in cuslOmcr prcfcrcn,cs cnn fu n-

damentally c hange 1he numhcr and types of \\·Orkcrs an o rganiza11 on need~ Early retirement

mcen1n e,. la)'offs, and no1 filling ,acalcd pos111ons can all reduce an cmplo)cr's hcadcoun1.

but not w11hout a co~I. Earl~ rct1rernen1 program, can result m 1he m0'-1 ~l,lled and producll\ C

cmplO)CCS 11,;J\ mg th e organ1£at1on Not filling vacated positions can lcO\C le) pos111on'i in

1hc organ11Jt1on un\lnffcd or undcr,tuffcd. L:t) off, can damage workforce mo rale and hurt lhc

firm') rcputalmn ~h an cmplo)cr. Ac11on plJn ~ 10 nddre,s n pcr,1\tent cmplO)CC surplu s CJn also

m, ohc rea.s,;;1gnmcnb, hiring fn:e ,c~. and !.leering cmplo)CC\ 3\\0Y from ca.rec('\ m tha t po'-H1on

lo reduce the need for fut ure ln)offs. Retr.11mng emplo) eC< 10 fill other JObs ,n the linn can hel p

bnng IJblOr ,u pply and demand 1n10 halancc. ll1i.: go.,1 of an) ,taffing s1ra1cg) ,~ to :icqu1rc and rcu1n the mo~, producU\C cmplo)ces and

remo \C lmH·r pcrfonncrs. Pl:.tnnmg acU\IUes d1Jt enahlc an organiza11 on 10 an11c1patc 11, future

cmplO)IIICn t need, and scale do" n tradually mthcrthan abruptl) 1hrough ma,s la) off, or dramatic

rc-qruc1unng c:an help tn rontrol the l'OmpJ ny's rc,truc tunng CO!,b and rcrn,111 to p rxrformcrs

STAFFING PLANNING

In addit ion 10 \\Or kforrc planning. u 1, al,o 11nportan1 10 talc 1hc lime to plan the ,t.lll1 ng pro-

u:-~s 111c three quc)tlon, 1h:it need 10 he nn'-\, crc<l JJC

Ho\\ many people , hould be rccru11cd'

• Wlut rc,c,urcc; arc needed'' llm, much 11mc \\ 111 11 1aL.c 10 lure the cmplO)c..' C'i '

We JJJrc:,, l"Jd1 of 1hco;c quc,uon~ nc , 1

134 Ouf(C'f si • M..'YC\.3.._...UO~ mJ M.&nrun£

How M.any p.,opl., Should 9., R.,cn1iUd7

ST AFFI.\ G J1£LDS

dtr prop._•m,-, t,f U,-p/4 QIUJ IIIOl"lll' Jm- ,_. ~, c,f IN Alrvtll' pruau

11/IIJ.\ G J"/ELDS

tit, r,rrrri1a~ of ar,,lu a,u.1 rJnma1,I, i.,.,;

J,ics "'" usuolly IO>C ,n1cn:,1 in lh< posiuon befon: being h1.-..i UC<·au"' ,omc Joh , :u,Ji al ficauon, 11 ., almo,1 nlways necessary 10 generate more ilnd ~ '" " 111 lack oppropn>t< qu

1 1 AdJ,uonJII) hJ11ng gn:a lcr number< of appl

0 PPI~

lh3n the umt'icr of ,~n po,1ul'n~ , f th icants llt.- n ,.1c,u,c nus allo\\, 1t to rdcnu Y c candidate \\ho be ~

an orgJ.111z.111on 10 be mon:th)( nh no:•rson v.ho :ipplu:) At ihe ,ame 11111c rccru11.1 \1 fits 1ft =,uon r:uhcr th.n hinnc < u , ,- d • ng IOlti •~· al

1 ,-,,..,., can n:,uh in 1hc fim1 , pen ing more lha n JI should •- ) ~

n:a.:h numcn, opp ,con -• h fi • h ra1,..,. .. _ be f upphcanl~ ncce.)SM)' 10 meet I c inn s mng goo.ls .. .,.

m ru1ung onl) the num r o r d d . The: ··,Jcal" numocr of opplicanl> 10 n:,cruJI or an opening epcn s on lhc nou,n:, of

o,pn1Zauon'ss1affing and HR ,111ucg1cs As "c ha1e C\plru ncd. n:c ruJ1ing loo sm•U a P0ol lit n:,uh in the finn bcong unable 10 ,denufy enough qualified candJda1es lo be able lo fill ,is ._ ing, Too large O pool place, unr<»onable burden, on 1he n:cru1

1ing funct,on·s adm,n~

S) ,iems and II ll.llCS umc and mon<) bul docs nol guaran1cc 1ha1 rccru JI, will have lhc ~ ale quahficauon, Plus. the finn nsks insulling il l will among ihc many n:Jcc1cd apphcan~

gool 1s to 41tr.ti't a suffic1cn1 numbl·r or cand1dJlc~ "ho me-rt or exceed lhc personal and~

"'lum:mrnl> of the Job

STAFFING YIELDS Th< bcSI source of infomlJIIOO for dc1em11 ning how many people 10

comes from dal!I collected dunng a company', previous rccruHtng ,•ffons. One way lo~ . ~. by looking a, the finn's pr<11ous staffing yields, or ~,e propon, on o f upphcanis mo,,01 tr,_ one <IJge of the lunng process 10 lhe nc.i. and hiring ) iclds (also called >e lection rauos), or11t pcrc<nl4gc of apphcanis uluma1<I) hlfcci

For example. as 1llustr:11cd 1n Figure 5-6. ,f 1hrec oul of four JOb offers an, '>PQii acccp,ed. lhc company "'II h01c 10 make 100 offer, so as 10 hrrc 75 employees. If, on 11,"tt. one JOb off tr 1s made for every four in1crv1c" s, Lhcn .JOO canduJa1cs mu~l be in1crv1cwcd top.

cr:11< 100 Job offers If four ou1 of fi1c 1nvi1auons 10 1n1m ,cw arc acccp1cd, 1hen 500 1011..._

muSI be issued 10 produce the .I()() 1n1<rv1c" candJda1cs. If one ou1 of e very fo ur apphc:aois 1 1yp1cally rn1 ucd for an inlm ,rn . then 2,000 apphcanlS musi be gcnera1cd, n:sulung 10 1 l<ilt-

uon rauo of J 12.5 pcn:enl (75 hires ou1 of 2.000 apphcon1s) S1afling yield pyr:,m,ds cia be constn.1crcd 10 1llus1ro1e these rcquircmcn1.s based on the organ1,a11 on 's previous expcncrn,am

,prc,d;hcc1s grca~y simplify 1heir calculauon and apphcauon

Suufing ) 1clds ore no, the same across all Jobs, hmnp s uuauons, or economic cad-

uon, In foct they can ,ary ,.,dciy w1th1n a single rndu,1ry or e•cn a s ing le firm For cwnp1r. M,m,-.ofl only hlfcS abou1 2 pcrccnl of ,u apphcanlS for ,oflwan: po<111ons, which IS l)pial r,,.

115 rndusll)'. 47

On 1he other hand, organJLauons hke Amway and Disco, ery Toys hire rhc m,p

II) of lhclf apphconis for sales rcpn:scn1au1 e po>11Jons. Offer a,-cep1ancc rates arc also ~•nmDi lo"er for professional and 1echn1cal cand1da1es 1han for un<l1lled and sc1111sk1 llcd \\orlm

A company's ,iafling ) ,eld< 1end 10 be reJsona bly conm1en1 from yc:ir 10 )Cat, ho•mr

Someumcs 111,nds can be 1dcn11ficd lhJI add 10 1hc accuracy of 1hc firm's labor force pr<dr<IIOI "hen other markc1 cond111ons arc rn.~ cn into accounL "

8 For c,Jl'n pl~. 1f an organ11at1on h.nnld:

us sal:iry lc,els more compcuuve or c,cn l11ghcr thl n the marlc1 , 11 can gcncr:il ly C.\pcc1 11 IUJCJ

7S /11rcs1Jof J )

t IOOOffm1l olJ)

t J OO lntm 1c1,~ I-' of SJ

' 00 ln1m ' " ) ,L1Joo11.>f I ,,141

t 2 000 Appl,c-.mLJ

FIGURE 5-6 Th• SIJff,og Yoeld Pyramid

C hap1er 5 • Forrc~ting tlJlJ PIJnmng 135

Jl"f'1i~•an1 pool and a lo..., cr percentage of spplican1s hired as a rc.suh At the ,·cry lea.st. prior )taff•

t'I ) 1clJ5 can he a good 5ianmg porn! for c,11m:iung probable )tclds and mm1mum apphcJn l

11 • qu1n:rncn1s fo r 1hc current rccru111n• cf' A d · qu4nuty re . b ion. pri mary 1.sad"antagc ol relying on pas1

>t:sffing )tclds 10 forecas t O firm s rccru,ung need~•~ tha1 ideally an org:m1tauon "''II be able 10

,mrro,c on 11~ p;bl yield ratios by analytmg the clfcctl\cncss or ns J 1ffcrcn1 rccnuung sources.

ilttcung 11.s n:cnuung efforts at the- most producu,e ~ourrcs, and 1dcn11fy1ng and lc,c-ragmg the

n.'<'n.u ung mcthcxh ihai "°'k best for lhc l;J\CnJob Ho...,c,cr. if the applicant pool an organaz.1-

11on 3ttr.icb'" ihc fut ure 15 orh,ghcrqualuy than II has been in the past, then the finn cun rccru ll

rc"cr appllcan1~ )Cl cnJOy c-..cn grc:ucr hmng )iclds and sclccuon rauos. This v. 1II allow 1t to

hire J ~realer pcrcenlage of apphcan1s able 10 do lhclf Jobs successfully. I hereby ,mprm ing ,he

:I\Cr:tfC pcrform;mcc lc,cl of the com~ny's "orkforcc. It 1s 1mpor1ant 10 rcmc-mbcr that the ~ey issue 1s not v.hethcr the Jinn's slaffing )iclds

~ h1eh or low. Whal mauers is whe1her lhc staffing S)'Slcm 1s produci ng 1he ngh1 numbers or

t1k: nght kinds or employees m the nght ume frame Ahhoui-;h staffing 1s an invc!iilmcnt, not an

c,rcn~c. a l.c) 1s,uc for many orgamtauon<; 1s the need 10 control 1t.s monetary m, estmcnt m

,.,rr,ng. This C.1f1 be accomphshcd by hm, ung the >Ile of the apphcan1 pool or by more effi . c1cnll) managing the opphcauon process. If the propon1on of h1gh -po1cn11al apphcanla) increases,

,h< io1nl number of apphean1s needed 10 ge ner:11c lhc nghl number of the n ghl qua!Jly of ne\\

hires decreases. In the past, how~ver, It "as widely believed that rcc n111ing a larccr applica nt

pool -,as always t>c uer than rccruJlmg a smaller pool because JI "ould ,ncrcase 1he oJ<l, of h1gh -

po1cn11al cand1da1cs being in the pool. nus assum puon d0<s no, nccc,sanly hold 1rue. Smaller

:irphcan1 pools can 3c1ually be supcnor once you consider rccnuung yields and cosb

,-h a.n c,i,a.mplc. as~ume 1hn1 an organuauon wants to hire the hc!,I talent u can find (say,

1h< mp 10 pcrccn1 of lhc 1ale n1 1n a given field) and 1ha11he orgam,au on', opphcan1 a<scssmenl

methods arc able 10 nawlcssly assess the 1aJcn1 of each applicant In t.he pa.st, the organiL.auon

• ould have probably 1ned 10 gcncnue as many apphcanlS as II could nnd hire onc-1cn1h of 1hcm Tius "'ould rcsull in a low hmng rauo. l.n fac1. 11 "as lhough1 that t.hc lo "cr selccuon r.111O \\ Ould

a.: 1ually lead 10 h1ghcr-quah1y cmplo)ccs being n:cru11ed This could. indeed. occur, bu1 only ,f

the enurc spectrum or 1nlcnt avail able to the firm applied for the po~u ,on For example. ,r a d1s- proport1on:ue number of undesirable people applied for 1he pos1uon. an c"cn lo" er hiri ng r.1110

" ould exist. HO\,.evcr. the lo\\er rauo wouldn ' I neccs~3rily lead to h1ghcr-quJlity emplo)cc,

being sclcc1ed. A belier su:a1cgy would be 10 ,ncn:asc 1t>c number of h1g h-- po1en11al apphcanis

and decrease 1hc nu mber of low-po1cnual opphcanlS If on organ11a11on 1s Jble 10 <lo 1his cffec -

111,ly, JI" 111 bc able 10 increase 1he qualJly of Jls hires ,. h,le simuh>ncou, ly rncrcM1ng 1i, siaff-

rng) 1clds and gc111 ng a belier return on IL< fC('ru111ng 1n1c, uncn1

Increas ing rhc quoh1y of 1he apphcan, pool 11111 also lessen the hurJcn placcJ on 1hc finn·,

applicant as)Cssmcnt and selcct1on systems becau.)C mon: of the apphc-ants nrc h~el y to be su1."-

r:cs1-full) lured TI1c ll mc and financrn.1 rcsoun.:-cs m, es1cd m rtcn111mg and cvalu!umg each

c~nd1d:11c arc al~o lc~s likely to be "a.sled 1r better rccru111ng results in a greater prnportton or

apphcanis bei ng a good fil. Add111onally. JI is unr,onan l 10 r<member 1ha1 c,cn 1he 1>.,s1 applican1

ll\~S\mcn t ~)'Siem ca nnot 1dcn11 fy po tcnual high ~rfonncrs 1r 1hcy never apply with 1hc orga-

n11411on. Targe1cd rccruJlrng cffons "1 11 increase lhc prol,;ib1l11y 1ha11he lop cand1<la1es appl)

Organ11ouon< someumcs sec~ 10 ob1ain high ) 1clds (h1nng a 1:irge pcn:cn1age of opph- c;:um) in the recru,tmg function to lccp cos1.s do\\n, but 1h1s siratcg) oflcn doesn' t con,idcr the

po1enual d1 lu11on of an organJZallon·, 1alcn1. Hi gh hmng y1clJs can be dc1nmen1al 10 1hc effec-

uve n:cnu11nc n1 and , dem on of cmplo)ccs ,f 1hc qual JI) of 1hc apphcJnts isn ' t "multoneously

con~1dcrcd llo,,c,·cr, 1fan orgnnizallon lc,cr.igcs the recru1 ung me thods and sources th3t " or~

hCII for JI . 11 1113) be able 10 alter 1he 1alen1 d1s1nbu11on of ns apphean1 pool 10 con1a1n onl) 1hc

bc,1 of lhc a1>1lohlc 1alcn1-for « ample, 1hc upper SO pcn:en l In 1h1> ca,c. a much higher ,.,.

gcicJ m ·run ing) 1cld (say 30 pcn:e nl) could produce 1he same quahl) of ne 11 hire , as d1<l a lo11cr

10 pcrccn1) 1cld under lhc 1rad1 11onal me1hod "hen a gn:alCr number or un<leSJrublc candida1es

~rn, included 1n 1hc appheanl pool Clearly. honng 1he be,1 5 of 50 1011 -quahl) :ipphcan1," b s

ideal lhJn hiring the t>c<i S of 20 h1gh-qualJ1y app hcanb. E1JluJ11ng 1hc staffi ng ) JClds from d1ffcrcn1 recruJ11ng source, can help 1n 1h1> rcg:ird.

The quJnllt) Jnd qualll) or hues fro m , ar1ou~ rl·'-·ruuing ~ourrc, an: lllely 10 differ both v..1lhan

and aero" orgJn11a11on , One com pany m1gh1 be able 10 lun: good p,:rfonncrs from nc11 spapcr

1-1d, crt1\emc111-. Uu1 another compan) or a l1 1lh.·n: n1 d1 , 1-..10 11 or the same compan ) might find

136 ChJf'(C'f Iii • h.'ft\.,1~u ng: !1JlJ PIJ.nrung , •mun1ng "h1ch rccru111ng ,ourcc, an, the "'bc,I" lo use

ll ORKLOAD-DRJ\1£\1

FOR£CASTISG

/urtro1rU1, OOJrd ,,n n1, uir1rul diJJ.a on 1M a, uag, nur,ib,r of""" np,raJI, rtadr pu UCTM1ttr or tllr '"''"\' ,uunbaof r,rn,w pru<t11td p,r

rrcn,irao,aa,cnrn rvn,,d

thi, ,lr.lt.:2, mdfecu,c ~tc _ on and its k,cl ,, 11hin the organ11a1Jon ,,,__8c-ncr.,,,, •· • ol 1hc po,iu · ""' I···~? "in« lll-.o ,.,th 1hc n,iun: rec for rccruiung apphcanh "llh higher le

I ni,,.·

,., . ,cru1ung -ou • ''e , I~"" might b< • \C') cuccu,c" ,, .1 c for rc<.'llllllng a

pphcanl> for clcncal or m•• n, IJII but k» rnc, " ~,ufaq

uon-1cchnolog) ' ' · d rr· ·•cir onnual h1nng rn1cs and the qualuy of,.. ...._ • I lei\ 10 I <r ,nu, ""'" hi "l

Job- Rccru11m an: 1 • ll 11 ",cr, helpfu l fo r 1110 kno" how long II hos Ill It an organ,zauon need, 10 hire quic >0· f soul\"<~ so 1ha1 11 can , 1ru1

cg1cally choose a I)~ 'II n from a, onc1y mong ,i....·

1alcn 10 ,, po,,un ' f man) dil fcrent rccru1ung ,ourccs "Ill be discus .,,._ The ad, antagc, and d1<0Jvnn1a~c, o SCd '""'-t Jcta,I '"Chapter 6 h f 1- ' 10 collccl , 1affing yield ,nformauon during its pre,

If an or•onllauon lS ., '" f' 10\li o,• < n the swffing) ,eld for 11s curn:n1 lunng c ,on" ,II be more challcn _,

mg cflon,, c,umou g nc,cs college placement office,. and the hle might bcgu,g bit not ,m=sibk He:idhunung age • Id f 1h . ab!,

r- fonnauon on the a, eragC) ,c rauo, o e,r canwda1es "-· • pro"de the firm "11h some ,n Th f .,., r ... ·h , the ) ,clJs of s,m113C organ11.3ttons. IS ,n onnauon 15 ·• c:in lllso 311cmp1 10 t-<n, mat, d I not....., . ... ,..-c, fic 1o 1he ac1ulll compJn) o,ng 11e hmn g or lhc - """ ho"e«r t,ccau,c 11 \\ On I"' ,.. f I J -•~ •

h . _,. f Th ch•~mn,11« of the company 11scl . ,nc u ,ng lls compc111ive no.

bemR "'" or c ~ • t ...,,°" • ,. •gc quohty of hfr. and rccrcauona opponun,ucs where••· compens:mon poc,agc. ,m. • . ""' Joi, a located can dramaucall) mflucncc 51offing yields

What Resources Are Needed7

Acconl,ng 10 the S:ir:1tog• lnsuiuie.' 9 there a,c s,x basic co>1, related to external hinng

I. Ad,erus,ng c•pense, 2. Agency and search firm fee, 3. EmplO)Ce rdcrrol bonu,cs 4. Rccru11er and apphcant ira, el co>1, 5. Relocauon costs 6. Company recruiter co,1s (prorJ1cd ,alary and benc fi1s 1f the rccru11cr pcrfonns duucsOlhcr

than staffing)

The.SC s,x fac tor. accounl for 90 percent of hmng co,LS. (The Saratoga lnsutule adJs • add,uonal 10 percent 10 co1<r rrusccll•ncous c~nscs mcluJ ,ng 1cs11ng. reference chccL"I hmng manager umc. and adm1n1Str.1U\C suppon: )

The m1cmal co,,1 per hire calculauon IS ,cry smular. and mcludes four elements ll

I. Internal ad,crusmg cosLS 2. Tra\cl :ind 1nte n 1cw CO)IS 3. Rclocauon costs -t Internal rccruucr C0)15

Companies for whom talent ,s lcy 10 1hc11 ,uccc1, arc undcr,tandably wilting 10 ,n1C11 mon, ,n sourcing and n,cru111ng 1r the ,aluc of a great employee 1s 300 11mes mon: than an a,a. age one. as one Google e<ecuu,c speculated, 11 mal es ,cn,c 10 have a rccru111ng budget tOuma or mon, lhe Sile 12 In add111on 10 1hcsc cosis. dc1crmrn1ng 1hc 101al cost of the firm 's sull'•! effon 1mohes de1crm1n1ng lhc re-ourccs anJ we of 1hc rccru111ng staff 1hc compJn) "'" tlffl1 10 hire the cmplo)CCS II IS secllng.

1"u~ "' discuss t"o method, of es11mJllng needed rc,ourccs for a , 1affi ng effon •Oil load-dm cn forccasung and stalfing cffic,enc)-dmcn torccas11ng

WORKLOAD-DRIVEN FORECASTING Workl oad-d ri ven forccasling uses hi;1oncal ,I.:, on the average number of h11c1 1yp1call y made per recru it er or 1he a,eragc number of rt(tlll~ processed per n:cruncr 01cr a g11cn penod of 11 mc-for exa mple, a week. month.°' )t>I For cxatnplc. rcfcmng again 10 Figure 5-6. ,fan organ11auon', a,cragc rccru11cr can P"'"'' HlO apphcants dunng • rccru,ung dme. the company 11 111 need u ;iaff of 20 rccru11crs IO I"' cess 2,000 apphcan1, S,m, tar procedures can be used 10 Nm1.11c the amou nt of aJJ•- resources-lhc telephone costs. ad1cnmng co,1,, pho1ocop)10g. background chccl s. mcdJcll 1 " 15· and '° fonh-ncedcd for the ,1affing cffon. The amount of money 1ha1 needs to I:< l»I gcted for the siamng effon depends not onl) on 1hc number ul people 10 be hi~ l,ul .i,.

Charter S • Forcca>ung anJ Planning 137

.h<~"' apphcunis arc local or from far away. u,e rccru11ing sources used. the sclcct,on methods ,rnplo)cd. and 1hc 11gh1nes, of the labor marlct

sT.AfFING EFFICIENCY- DRIVEN FORECASTING Another method of forecasu ng how many n:,nutcrs arc nccJcd " ba.scd on staffing efficiency. Staffing efficlcncy53 ,s 1he 101al cost as>oc1• ai<d 11 ,th 1hc compcn,auon of the newly hired cmplo) ecs-1ha1 is, the 101al starting hase pay of

311 "'" employees Fur example, if a fi m1·, 1n1emal and c.icmlll staffing costs wen: S1 00.000.

,nJ ro people " ere hired, each w11h a stan mg ba,c salary of S60.000. u,c firm's Slaffing effi- c,cncy 11 oulJ he 100,000/600,000 or 16 67 percent. Lo"er staffing efficiency percentages reflect ,n:alcr 51affi ns cffic,cncy. • Because u,c staffing efficiency approach 1s fi nancially and efficiency dmen rathcrlhan work- lo,IJ dn,cn. II can be a useful mc1nc for c,aluaung how "ell a firm's stalling plans 11ork. The n,clhod can al-o be used lo sci a budget for an upcoming hm ng effon. For example, suppose UlC firm "°"IS 10 ach1e,e a ,wffing efficiency ra110 of 15 percent or less, and plans 10 hire 25 new emplo)OCS per month al an a, crJgc stan,ng base salary of SS0.000. In I/us case, UJC firm will ha, e a budget of $187.500 (25 x S50,000 x O 15) a month 10 spend on rccruucrs and other s1affing resources s-1

How Much Time Will It Take to Hire the Employees?

Hmng manage~. of course, do n'l "' antJobs to~ vacant any l onger than nccesSJ.ry H o \\ C\Cf , It

i».cs umc to find, screen, and ncgouate with each nc\\ hire Ortcn It L3kcs longer than expected. In 2012. the a1<ragc lime 10 fi ll a position "as 33 days.55 fa1abhshmg a staffing umchne before ~ginning the )laffing 1n1tu1u,·c ensures th3t tunng managers, rccruncrs, and other Marring spc- c,3hsts l now whot to expect. lnfonnauon on the a,cragc interval bct"Accn a candidate' s apphcil• uon .ind mtcrv1cw. interview and offer. offer and hire, a nd so fonh. can be useful for umchnc dcHlopmcnl purposes. By tooling al these mlervals. HR personnel can 1dcn1if) daily. wccll). and monthly go.its for each staffing step.

The length of each staffi ng Slage vanes widely acro,s Jobs and orgamzauons. In general. higher-level pos111ons take lonscr 10 fill than lower-leve l po1i11ons Ho"cver. skill shonages and lo.al compc111ion can lengthen the lime 10 fill tm, cr-lc, cl po1111ons as \\Cit. The staffi ng 1echnol- og) the firm u,c:,-" hcthcr II uses r~sumC-scrccmng sof1"arc. accept') Job applic:uions over the ln1eme1. and so fonh--<:an grc.a1ly impact how long each staffing stage lasts. 100

Figure 5-7 1llus1ra1c, a l) p,cal hmng umchne l11roughou1 the <1affing proccs<. rchable, accura1e progress rcpons should be prepared and

compared 10 the s1affing plan It could be lhat some stages of the staffing process 1ale longer or shoncr th an pro1cc1cd, and the prOJ«led umchne should he adj u, 1ed accordmgl) . Ma1n1n,nmg progn:ss rcpons can at,o he lp the firm dc1erm1ne "he1her 111s on track 10 produce the 101al num- ber or hires the organ11a11on is wiving for "'th,n 1hc 1argc1cd penod of ume. If the curn:nl hinns pace" found lo hc 100 ,low, 1hc organ11a11 on m1gh1 be able 10 lake steps 10 speed up the process or recrull illl'n~ people than It hall in itially intended

If 1t 10:. lno" n that Job openings arc hlcly 10 c ,1) t, ba)cd on h1Moncal turnover or hiring

paucm,. 1he rccruiung ,1alf can hcg,n sourcing and processing candidates before the po,iuons c\Cn become open 1111, l"an dmmalic:illy n.'ducc the umc 11 takes to hire someone to fi ll an orcnrng b<.-.:ausc cand1da1c, arc alrcad) ,n UIC p1pchnc Wc',c described lh,s approach, called romumous rtcrn11111g, m carhcr chapters The method ,~ pan1cul:trly useful for pos1uon) that 1um mer rc latl\ d} qu1cLl)-fnr c,ample. opcmn£~ ''- ill need to be tilled throughout the ~C.lf on

\pr,l,cau~o

• I I "dll)\ I

FIGURE 5.7

ln1i:-n 1c" fob Oller l tlcplMinc

► \ s\Cnm.:nt • - t___► I ,tended

___J

,-L1 ~ •

; 7dL, I + An Example of a Typical H1r,ng Timel,ne

fohOITcr t\cccp1cd j Br:gm r rc1ob I 4 ~ lnuning

_j

7• "°'l't'I...\ 10 111 • lt11d11,,u rrquirtd

STAfflNG EFFI CI ENCl '

thr 1otal nut ,u sv,wrtd1,,tl1 1f1r

romp<nJtWOn afthrntr.lJ l11rr1I

tmplu) t t'J

138 Cn.Jrtcr j • i;.,n,~ung w,J Pl.llUUllg "ell for Jobs thJt ,al~ a long um~ to fill. o r for Jo bs that

Summary

.i rolhnc ha.,,~ II C"'Jn al,o \\ Of~ t.h an: \acant Sak'- JObs arc a good C:\amplc Bar h COst~ or$'o.ru,;lH,:on 3 h..,1 r, r monc} \\h1k C) nl "'IY n~,~ applicant pool every lime the o c rtcl'kiz_

I e n--cnuung an c i, .. rgan12.a1i~ mg. tn l"Clnt.r.bt. mH) ' ~ fill Jobs n--cruitcd this way t) p1cally take a longer tun e 10 fiU--q ha:, one or more prn,i uon5 to .

1 1

indu,tl) tend 10 rccn111 on the same cycle, a. i·o~• _ If Of'l'3.0l£3U0 ns tn a part1c u ar I F I . v-t',N .. ~

e , rc-ducc the quanUI) o f a,a1lablc ta cnt. or C;(am p c, 1f cnginccnn -ic ~tJ.ff~ng ~hilo....'°ph) ma;, colk c nx-ruiung tn No\'1.·mhcr and confim1 new hires in Marc~~ p,an1t:, h:nJ to ' 1311 the _£ March 10 tx-gm recnuung for a rcpl :iccmcnt may mean '4aq. mg until a JOb opening occur. mfro, m ,h .. other oroan1za11ons' rcJcctcd JOb candidates R lhito,

'" l o n IS fon-cd 10 T"C'Cf\JI( ll"- e · • ecru.1.1 C\rs:3 nu:s 1 , . do ma)' ..., orJ.. for an o r!:am tatJon us ing a lo w-cost stnucgy ,,.._ 'I after com~lln'" oreanwmon.s bl ·ct ..._ no 1 lookm foreto~ucr talent. but otha organt2auons may be un~ ~ to I 1.·nufy a s u ffic1crun II

g I

a........ , ...c they i1fC n.:cru 1un,g o ut-of-cycle with their competuors lllll- t\:r of quahl) arp 1can lS l,-...Ju •

Strategic Workforce Planning at Black Hills Corporation

To ~ecp ns bu 5

tnc!!.s :,ust:urubk. c~ conglomerate Blxl: H1lls Corpora11on lncw ii "ceded lo cng-.isc ,n v. orHorcc p!Jnning in the fxc of an aging cmplo)ee po~la11on. Many of !he SOOn-!Q..be ~tu'C'mcnt chgit,le cmplo)CC', including en~1nccrs, n:uural gas tec~nicians. and sy111cms opcr-atofl. had hichlv spcc1al ited st.ills that v,ould nuke t.hcm d1fficul1 to rep lace ·

- Thc compan}··s str.ilc£tC "' ort.fon:e planning proc~:o,S began ~1lh a rt\ lcw of Black Mills' "or\.lcwee to iJcntaf) hov, m:in) emplo) C'C'S v,crc c, J)C'CtcJ 10 Je,3, c volun1:snl~ ,~ 1thin fh c )Cars and how muctt II.I bu,,~ v,ere e.,pccted 10 gro" An) Job func11ons c."<pected to be changed, added. or rcloc.ucd 'crt ,dcnufkd The comp:tn) al~ studied m(' k-ng1h ofumc 11 takes rcplacc-mcnts to reach foll produah-ay

m d1ffcrcnt Job5•j 4

Ba:o,cJ on the rnull5. Black Hills cre:itcd a fi,c-)C3.f pl.in oullming 11 s la bor needs for each Job lD each bus,nc~ and loc:mon Occau~ Ulark Hills opcr.m:s mu l11plc bus1nc.sscs. including 0 11 and naruni g:i.s CAplor.tl.lon. eh.--ctncily gcncr.J.11on. and coal nun,nr.(

1 11 needed to develop d ifferent taJcnt pipchms

for different sk.JUs This k-d JI 10 m:d.c chlllge$ m hov, 1t rccnul\ and hires. rncluding tilling the rrcn,,1• mg pipeline earhcr for h11hly technical po!io1t1ons rcqumng grea1cr umc to productl\1ty once a penoa I.) hired ~

To help ~s sl,JI shorugts m Sl>mc kc) an:ls. Bbcl Mills is a.ho "orkmg \\llh technical schoob lo (k-.C'lop cusiomw.-d training pr<>grJmS 10 help 11 fill a SfK'('lfiC number of enuy lc\cl j obs pcr )l'31 rc11 numt\:r of )e:ll'S Rcun:rncnt ehgiMe v, nr~m are alM> bcmg enticed to Slily on t.hc Job longer 00

Foreca.sung the number. typ:s. and quaJ1t) of employees nccdcd to accutc: the business strategy 1s cnucaJ for cffccuvc s taffing . Scwng ta.Jeni goals and ObJCCU\ t.'S that arc consis1cn1 "uh the firm'-. s wfing S tr:lleg) and talent philosophy arc 1mporunt goals of the planning pmcc.ss.. TI1e ~:-i.smen1 o f 1hc org.1nuauon· s external Jahor e n,1ronmen1 .1nd .:i company's own talcnl s~neths and s hortrom1n~s can mOucncc 1LScompct1ti\C 00vanl.3ge and-Lhc bus iness s tr.11cg.ics 11 is lilcl~ to ~ able 10 pursue ~UCCl-SSfully.

appropnatc budget and resources before lhc ~laffing 1n1111U\t begins Addiuonally, ii 1s impo n an1 for planning purpose, !IUI lhc llmeline for the recrui ting effon be c s1nb li1-hcd 10 trt51ft 1ha1 the correc t numhcr of new hire!!. will be re:1dy lo ~,an v.hct they arc needed. A lth ough 1h1, 1s parucularly c n1 ica l bcforeu e ., pan sion cffun o r the hmng or a n un u,uall y lari;c numN:r or people, 11 1.s al so m1ponant 10 a <;,c:-i.~ needed reso urces 1'1:(ort hmng a sing le ind1v1dual 10 ensure 1ha1 hiring goals can be mt1 and that the hmng manager um.lc~1nnds " hat 10 cxpccl rrom the st.1fling proces, .

It is 1mponan l 10 dctcnmnc lhc s11c o r the rccruu- mg staff and ~ :source~ that v.1II be needed and 10 secure I.he

Takeaway Points

1. The v. orkforcc pl.1nmn~ process ~tans v,11h the fi rm's businc.ss stratev Aflcr arucu lJl.lng lhe firm's ulcnt phllo~phy lnd strJ- tcgie staffing decision.\, a "ori fon--c analym ,s then condue1ed to fom:as1 both labor denund and IJ.bor supply. anJ lo idcnllf\ an} ga ps bctv,ecn the 1-.... 0. Acoon plam conmttn1 v. 1th tht fi nn'~ talent ph 1l0Sflphy an- t.hcn created to :k.JJrcss any gaps The ac. tion plaru arc then monitored. C\alUJlcJ. and re\ iscd as lhc fi nn•s cn, 1ronmcn1 ctungc.s

2. An orgamza11on can predict its ru1urc bu\1ncss ac11, 1ty b) L1sir,1ro soruJ forcrats. 1n1cr~ 1 r.ite forL'Ca5l~. c urrency c,changc r.itc r:;_ cam, rompc111or forcc::i,ts. mdustf) and c1.:unom1c forecasts. other mcthoJs, such as ,... hcthcr 1t is cn1ering or e:\'.111ng a business.

·1· An org:m11:111on C;ln u,c r.u.ioan:tly!!.iS. sca11er plot5. trend an.il)OS. or Judgmental forcc:ist mg to tktcrmrne 11'- demand for v.orl etS-

..a. Tu foroc.w ns internal l:thor s ur,ply, firms can u,c 1ran~1uon :IJW,: JuJgmcnL t.1.lcnt imen1oncs anJ rcpbccmcnt ch.1f1' · and crr.piJ')

,ul"\C)~-To forccru.1 11.s e,tcmal ~urply or '°'ori:CN, a firm can n:I} 011 the'lr o"n Qt-ti,,Crutions und e\JX::mnce, or monitor bbor mali:et sLJ- usu~ fencr.il.N b) ()(her'\, !luch ~ lhc U S Uurcau of Labor Sl:llisllcs

,, Ac-lion pll11 5 proactnely addrc!ls an1 1c1pated surplu ses or !lhon - •

3 gcs of cmplo) r'CS and ,houlJ al"'J)'S N.' co ru.1 stcnt wnh the finn's

bU)10C'' str.ttegy. talent ph1lt.:tsophy. and HR Str.llC@)

Discussion Questions

1 , If fon.~ast mg 1s rarely e:(ac t. "hY should n firm bother doini? 111

, Wh:il l::iN>r force trend:-, might innucnce a fi rm 's st.J ffing pl,mning . - 10 )Ollf op1mun" .}. ll ov. can cont1nFcnt employees he lp :in o rg:3n1,;at1o n prepare for

an11c1pa1cd surplu~~ or ~honagcs of \\ 0rkers''

Exercises

1, Strateg) £.\rrc1J·f' Reg1:o,1cred nurses arc in s hon suppl)· m the Unitc-d S1J.tcs-a situauon lhat 11 ,s expected to " orscn. h is pre• dictcJ 1h.:i1 the demand for U.S. nu r.img sen ices "ill exceed :,up- ply by nearly JO pc:m:nt m 2020.61 Many n-g1)tcred nu~s are approaching rc11rcmcn1 age. and the nursing profcs:.100 1s facing. difficul11c.s m1rac11ng ne,\ cnlrantsand rcta1mng c\1Ming nu~~ In adJ1uon. nur:.mg schools hl,e bccn

6 ,!lnablc 10 exp,llld fast enough

to ~upply enough add1trnnal nurses - Worl,ng m a group of three to fi"c students. re.search the

sc,erity of lhc nursing shortage. ,f ,Ill), in )UUr area. Thl-n ck,clop an action pl.in to Mratcg1c:lfly address a nursing shoruge m ) Our area (C\Cf1 1f one doesn't c:\1 st m your area) WhJt arc your :,uggc..~t,on.) for impro\'rng the qu:u111t) :ind quah1y of a,;ulahle nu~ o,cr the nc,1 t\\ 0 dt'C:1.dcs7 Be po:p3r'C'd 10 share ) our an,"cr; " 1th the cl.l.\s

l. l)e, elop Yo11r Sk,11.r l: .. urc1u . This chapter's Dc\clo p Your SJ..1lls feature cont.J.1m, nu merous Web :Wdrcs,;,c, for different IJ.Nr ,up- ply forec.ists Wor~ ng alone. u~c these and 3.fl) other rde\ JOt resource) to forec3~ l the supply of larof' for a Job in ) Our cho.;cn

Ci\SE STlJDY

S\~l'ct Toulh Inc. ,, c'<-pcricncing gro\\mg demand fo r 11.s new lmc of cand ) and needs to :ldd 3 new producL1o n line o f 50 \\ 0rk<' r... You arc the co mpJ.J\) · , Ill" " I) hired, ice president of humjn rc,ource~ . Yo ur lin.t ta..:k t!!. to d c ,cl o p a qaffing plan for th1 !!. new producu o n line The comp j n) ·s lm,to n cal ,1affing) 1cld~ for 11s produc tio n line J)O:!llllo n, :ire~•~ f<'llo " ~.

20 pcrcc n1 of applic ants 3rc 1n, 1tcd for 1n1cr. 11.·,vs 80 pt;rccnt o r in tc n 1c,, m, 1tJ1ion-. arc accepted 15 1x· n.·c111 or 1hc r•wplc mtcrv1c\\ cd 3.f'C n tcnJcd Job offer'\ 50 pcn.·c-n1 o f 1h-.: p:oplc rcce1, 1ngJob oner. JCL~cpt 1hcm

.\rrhc:itton - l nlcf'\ 1c\o\ i\~-.i;:,.,m, .. nt

- JOOOfft:r C.,tr ndeJ

l

ChJpter 5 • Forcc:u11ng and Planning 139

6. The siaffing plannin g process mJdrcsscs how many people 10 recruit. v,hat resources arc needed. J..m.J how much 1imc 1l "111 take

to hire

4. If your boss asl ed )OU how m, esti ng more resources m forecas t· ing and planning could help the org.1niLa11on compete belier. \l.h3t v, oufd you s:sy7

s. Wh.:1.1 ...., 0 uld happen 1( ::i lirm J,J not engage in staftin~ planning?

career path. Wntc a one-page rcpon summannng ) OUf forccas1 :ind prcsem a bncf acuon plan to address any forcc~ lcd surpluses or shanagcs for this po~111on

3. Oprmng V,gnellr' fa·t'rr,u . The opening \·igncnc dcscnbcs the v, orkforcc planning process al Bl:1d Hi lls Corporation. One of the b1ggcs1 planning challcni;cs the company 1dc:n11ficd " as retaining its c"<pcncnccd cmplaycc.s. pamcularly for il.s highly spcc1ahL.cd s~ll nee<b lhJ.t arc difficult 10 find and for 1ech111ca.l positions m ....,h,ch ii takes longer rar nev, hires 10 become pro.Jucli\e 1:kcau ~ experi enced cmplo)ccs arc cnl1cal to Black Mi lls' ab1 ht) 10 o pcr· ate efficiently. ii must rc..•tJm as many " orkcrs a.~ 11 can. and also ens ure that their J..nowlcdgc is transferred completely to nc-" cmplo)CCS The company's gro..-.t.h strategy aho me.ans th at 1t.:!I need ror empl0) ecs 1s incrc~mg

Working 111 a group of U1ree to fi,c students. c.Jc-.clvp action plam fo r Blad. Hills 10 both ret3.m ,ts c.'CJ~ung cmplu)l"C!I and cn,;,urc the complete trJn,fer of J..no" ledge 10 ,t, nc " hires Uc prc- f'l3rcd to share ) our ideas "1th the cl.:iss

11,c compan) ·s a,erngc rec ruiter c an process 100 rc- c ru,u dunng a recruiting dnH-: . ll1c comp.ln) ·s ,1am ng tunelmc 1hc last ume it hired produc u o n line employees 1s g 1, c n in Fig ure 5-8.

Questions

t. Ho v. many peopl e !>hou l d S\l-cct T ooth recruit for us 50 nc,, asscmbl}-hn e JOii~'!

2. U"'mt; wo r~l oad-d n,cn forecas11 ng, ho \\ m:my rccn11h:r-, arc needed for the staffi ng e ffo rt?

3. Ho ,\ lo ng\\ Ill 1t 1ake 10 staff the new produc tio n line .'

Job O ffer t\ c-«r1cd

Hegan Pn:-Job T ra.1010~

EJ + ~ + ~ + FIGURE 5- 8 Sweet Tooth lnc.' s Staffing T1mel1n e

140 Clu('Ca 5 • Fom.» 110£ onJ PIJMtn~

Semester-Long Active Leaming Project C1..lf\1Jnut .. on.int oo the j\)b lf\JJ))b and 1.,,mrc:tt•oc'} m..,"1<'1 for lhe f'"l)JlJOn. \Isa Jr-.cnN' lhr f'~tth)O·s rtk , anl llb-.)r nurl.ct(Sl anJ pro,,Jc- J (~ ~ • W lut\.U't' l.J.t,,c(" w rrlJ (or Lhc f10'JtJon. ()c,cl\lp

an appro, imJtc omchnc co\cnng the ptnOO from Job P<htio l'IC',. h1rr N~1Ming "" ("'L.

1 to It

Case Study Assignment: Strategic Staffing at Chern's s« lh< ,rr,:oJi., oa &he N<.l of th< i,..,._,i. for Liu, cropu:r"s C,..-c S!lldy A»1somc11t

Endnotes • A1uit BLJ.:L lhlls Cllfl'l'"J11on." 8 /ac( H, /t, (0'710rot1o,1. ::OIJ. hnpJI~ ~" blxlh11lscorp.com/aboot

l Raner. \I v _ "'81g DJU. 81ggcr Deal ... UorLforrt Ma/1/Jgt mr,.,. Apn l ::013. 18-11 Youn~. \l 8 . Srro1,g1c \Vortfortt Plannmg 111 Global ~•""'· R«<:31th Working Group Rcpon R-IJ57- 09-RR. :-.e~ Yorl The Con fcn,nc, Boord. ::010

J ~C. IJ 1hAM,.,J G/obo/C£0 Sorm. 1012 5 Butler. ) E.. Fcrru.G R . onJ '-;ip,<r. -.; K . S1ro1tg)andH,,,,.,,

#lLJOUTtYJ \IW'liJ.Jf'm«'nl. C1oontu1J.OH South-Wntcm. 1991 6 "You W:ut Too Long to lhrc". /oc. September 2012 55

Sherr. I . · Appl< RCUII Oucf Admll.l Suffiog ~hsclc." n,, ll'a// S,r,,i J°"""". Augu;t 16. ::Oil hnpJ/oohnc ~ ,, rom1 ,ruclc/SB t0000871396) 90-IJ.lJ751 0J57759J27150512160'1 J1IJnl Johnson. W 8 . ..J Pxlcr. A E.. llo,t/orrt !OlXJ llor( and n ·o,t.rn for 1N 1/n CrnUJ.n . lnd1anJpoll.s. l'l' Hud.)On tn;oru1e. Inc. 19S7

9 H,nlliclJ-Joocs. H . ~hchx ls. E.. :,nJ A.\clroJ. 8 . "Tal<n• ~~ A CnuCIJ P>n of E, ay lnders Job." hc, 8w1Mu Jo..nw/. 66. 2 ('lo-,mbcr/Dcc<mbcr =001 ) H - 53

10 Bllbcocl.. P . "llunun u ptul Plann•ng ai Coming· \\or, Than i HoJ Counl, .. Sootl) for /111man Rtrourrr Managrml'nt, Man:h =oos. hnpJ/• ~ ~ ..lhrm orglcnulbllrary ..J>Ubh sh<d/ nonJC/OIS.0251J7 :i,,~ op()fl'agc

II Ibid. ll Bechel. T P. :md \lo ,JJ.a-. L W . "AhgrungSulling~1th 8us,nos

SltlllCgy." Human RtJourr, PlaMmg. 16. ) ( 199)) 1-16 IJ Ibid IJ Agr,~;il. V . \131\) IU. J ~I . :ind Richlnls. J E.. "Motel.mg

People lo Jobs ... Mr K111.u-\ QuorUrl\ . J , 2 (2003) 71- 79 15 Addis. 8 .. ·use Worlfoi<r Planmng •o Bu,IJ a lnn

Organ.1LJ1.1on: Talrnr \fanagm 1, nt Mag~r. JunC" 2012 ~ )6 16 \los.~ B H .. --110..., 10 Build II Worl!Of'C'c. ()1)( Pcnon ~I a

Time.- IIR Mata:..IN. June :'.012. 66-68 17 Bond. G . · Jobs Los• 11> ll 1gh DollM H1t.1 Elponrn." N,.,.

llaland lluald. hnui11)' 24. 2006, ..., v. v. nzhcr.lJd.co rul!i«OOn/ story cCm'c .. ,d=•&obJ<CUd= IOJ650')7

18 Turollc. J D. "Ob>rnac= o lluse Boon For Temp Stalling Compmics..- Rr<JJo n.ront. \larch 26. 1013. hnpJ/rcason ct ml btogr-o ll/OJl.!61olxlmx.u<-• -hugc-boon-for-1Cmp->1affing

19 Oa\ls. S . "EAl"lr1> Can Sf'lr Our f.conomi." UPS Up,t:I, . Ottcmbcr IJ . ::OIO. hupJAilogup,conv'.OU~l:1 1.llc.ponxan ·'rur-oor-a:onom) I

W Schnculcr. C . " The 'le• llum.,.n.Capttal \IM "." CFO Masa:.,n,. Fcbrull) 15. 2006. ""'°""' cfo com/amdc dm/SJ9 10-l 1/l/c_298-C8J"f =arc-ht\ ei

21 Mm1on-E,cDOMC', T , "Rc-pon EmplO)C'ri Rcfocu~ on S WorHorr< Planmng as Economy Rcco,c,s." Soc ""'i>c Human Rr101,rrt Managrmtnt, February 22. 2010 hu '; /o, shrm org/hrd1 t.c1pl1ncs/staffingmanagcmcnVAn;clc~ .,,._•

Emplo)ersRcfocu~Workfortc-Planning asp, •ttv 2!. Young. Strot,g1t' Worl..foru Plamwrg III Global Organi.:,a 23 Dudley. R . "What Good llIC Low Pnccs ,r •he Shel,:,

Empty.'' Dloom1Hr1 B11smtSJhuk. April 1-7. 2013· 23-!• lit 1J tlcncm,n. 11 G . Ill . ond S:111<hcr. ~I H . "M:mov Anal)llli

Human Rc\OUJ'CI! Adm1mstrauon Appl1cauons and LI mu~• Arodt,n\ o/Manogrnrtm Rt\lt'W, 2 ( 1977) SJS-542.

25 -..e~ Yon Sta•c D<p.,nmcn• of C/\11 Smicc. "\!w- and Mob1lll) Pun 111- L'>lng E,i,11ng Tool.!; " IVorl. F..., and Sutttn,on Plannmt, September 2002. '-"WW cs i tllt.a,., succcss1onplann1ng/v.orl group'M~l anagcmcnt.tnd\tobdu) >l•lls,n, cnlOI} h•ml

16 \lalj l hma. E . "SupplJmg Labor to M<:<1 D<mao.l" lnfo mumon\Vrrt M:irch 21. 100S. ~~w 1nfontW1omt.cn. roml>t<'T)"ho~Arucle Jh•mt':u11clclD= 159902302

27 l~1d 28 Weber. ~I . " Th< Labor Pool Becomes a Supply a.._·

/,uJu,1naJ Managrmrn1. JS. 4 (2006) 20-25 19 Wcnhcr. W 8 , Jr . llOO O J \'I \. K • U wnan RtSOilTftJ 9'

Pmo,u,e/ MQ/1/Jg,ment (5th cd ). NC\\ Yorl McGra~-H,IL Jlll JO \tun.son. H . \'alum1 Elprnr ,,cr l/0 11 to Motn·art and R.t"-

Moiurr tvo,,m. Rcpon •1329-0J-RR. 11,c Coofmncc Bllllll Apn l 2003. ~ v. w conrcrcncc-boJrd.org

J I Sch1 ldhousc. J • "Wo, k,ng I lard •o A, 01d lhc Labor Shm.lf Jn11dr l 11p11h Ma11agm 1rnt, 11. 3 {~larch :!006) 22

Jl Gale. S F . ·-compm1"' S•rugglc •o Rrcruu •ntcmllJOIWi) \Voriforu. \ IJ.rth 4, 10 13. hllpl/v.w" v. l)r\.forcrccn oruclc/201 JOJO.l/','EWS02/IJOJ09985/comp;rn1c, ,.,mrt,,n Ir\ •ilohaJ-rcrn.uung 1s commc-ci.comrne•:i

JJ llamcn. F .. .. Fc~I nnJ FJmme in Rc."Cru1u ng or Pro(c-<-\111'\lh • WorlJorrt \/anagonrnr (),1/mr . Apnl 2006. """ v, ()O.fCfU: comlarch/\ dfca•un:fl~/J-11161,nJn php

JJ -~hcro,on Lmcns •o Colk F< Student<. Facull) a, Bill G,u, V1sns Top IT and Enr inc-cn n~ Collc~cs " M,r,owft rn Pass. October 12. :!005. " "" m,crosoftcomlJ'f"''I\P fe,•urul2005/oct05110-11CJmr u, m<r<

JS Arrnd. M , "Campu, Cuhurc." 5,rr ';r/u lll'II Mu~....:, June 28 . .?001

36 Amcncan ~ urs,ng Asu, 1.11t0n Nurw,g 1 \ i:rr1Jo for H Fmurr. ~002. hup //nul"mg" orld org/nar

J7 Sch1IJhou~. "\\ orl mp llard hl 1\\ 01J thi: Labor Sh~1nJft 38 Thi$ scc11on h bJ\e-d m p.1n on Dirrctor. S M • anJ Ct,11:' -..

J , Srqffi,,g Htsran I, ltuffi,i ~ Stratt'g\ o, rr tlit /J1dmtu ( \, It

s ttRM Research Repon 05-0551 . Alrnindna. VA s oc,e1y ro, ttum>l1 Rcsoun:c M•nagcm<nt. 2005

w ,~.~ .kl o ·s nm •. S M . "Corporate G/\1ng More Bang for the Buel :

~,p1,.,grr. Augull IJ. 2001. hupJ/,pro:,J L,p~ng<rcomlhr/ ,toncsAorpor.uc_g" ln&.b<. morc_ banll..for_•hc_ hucl<.html

J I c ro~cll. B anJ Ka)<, B • • Please tn, :,dc My Spxc;· fo/r,u \tanngrmr11t Magu:.mt. October 20 12 28-29. 48

Jl ,1in1on-EH•r.onc. "Report Emplo)trs Refocus on Stn.tcgtc \\ or~forcc Planning as Economy Reco\cn ..

J l ·-r••cn•Sho<U!;<Slo• sO,ITtxh." R,dH,mn1.~lay 14.2006.~•w ,tJJICfTlng rom/An1clc.asp, ' a=168~hcd=Tal<,u+ Shoru8c+ Slo• S .O,l+Tcch•

,u Engard10. P . "Pcn)lc's Off>horc Pa.non in lnd1.i.- H111111 ru\\'rtA. 011/mt, January 30, :!<X>6. \\Yow bu~IOCM Yo l"CL

00 m1nuga11nc/coo•cntl06_05A>J969J 14 h•m.

JS Sec Rigby, 0 , "Look Before You La)off," Han-ard Buwin.J R<' ""· 80. 4 (2002) 20-2 1

.l6 Bro•n. J . "Eoough ""h the Just ,n lime Schedules. Say RCLlll Wrd,L-n, .. /Aber No1,s. November 19. 2012, hllpJfaww labor nou,, ~O I 1/1 l/cnough•jU5••t1mc-schcdulcs-s:1y-nct11••"orlm.

J1 M,iloff. N. ··o cbunkmg the M)th of• Desperate son""" LabOr Shonagc.- Tcsumony 10 the U.S House Jud1c1ary Commincc Subcommincc on lmm1gratJon. Pt~ntcd Apnl 21. 1998. updJtcd September 27. 1999

.&8 fl J\\k, R II . Tlir Ruruttmrnt F1mct,on. Ney, York. Ac:w.km) or MJ11Jgcmcn1 As)oc1at.1on. 1967

49 for mo1t informauon. scc the Saratoga scC1ton or the Pn«W11crhou~oopcrs Web site 31 "'"'~ pv.ccomlc,r.1~eb/ '"" ,cc nsfldoc1d/0516cJ6c9a61714985~6cb3007lr-cd5

Chapters • Forcc~lmg ond Planning 141

50 From Da\ld>on. 8 . "Hiring an Emplo)<C How Much 0 Docs I•

Co;tr' IVorlforr, ."" w " orlfortt comlorch1\'dfeanm:J22/25/58/

223946 php SI Ibid .. 52 V.indc,Mcy. A~ ... n,IJc Google"• Rccrulltng Machine;

CNVMon,i . FcbOJllt)' 24 .2012. hllpJl•cch.fortunun n com/2011/

O:!l'..-1/google-rccnuuni;/ 5J Sec Staffi ng org for addauonal rn formauon on this mctnc S4 Burlholdcr. N ... llo~ Many Rccnntcrs Do We Need and \Vh;st

llaprcncd •o Ahcc-r· S10Jfing org. Apnl 23. 2003 55 Ross. J and Werner. K . "Staffing M<1n cs. •Time •o Fill' Can

Ki ll J>rMpccu or Landing Top Talent," So<,rty for Huma,1 Rt.wurct Mw1a1,mtnt, January 18. 2012. hupJ/~W\I. shrm orefhrd1sc1phncilswlingm11nili;tfflCnt/art1cles/p.3gcYumctofill

cantr..1llland1ngtop1aknL~p.l 56 Rafter. "Big DalD. Bigger O<;il .. 57 Ibid 58 --~rgy Production." 8/ork lb/ls Corpo,a1,o,1. 20 13. h11 pJ/

"v,,,w blac.L:h1llscorp.comluul1uc.s•bUS1nes~cncrg)'·ProducLion 59 Raflcr. "01g OalD. Bigger Deal .. 60. •bid 61 Andn::" s. O R . 1'hc Nur..c: M wugcr JobSatisfaction.lhc Nun1ng

Shaiagc. Bnd Retenti on." Joumal of Nursing !,fonagrmtnl, 13. 4

(July 2005) 286-295. 62 .. AACN Conccmcd ttut Rccommend.Juons m the Prc51dcnt's

FY 2008 Budget Request Would Heighten the Nauon ' s Nur5mg Shorugc," Amtnca,1 J\.wx1at1on of CoJltgts of Nunmg. Fc~ruat) 9. 2007 . ~•w oxn nchc cdu/FYOSBudgctRcqucs• htm