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Course Learning Outcomes for Unit

Upon completion of this unit, students should be able to:

1. Explain the importance of all components of staffing. 1.1 Explore the staffing planning process. 1.2 Discuss the workforce planning process and how it affects future business activities. 1.3 Explain steps taken for an organization to forecast its workforce supply and demand. .

7. Compare and contrast internal and external selection decisions. 7.1 Contrast internal and external forecasting decisions.

Course/Unit Learning Outcomes

Learning Activity

1.1 Unit Lesson Chapter 5 Unit IV Article Critique

1.2 Unit Lesson Chapter 5 Unit IV Article Critique

1.3 Unit Lesson Chapter 5 Unit IV Article Critique

7.1 Unit Lesson Chapter 5 Unit IV Article Critique

Reading Assignment

Chapter 5: Forecasting and Planning

UNIT STUDY GUIDE

Talent Forecasting and Planning

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Unit Lesson

In Unit III, you were introduced to job analysis and the results of a job analysis. It is important to understand that job analysis results lead to job specifications and job descriptions. By having valid job descriptions, an organization can begin to look at current trends and vacancies and begin to prepare to meet the organizational needs.

Within this unit, you will be introduced to forecasting, planning, and staffing to meet organizational needs. You should be able to gain an understanding of the importance of forecasting, planning, and staffing. Emphasis is placed on workforce planning. Key areas that will be introduced include forecasting a firm’s labor supply and demand, the gaps between the two, and staffing planning.

Most employees do not realize the impact workforce forecasting, planning, and staffing have on the success of staffing organizations. Although recruiting, selection, and employment are key components of staffing, the continuation and success of the organization relies heavily on workforce forecasting and planning.

Organizations must consider both internal and external factors when forecasting. Some of the internal factors include current staffing ratios, current profit margins, and turnover rates, and the external factors include competitors, the economy, the season (in or out), and customer demands, to name a few.

Even after a company opens for business, management and human resources (HR) are always looking at the workforce supply and demand. Many employees do not consider all that is required to ensure that workforce needs are accurate and do not cause the company to lose profits. One may ask, how does this happen? Those involved in the planning process must have a sound knowledge of the company’s business strategy. They must also have a clear understanding of the strategic staffing goals. It is important for HR to be viewed as a strategic business partner and given the opportunity to assist with the workforce planning process.

According to the reading in Chapter 5, the workforce planning process typically includes the following five steps (Phillips & Gully, 2015).

This is addressed in full detail within the reading in Chapter 5. However, to provide a brief overview, the workforce planning process consists of a group of tasks and steps that many organizations utilize to help predict workforce needs (both short term and long term). Short-term needs consist of ideas and issues to be addressed within the current year or the upcoming year. Long-term needs are predictions for a multi-year period. Some areas looked at within the workforce planning process include planning sourcing, recruiting,

Identify the busines

strategy of the organization.

Ensure understanding

of the organization's

talent philosophy and

staffing decisions.

Conduct a workforce analysis.

Make sure that action plans

are developed and

implemented.

Evaluate and revise the

action plan and forecasts as necessary.

(Phillips & Gully, 2015)

There are many elements of workforce planning that will be explored in this unit. (Vaeenma, n.d.)

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development, and separation activities. Keep in mind it is very rare for organizations to get exact figures during this process. Because numbers may not be exact, many organizations view predictions and utilize the results based on a range (e.g., forecasting may show a demand to hire 10 more people; however, the company may decide to consider a range of 6 to 12, allowing them wiggle room if needed). Also, although organizations should look at all areas within the organization, because of time and resources, many organizations only look at what they consider to be critical positions. These positions are typically those that would cost the company a loss in revenue if left vacant too long and if there is not enough manpower in the position to meet the supply and demand.

Being proactive is very important when forecasting. This helps companies provide more accurate needs for the organization. The positive side of accurate forecasting leads to the following:

 reduction in the need for layoffs,

 reduction in the need to hire in a hurry, and

 reduction in labor costs (Phillips & Gully, 2015).

By contrast, poor or improper forecasting can have a negative impact on the organization if not done correctly. It is better for the organization to identify staffing needs early because it helps to reduce the abundance of employees that are not needed, which ultimately leads to employees being laid off. When forecasts are correctly predicted, the company saves money because turnover is maintained. Each position the company has to recruit, interview, hire, and train can cost the company thousands of dollars. Workforce planning can impact staffing needs, which leads to recruiting and selecting the right people.

In terms of staffing planning, there are three key questions that must be addressed:

How many people should be recruited? It is important for the organization to have enough qualified candidates from which to select. A poor candidate pool can lead to the selection of subpar candidates or positions not being filled. This ultimately can have a negative impact on the organization. If the organization decides to hire subpar candidates, this could lead to poor production and frequent turnover. Of course, both of these would cause a negative impact on the organization.

Just as it is important to have enough candidates, it is also important to ensure the organization does not over predict and does have a realistic staffing goal. Over prediction could lead to layoffs, which could also ultimately impact production.

What resources are needed? A big determining factor will be based on if the organization utilizes internal or external hiring. The organization must now consider the methods to use for recruiting. When making this decision, the organization must consider the costs associated with recruiting. What method would work best? Some organizations prefer to utilize staffing services that may charge per diems or bill rates. As discussed in previous units, these employees are not considered employees of the organization but are contingent/temporary workers.

Depending on the position, some organizations may decide to utilize employee referrals. This of course can be motivating for current employees; however, there is a cost associated with this type of recruitment.

If hiring externally, the organization must consider costs associated with candidate travel. Is the organization willing and able to pay for a candidate to come in for an interview? Such costs could include airline fare, hotel accommodations, and food. If the organization decides to hire an external candidate, the organization must also decide if it will be able to pay relocation. A set amount should be identified and communicated to the external candidate prior to relocating. This will eliminate any misunderstanding in regards to the relocation package.

Some organizations may choose to hire internally. When hiring internally, the above items are considered and used in determining what would be the most beneficial and cost-effective approach for the organization.

How much time will it take to hire the employees? When people apply for jobs, most apply for more than one job at a time. Because of this, it is important for organizations to be prepared to make hiring decisions rather quickly. The entire hiring process could be very lengthy. It is not uncommon for the hiring process to take 30 plus days. Keep in mind this time span varies depending on the type of position. When recruiting/hiring for senior level positions, the time span can increase by 30 to 60 days (Phillips & Gully,

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Title 2015). Many people think the hiring process starts once the offer is made; however, this is so far from being accurate. An example of a typical hiring timeline is shared in Figure 5-7 in the textbook.

When organizations consider these questions, they are able to have a realistic view of the entire hiring process. This relates to the labor supply and demand as well as the forecasted results. When considering all information, the organization can also decide how to fill the gaps, based on type of talent available. This will require the HR staff to consider various things to include the following questions.

 Is the organization hiring seasonal employees or full-time employees?

 Is the organization looking to hire for an established location or a new and upcoming location?

Forecasting and planning does have an immediate impact on organization staffing. As you continue to read through Chapter 5, think about the processes your organization utilize. Does your organization utilize forecasting and planning for staffing? Does your organization utilize the workforce planning process? Are the three key questions considered?

References

Phillips, J. M., & Gully, S.M. (2015). Strategic staffing (3rd ed.). Hoboken, NJ: Pearson.

Vaeenma. (n.d.). Workforce Planning Targets (ID 117562342) [Image]. Retrieved from https://www.dreamstime.com/woman-presenting-workforce-planning-targets-workforce-planning- targets-image117562342