Human Resource Planning
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- Erik Ross
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1 Human Resource Planning HR Planners attempt to determine the supply and demand for various types of human resources (labor), and to predict which areas within the organization will experience labor shortages or surpluses. This prediction process is also called HR Forecasting. There are three major steps to HR Forecasting: Forecasting the demand for labor WHERE WILL THERE BE OPENINGS IN OUR ORGANIZATION? Determining labor supply WHERE CAN WE FIND CANDIDATES TO FILL THESE OPENINGS? Determining labor surpluses and shortages ARE WE OVERSTAFFED IN SOME AREAS?
2 HUMAN RESOURCE PLANNING FORECASTING HR REQUIREMENTS (DEMAND ANALYSIS) (Trying to predict future staffing needs) Managerial Estimates (who is leaving?) Trend projections (using demand, sales) Simulation models Vacancy Analysis (projected turnover based on past history) FORECASTING HR AVAILABILITY (SUPPLY ANALYSIS) (Predicting worker flows and availabilities) Succession or Replacement Charts Skills Inventories (use of HRIS) Markov Analysis (Transition Matrix) Personnel Ratios
3 Forecasting the Demand for Labor Trend Analysis Constructing and applying statistical models that predict labor demand for the next year, given relatively objective statistics from the previous year. Leading Indicators Objective measures that accurately predict future labor demand.
4 SIMULATION MODEL/REGRESSION FORECAST TARGET STORES STAFFING FORECAST MODEL Y = (X1) (X2) +.02(X3) Y = Number of employees needed to staff the store X1 = Square feet of sales space X2 = Population of metropolitan area X3 = Projected annual disposable income in millions of dollars Y = (50,000sq ft) (150,000popul) ($850 million) Y = Y = 86 employees needed at this store
5 VACANCY ANALYSIS Historic departures used to project turnover LEVEL # EMPL TURN % Expected Vacancies Expected to Remain TOP MGMT % MID MGMT % LOW MGMT % SKILLED W % ASSY WKRS % TOTALS AVERAGE TURNOVER PERCENTAGE = 536 / 3500 =.1531
6 Determining Labor Supply Predicting Worker Flows and Availabilities Succession or Replacement Charts Who has been groomed/developed and is ready for promotion right NOW? Human Resource Information Systems (HRIS) An employee database that can be searched when vacancies occur. Transition Matrices (Markov Analysis) A chart that lists job categories held in one period and shows the proportion of employees in each of those job categories in a future period. It answers two questions: 1. Where did people in each job category go? 2. Where did people now in each job category come from? Personnel / Yield Ratios How much work will it take to recruit one new accountant?
7 SUCCESSION PLANNING REPLACEMENT CHART FOR EXECUTIVE POSITIONS POSITION REPLACEMENT CARDS FOR EACH INDIVIDUAL POSITION POSITION WESTERN DIVISION SALES MANAGER DANIEL BEALER Western Division Sales Mgr Outstanding Ready Now PRESENT PROMOTION POSSIBLE CANDIDATES CURRENT POSITION PERFORMANCE POTENTIAL SHARON GREEN Western Oregon Sales Manager Outstanding Ready Now GEORGE WEI N. California Sales Manager Outstanding Needs Training HARRY SHOW Idaho/Utah Sales Manager Satisfactory Needs Training TRAVIS WOOD Seattle Area Sales Manager Satisfactory Questionable
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9 HUMAN RESOURCE INFORMATION SYSTEMS (HRIS) PERSONAL DATA Age, Gender, Dependents, Marital status, etc EDUCATION & SKILLS Degrees earned, Licenses, Certifications Languages spoken, Specialty skills Ability/knowledge to operate specific machines/equipment/software JOB HISTORY Job Titles held, Location in Company, Time in each position, etc. Performance appraisals, Promotions received, Training & Development MEMBERSHIPS & ACHIEVEMENTS Professional Associations, Recognition and Notable accomplishments PREFERENCES & INTERESTS Career goals, Types of positions sought Geographic preferences CAPACITY FOR GROWTH Potential for advancement, upward mobility and growth in the company
10 Transition Matrix Example for an Auto Parts Manufacturer
11 Forecasting the Supply of Employees: Internal Labor Supply 1 11
12 MARKOV ANALYSIS (STATISTICAL REPLACEMENT ANALYSIS) FROM: TO: A TRANSITION MATRIX TOP MID LOW SKILLED ASSY EXIT TOP MID LOW SKILL ASSY
13 MARKOV ANALYSIS 2 (Captures effects of internal transfers) (Start = 3500) A TRANSITION MATRIX FROM/ TO: TOP MID LOW SKILLED ASSY EXIT TOP MID LOW SKILL ASSY END YR WITH: [358 left] NEED RECRUITS? * 368 tot NEED LAYOFFS? (10)* (10) tot KEEP STABLE = 3500 Tot
14 MARKOV ANALYSIS 3 (Anticipates Changes in Employment Levels) Employment needs are changing. We need a 10% increase in skilled workers (660), and a 15% decrease in assembly workers (1700) by year s end (Start = 3500) A TRANSITION MATRIX FROM/ TO: TOP MID LOW SKILLED ASSY EXIT TOP MID LOW SKILL ASSY END YR WITH: [358 left] NEED RECRUITS? * NEED LAYOFFS? (60)* NEW LEVELS = 3260 tot
15 PERSONNEL / YIELD RATIOS Past experience has developed these yield ratios for recruiting a Cost Accountant: FOR EVERY 12 APPLICATIONS RECEIVED, ONLY 1 LOOKS PROMISING ENOUGH TO INVITE FOR AN INTERVIEW OF EVERY 5 PERSONS INTERVIEWED, ONLY 1 IS ACTUALLY OFFERED A POSITION IN THE ORGANIZATION OF EVERY 3 JOB OFFERS MADE, ONLY 2 ACCEPT THE POSITION OF EVERY 10 NEW WORKERS WHO BEGIN THE TRAINING PROGRAM, ONLY 9 SUCCESSFULLY COMPLETE THE PROGRAM THUS: 100 APPLICATIONS MUST BE RECEIVED, so that 8.33 JOB INTERVIEWS CAN BE HELD, so that 1.67 JOB OFFERS CAN BE MADE, and 1.11 PEOPLE MUST BE TRAINED, so that we get ONE NEW COST ACCOUNTANT!!!
16 Determining Labor Surplus or Shortage Based on the forecasts for labor demand and supply, the planner can compare the figures to determine whether there will be a shortage or surplus of labor for each job category. Determining expected shortages and surpluses allows the organization to plan how to address these challenges. How much recruiting will we really have to do?
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