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# The Process of Human Resource Planning

• Organizations need to do human resource planning so they can meet business objectives and gain a competitive advantage over competitors.
– Human resource planning compares the present state of the organization with its goals for the future – Then identifies what changes it must make in its human resources to meet those goals

Overview of the Human Resource Planning Process .

Forecasting the demand for labor and to predict areas 2. 1. Determining labor surpluses and shortages . Determining labor within the organization supply where there will be labor shortages or surpluses.Human Resource Forecasting • HR Forecasting attempts There are three major to determine the supply steps to forecasting: and demand for various types of human resources. 3.

HUMAN RESOURCE PLANNING FORECASTING HR REQUIREMENTS (DEMAND ANALYSIS) (Trying to predict future staffing needs) Managerial Estimates Sales Projections Simulations Vacancy Analysis (projected turnover) FORECASTING HR AVAILABILITY (SUPPLY ANALYSIS) (Predicting worker flows and availabilities) Succession or Replacement Charts Skills Inventories (use of HRIS) Labor Market Analysis Markov Analysis (Transition Matrix) Personnel Ratios .

given relatively objective statistics from the previous year.Forecasting the Demand for Labor Trend Analysis • Constructing and applying statistical models that predict labor demand for the next year. . Leading Indicators • Objective measures that accurately predict future labor demand.

CORRELATIONS/PROJECTIONS SIZE OF HOSPITAL NUMBER OF NURSES 200 300 400 500 600 700 800 900 240 260 470 500 620 660 820 860 .

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 = 8 + .00004(150.000sq ft) + .00004(X2) + .SIMULATION MODEL/REGRESSION FORECAST TARGET STORES STAFFING FORECAST MODEL Y = 8 + .00000002(\$850 million) Y = 8 + 55 + 6 + 17 Y = 86 employees needed at this store .000popul) + .0011(X1) + .0011(50.

VACANCY ANALYSIS Historic departures used to project turnover LEVEL # EMPL TURN % Expected Vacancies Expected to Remain TOP MGMT MID MGMT LOW MGMT 100 200 600 20 % 24 % 22 % 20 48 132 80 152 468 SKILLED W ASSY WKRS 600 2000 16% 12 % 96 240 504 1760 TOTALS 3500 536 2964 AVERAGE TURNOVER PERCENTAGE = 536 / 3500 = .1531 .

• 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.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. “Where did people now in each job category come from? • Personnel / Yield Ratios How much work will it take to recruit one new accountant? . “Where did people in each job category go?” 2. It answers two questions: 1.

California Sales Manager Idaho/Utah Sales Manager Seattle Area Sales Manager Outstanding Outstanding Satisfactory Satisfactory Ready Now Needs Training Needs Training Questionable ------------------------------------------------------------------------- .SUCCESSION PLANNING REPLACEMENT CHART FOR EXECUTIVE POSITIONS POSITION REPLACEMENT CARDS FOR EACH INDIVIDUAL POSITION ------------------------------------------------------------------------ POSITION DANIEL BEALER POSSIBLE CANDIDATES WESTERN DIVISION SALES MANAGER Western Division Sales Mgr CURRENT POSITION Outstanding PRESENT PERFORMANCE Ready Now PROMOTION POTENTIAL SHARON GREEN GEORGE WEI HARRY SHOW TRAVIS WOOD Western Oregon Sales Manager N.

upward mobility and growth in the company . Promotions received. Certifications Languages spoken. Specialty skills Ability/knowledge to operate specific machines/equipment/software JOB HISTORY Job Titles held. Time in each position. Marital status.HUMAN RESOURCE INFORMATION SYSTEMS (HRIS) PERSONAL DATA Age. Gender. Performance appraisals. etc. Training & Development MEMBERSHIPS & ACHIEVEMENTS Professional Associations. Licenses. Types of positions sought Geographic preferences CAPACITY FOR GROWTH Potential for advancement. Dependents. Location in Company. etc EDUCATION & SKILLS Degrees earned. Recognition and Notable accomplishments PREFERENCES & INTERESTS Career goals.

Transition Matrix Example for an Auto Parts Manufacturer .

01 .15 .15 ASSY .07 ------------------------------------------ .06 A TRANSITION MATRIX LOW SKILLED ASSY EXIT .76 .01 .84 .MARKOV ANALYSIS (STATISTICAL REPLACEMENT ANALYSIS) TO:  FROM: TOP TOP MID LOW SKILL .80 .88 .05 .02 .18 .10 MID .04 .78 .10 .

15 .10 A TRANSITION MATRIX MID LOW SKILLED .01 .07 --------------------------------------------------------- END YR WITH: NEED RECRUITS ? NEED LAYOFFS ? 100 0 190 10 482 118 610 (10)* 1760 240* [358 left] 368 tot (10) tot KEEP STABLE 100 200 600 600 2000 = 3500 Tot .76 .06 .88 .02 .78 .05 .10 .01 .15 SKILL 600 ASSY 2000 .MARKOV ANALYSIS – 2 (Captures effects of internal transfers) (Start = 3500) FROM/ TO:  TOP 100 MID LOW 200 600 TOP .04 .84 ASSY EXIT .80 .18 .

18 MID 200 .04 .88 . and a 15% decrease in assembly workers (1700) by year’s end.84 .MARKOV ANALYSIS – 3 (Anticipates Changes in Employment Levels) Employment needs are changing.10 LOW 600 .01 .78 .15 SKILL 600 .15 ASSY 2000 .02 .07 --------------------------------------------------------END YR WITH: NEED RECRUITS ? NEED LAYOFFS ? 100 0 190 10 482 118 610 50* 1760 (60)* [358 left] NEW LEVELS 100 200 600 600 1700 = 3260 tot . ------------------------------------------------------(Start = 3500) A TRANSITION MATRIX FROM/ TO:  TOP MID LOW SKILLED ASSY EXIT TOP 100 .10 .05 . We need a 10% increase in skilled workers (660).76 .06 .01 .80 .

• Determining expected shortages and surpluses allows the organization to plan how to address these challenges.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.

ONLY 1 LOOKS PROMISING ENOUGH TO INVITE FOR AN INTERVIEW OF EVERY 5 PERSONS INTERVIEWED. so that 1.11 PEOPLE MUST BE TRAINED. so that we get ONE NEW COST ACCOUNTANT!!! .PERSONNEL / YIELD RATIOS Past experience has developed these yield ratios for recruiting a Cost Accountant: FOR EVERY 12 APPLICATIONS RECEIVED. ONLY 2 ACCEPT THE POSITION OF EVERY 10 NEW WORKERS WHO BEGIN THE TRAINING PROGRAM. so that 8. and 1.33 JOB INTERVIEWS CAN BE HELD. ONLY 9 SUCCESSFULLY COMPLETE THE PROGRAM THUS: 100 APPLICATIONS MUST BE RECEIVED.67 JOB OFFERS CAN BE MADE. ONLY 1 IS ACTUALLY OFFERED A POSITION IN THE ORGANIZATION OF EVERY 3 JOB OFFERS MADE.

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