Staffing Organizations

Chapter 3:
Planning

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 Learning Objectives for Chapter 3
• Recognize external influences that will shape the planning
process
• Understand how strategic plans integrate with staffing plans
• Become familiar with statistical and judgmental techniques
for forecasting HR requirements and availabilities
• Know the similarities and differences between replacement
and succession planning
• Understand the advantages and disadvantages of core
workforce, flexible workforce, and outsourcing strategies for
different groups of employees
• Learn how to incorporate diversity into the planning process
• Recognize the fundamental components of an affirmative
action plan
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 Planning 1
Internal and External Influences

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 Internal Influences on Staffing
• Organizational strategy
• Current financial and human resources
• Demand for products and/or services
• Competitors and partners
• Financial and marketing goals

• Organizational culture
• Expressed vision of executives
• Degree of hierarchy and bureaucracy
• Style of communication

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 External Influences on Staffing
• Labor markets
• Labor demand
• Labor supply
• Labor shortages and surpluses
• Employment arrangements

• Technology
• Elimination of jobs
• Creation of jobs
• Changes in skill requirements

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 Internal Versus External Staffing

Advantages Disadvantages
Internal • Positive employee reactions to • No new KSAOs into the organization
promotion from within • May perpetuate current
Table• divided into
Quick method two sections
to identify job of two columns each
underrepresentation of minorities and
applicants
summarizes staffing philosophy: Internal women versus
• Less expensive • Small labor market to recruit from
external
• Lessstaffing. The
time required firstfullsection•summarizes
to reach internal
Inexperienced employees may require
staffing. The second section summarizes
productivity external
more training time
Externa • Brings
staffing. The in employees
columnwith new KSAOs
headers are • Negative as:
marked reaction by internal
• Larger number of minorities and applicants
Advantages
women to and
drawdisadvantages.
from • Time-consuming to identify applicants
• Large labor market to draw from • Expensive to search external labor
• Experienced employees may require market
less training time • More time required to reach full
productivity

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 Major Workforce Trends
• Creating better relationships between workers and
technology
• Continuing high cost of health care in the United States
• Increased use of flexible work schedules
• Increased attention to mental health issues
• Addressing workforce skills gaps
• Preparing the newest generations of workers for the
workforce
• Preventing burnout due to constant contact outside of regular
work hours
• Greater need for cross-cultural understanding in business
settings

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 Discussion Questions 1
• What are ways in which the organization can minimize KSAO
deficiencies in its workforce?
• What are the potential limitations and benefits of HR and
staffing planning? What costs might be incurred in the
process of HR and staffing planning (e.g., staff time gathering
and communicating information)?

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 Planning 2
Human Resource Planning

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 Strategic Planning
• Key considerations in strategic planning
• A vision based on organizational values and core competencies
• Strategies for achieving planning process goals
• Contingency plans
• Methods for measuring performance relative to goals and objectives

• Implications of planning process

• Current and future competencies demanded
• Planning time frame
• Roles and responsibilities

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 The Basic Elements of Human Resource
Planning 1

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 HRP: Forecasting Requirements 1
• Statistical techniques
• Trend analysis
• Ratio analysis
• Regression analysis

• Judgmental techniques
• “Top-down” approach
• “Bottom-up” approach

• Scenario planning
• Incorporating manager judgment of potential future outcomes into
statistical models

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 HRP: Forecasting Requirements 2
Trend Analysis
1. Gather data on staffing levels over time and arrange in a spreadsheet with one column for
employment levels and another column for time.
2. Predict trend in employee demand by fitting a line to trends in historical staffing levels over
time (this can be done by using regression or graphical methods in most spreadsheet
programs).
3. Calculate period demand index by dividing each period’s demand by the average annual
demand.
Example: January demand index = Avg. January FTE/Avg. annual FTE
4. Multiply the previous year’s FTEs by the trend figure, then multiply this figure by the period’s
demand index.
Example: A retail store finds that the average number of employees over the past five
years has been 142, 146, 150, 155, and 160. This represents a consistent 3% increase per
year; to predict the next year’s average demand, multiply 160 by 1.03 to show a 3%
expected increase. Over this same time period, the store averaged 150 FTEs per month,
with an average of 200 FTEs in December. This means the December demand index is
200/150 = 1.33, so its estimate for next year’s
December FTE demand will be (160 × 1.03) × 1.3 = 219 FTEs.
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 HRP: Forecasting Requirements 3
Ratio Analysis
1. Examine historical ratios involving workforce size.

2. Assume ratio will be true in future.

3. Use ratio to predict future HR requirements.

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 HRP: Forecasting Requirements 4
Regression Analysis
1. Statistically identify historical predictors of workforce size.

2. Only use equations with predictors found to be statistically significant.

3. Predict future HR requirements, using equation.

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 The Basic Elements of Human Resource
Planning 2

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 HRP: Forecasting Availabilities
• External market availabilities
• Uses techniques of trend analysis and regression analysis
• Incorporate data from the Bureau of Labor Statistics

• Internal market availabilities

• Markov analysis
• Judgmental techniques

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 Use of Markov Analysis to Forecast Availability

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 Reconciliation and Gaps

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 Human Resource Planning
Reconciliation and Gaps Action Planning
• Coming to grips with • Set objectives
projected gaps • Generate alternative
• Likely reasons for gaps activities
• Assessing future • Assess alternative
implications activities
• Choose alternative
activities

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 Operational Format for Human Resource
Planning

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 Discussion Questions 2
• Why are decisions about job categories
and levels so critical to the conduct and
results of HRP?
• What is meant by reconciliation, and why
can it be useful as an input to staffing
planning?

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 Planning 3
Staffing Planning

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 Staffing Planning Process
• Staffing objectives
• Quantitative objectives
• Qualitative objectives
• Generate alternative staffing activities
• Staffing alternatives to deal with employee
shortages and surpluses

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 Staffing Alternatives to Deal With Employee
Shortages and Surpluses

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 Core Versus Flexible Workforce
Core workforce Flexible workforce
• Advantages • Includes staffing firms and
contractors
• Stability
• Advantages
• Continuity • Flexibility to address changing
demand conditions
• Predictability
• Quickly staff new areas
• Sense of commitment
• Fill in for core workers
• Disadvantages • Disadvantages
• Locked in relationship • Lower commitment
• Lower helping, creative
• Reduced flexibility suggestions, or extra effort
• Less inflow of new ideas • Potential friction with core
workers

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 Factors to Consider When Choosing a Staffing Firm
• Agency and its reputation
• Types of workers
• Planning and lead time
• Services: recruiting, selection, training, wages and benefits,
supervision
• Worker effectiveness
• Cost

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 Staffing Planning: Outsourcing
• Advantages
• Disadvantages
• Special issues
• Employer concerns regarding working conditions
• Loss of control over quality
• Offshoring

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 Discussion Questions 3
• What criteria would you suggest
using for assessing the staffing
alternatives related to dealing with
employee shortages and surpluses?

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 Planning 4
Individual Internal Staffing Plans

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 Replacement Chart

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 Succession Plan
Organizational Unit: Merchandising—Soft Goods
Department: Menswear
Position to Be Filled: Department Sales Manager (A2)
Leadership Competencies Required
• Plan work unit activities
• Budget preparation and monitoring
• Performance management of sales associates

Eligible Promotability
Replacement Rating Competency Gaps Development Plans
Table divided
S. Williams into
Ready now four columns
Budget prepsummarizes succession
Now completing in-houseplan
training
course
example. The column headers are marked from left to right as:
L. Stemke Ready in< 1 year Plan work Shadowing sales manager
Eligible replacement, promotability rating, competency gaps
and development plans. Budget prep Starting in-house training course
Perf. mgt. Serving as sales manager 10 hours per
week
Taking course on performance
management at university extension
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 Discussion Questions 4
• What are the advantages and
disadvantages of doing succession
planning for all levels of management,
instead of just top management?

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 Planning
Diversity and Affirmative Action Planning

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 Diversity Planning
• Recruiting implications
• Advertise in a variety of media sources
• Recruit at colleges and universities that have large numbers of
individuals in underrepresented groups
• Demonstrate diversity in recruiting materials

• Selection techniques
• Evaluate need for requirements that may eliminate a disproportionate
number of underrepresented groups
• Focus on methods that minimize subjectivity

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 Guidelines for Affirmative Action Plans
• Purpose is remedying past discrimination.
• Definite underutilization of women and/or minorities
• Should not penalize majority group members
• Should be eliminated once goals have been achieved
• All candidates should be qualified
• Include organizational enforcement mechanisms

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 Determining Availability of Minorities and Women

Source: Sample Affirmative Action Program for Small Employers, 2020 (www.dol.gov/ofccp).
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 Comparing Incumbency to Availability
If Yes, If Yes, Goal
Job Female Female Establish Goal? Goal for Minority Minority Establish Goal? for
GroupTable divided
Incumbency into four
Availability columns
Yes/No summarizes determining
Females Incumbency affirmative
Availability Yes/No Minorities
action goals: Comparing incumbency with availability and annual
1 0.00% 47.60% Yes 47.60% 11.10% 18.10% Yes 18.10%
placement goals. Column 1 and 4 are marked as: Job group and if yes,
2 goal for minorities.
45.50% Column 2Nois divided into18.20%
43.80% four sub-columns
8.20% as: Female
No

4 incumbency,
20.00% female
34.50%availability,
Yes establish
34.50% goal?
0.00% yes/no. Column 3Yesis
12.40% 12.40%
divided into three sub-columns as: Minority incumbence, minority
5 83.30% 87.70% No 43.30% 27.60% No
availability and establish goal? yes/no.
6 9.30% 5.50% No 34.90% 23.20% No

7 10.00% 6.30% No 30.00% 37.50% No

8 6.30% 19.10% Yes 19.10% 37.50% 26.30% No

Source: Sample Affirmative Action Program for Small Employers, 2020 (www.dol.gov/ofccp).

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 Discussion Questions 5
• What problems might an organization
encounter in creating an AAP that it
might not encounter in regular staffing
planning?

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 Ethical Issues in Staffing
• Issue 1
• Does an organization have any ethical
responsibility to share with all of its employees
the results of its forecasting of HR requirements
and availabilities? Does it have any ethical
responsibility not to do this?
• Issue 2
• Identify examples of ethical dilemmas an
organization might confront when developing an
affirmative action plan (AAP).

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Copyright 2022 © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.
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 The Basic Elements of Human Resource Planning 1 - Text
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The elements are as follows:

(1) Forecast labor requirements.
(2) Forecast labor availabilities (both 1 and 2 are compared),
both leading to:
(3) Determining gaps; and
(4) Developing action plans.

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 The Basic Elements of Human Resource Planning 2 - Text
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The data for job category and level, current workforce, forecast for work force:
one year (requirements and availabilities), reconciliation and gaps and action
planning are as follows:
A1 (Sales): 100: 110: 71: negative 39 (shortages): recruitment selection.
A2 (Sales manager): 20: 15: 22: positive 7 (surplus): employment retention.
B1 (Customer service representative): 200: 250: 140: negative 110 (shortage):
compensation training and development.
B2 (Customer service manager): 15: 25: 22: negative 3 (shortage).
Blank: 335: 400: 255: negative 145 (shortages).

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 Use of Markov Analysis to Forecast Availability - Text
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A) The data for transition probability matrix job category and level; A1, A2, T plus 1
(B1), B2 and exit are as follows:
A1: .60: .10: .20: .00: .10
A2: .05: .60: .00: .00: .35
B1: .05: .00: .60: .05: .30
B2: .00: .00: .00: .80: .20
B) The data for forecast of availabilities with second column for current work force are
as follows:
A1: 100: 60: 10: 20: 0
A2: 20: 1: 12: 0: 0
B1: 200: 10: 0: 120: 10
B2: 15: 0: 0: 0: 12
Blank: blank: 71: 22: 140: 22.
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 Reconciliation and Gaps - Text Alternatives
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The data for job category and level, current workforce, forecast for
work force: one year (requirements and availabilities), reconciliation
and gaps and action planning are as follows:
A1 (Sales): 100: 110: 71: negative 39 (shortages): recruitment
selection.
A2 (Sales manager): 20: 15: 22: positive 7 (surplus): employment
retention.
B1 (Customer service representative): 200: 250: 140: negative 110
(shortage): compensation training and development.
B2 (Customer service manager): 15: 25: 22: negative 3 (shortage).
Blank: 335: 400: 255: negative 145 (shortages).

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 Operational Format for Human Resource Planning - Text
Alternatives Return to parent-slide containing images.

The data for job category and level, current workforce, forecast for
work force: one year (requirements and availabilities), reconciliation
and gaps and action planning are as follows:
A1 (Sales): 100: 110: 71: negative 39 (shortages): recruitment
selection.
A2 (Sales manager): 20: 15: 22: positive 7 (surplus): employment
retention.
B1 (Customer service representative): 200: 250: 140: negative 110
(shortage): compensation training and development.
B2 (Customer service manager): 15: 25: 22: negative 3 (shortage).
Blank: 335: 400: 255: negative 145 (shortages).

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 Staffing Alternatives to Deal With Employee Shortages
and Surpluses - Text Alternatives
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The data for employee shortage for short term options include:
Subcontracting, increase productivity, increase overtime or part time, buy
back vacation or holidays, temporary assignments and temporary hires.
The data for employee shortage for long term options include:
Hiring, permanent transfer into role, recall or retired employees, retaining
and outsourcing.
The data for employee surplus for short term options include:
Hiring freeze, retaining, reduce workweek, increase leave availability,
temporary reassignment and temporary shutdown or layoff.
The data for employee surplus for long term options include:
Long term hiring freeze, permanent transfer out of role, retirement incentives
and downsizing or long term lay off.

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 Replacement Chart - Text Alternatives
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The details are as follows:

Incumbent Manager: Seng Woo.

Years in Job: 7.

Overall Performance Rating: Exceeds expectations.

Promote to: Group Sales Manager.

Promotability Rating: Ready now.

Replacement: Shantara Williams.

Years in Job: 8

Overall Performance Rating: Exceeds expectations.

Promote to: Sales Manager.

Promotability Rating: Ready now.

Replacement: Lars Stemke.

Years in Job: 2.

Overall Performance Rating: Exceeds expectations.

Promote to: Sales Manager.

Promotability Rating: Ready in less than 1 year.

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 Determining Availability of Minorities and Women - Text
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The data for job group 1, raw statistics (female and minority (in
percentage)), weighted statistics (value weight, female, minority (in
percentage)) and source of statistics and reason for weighting include:
Percentage of minorities or women with requisite skills in the
reasonable recruitment area: 41. 8: 9.4: 50.0: 20.9: 4.7: 2000 census
data (The reasonable recruitment area for this job group is the Saint
Louis, MO-IL metropolitan statistical area (MSA): 50 percent of
placement into this job group is made from external hires.
Percentage of minorities or women among those promote
transferable and trainable within the contractor's organization: 53.3:
26.7: 50.0: 26.7: 12.4: the group of promotable employees in job
group 2: 50 percent of placement into this job group is made from
internal promotions.
Totals: 100: 47.6: 18.1; less than final factor.
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