Planning

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
Planning 1
Internal and External Influences
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
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
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 two sections
Quick method to identify job of two columns each
underrepresentation of minorities and
summarizes staffing philosophy: Internal
applicants women versus
• Less expensive • Small labor market to recruit from
external staffing. The first section
• Less time required to reach full
summarizes internal
• Inexperienced employees may require
staffing. The second section summarizes
productivity external
more training time
staffing.
Externa Thein employees
• Brings columnwith headers are
new KSAOs marked
• Negativeas:
reaction by internal
Advantages and disadvantages.
• Larger number of minorities and applicants
women to draw 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
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
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)?
Planning 2
Human Resource Planning
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
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
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.

 HRP: Forecasting Requirements 3
Ratio Analysis
1. Examine historical ratios involving workforce size.
$ sales No. of new customers
Example: =? =?
1.0 FTE 1.0 FTE

2. Assume ratio will be true in future.

3. Use ratio to predict future HR requirements.

$40,000
Example: (a) ispast ratio
1.0FTE
(b)Sales forecast is$4,000,000
(c)HRrequirements = 100FTEs
HRP: Forecasting Requirements 4
Regression Analysis
1. Statistically identify historical predictors of workforce size.

Example: FTE = a + b1 sales + b2 new customers

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

3. Predict future HR requirements, using equation.

Example: (a)FTEs = 7 + .0004 sales + .02new customers

(b)Projectedsales = $1,000,000
Projectednew customers = 300
(c)HRrequirements = 7 + 400 + 6 = 413
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
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 projected • Set objectives
gaps
• Generate alternative activities
• Likely reasons for gaps
• Assess alternative activities
• Assessing future implications
• Choose alternative activities
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?
Planning 3
Staffing Planning
Staffing Planning Process
• Staffing objectives
• Quantitative objectives
• Qualitative objectives
• Generate alternative staffing activities
• Staffing alternatives to deal with employee shortages and
surpluses
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
• Predictability conditions
• Sense of commitment • Quickly staff new areas
• Fill in for core workers
• Disadvantages
• Locked in relationship • Disadvantages
• Reduced flexibility • Lower commitment
• Less inflow of new ideas • Lower helping, creative suggestions, or
extra effort
• Potential friction with core workers
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
Staffing Planning: Outsourcing
• Advantages
• Disadvantages
• Special issues
• Employer concerns regarding working conditions
• Loss of control over quality
• Offshoring
Discussion Questions 3
• What criteria would you suggest using for
assessing the staffing alternatives related to
dealing with employee shortages and surpluses?
Planning 4
Individual Internal Staffing Plans
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 plan
in-house training
example. The column headers are marked from left to right as:
course
Eligible replacement,
L. Stemke Ready in< 1 yearpromotability
Plan work rating, competency
Shadowing gaps and
sales manager
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
Discussion Questions 4
• What are the advantages and disadvantages of doing
succession planning for all levels of management,
instead of just top management?
Planning
Diversity and Affirmative Action Planning
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
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
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 Table divided
Femaleinto four columns
Femalesummarizes Establish Goalaffirmative
determining for Minority
action goals: Minority Establish Goal?
Comparing incumbency with for
Groupavailability and annual placement
Incumbency Availability goals. Column
Goal? 1 andFemales
Yes/No 4 are marked as: Job group
Incumbency and if yes, goal for
Availability minorities.Minorities
Yes/No
Column 2 is divided into four sub-columns as: Female incumbency, female availability, establish goal? yes/no.
Column 3 is divided into three sub-columns as: Minority incumbence, minority availability and establish goal?
1 yes/no. 0.00% 47.60% Yes 47.60% 11.10% 18.10% Yes 18.10%

2 45.50% 43.80% No 18.20% 8.20% No

4 20.00% 34.50% Yes 34.50% 0.00% 12.40% Yes 12.40%

5 83.30% 87.70% No 43.30% 27.60% 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).
Discussion Questions 5
• What problems might an organization encounter in
creating an AAP that it might not encounter in regular
staffing planning?
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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