Chapter

Chapter 5:5:
Strategic
Strategic
Workforce
Workforce
Planning
Planning
© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Strategic
Strategic Workforce
Workforce Planning
Planning (1)(1)
•• First
First component
component of of HRM
HRM strategy
strategy
•• All
All other
other functional
functional HR HR activities
activities are
are derived
derived
from
from and
and flow
flow out
out ofof HRP
HRP process
process
•• Basis
Basis inin considerations
considerations of of future
future HR
HR
requirements
requirements in in light
light of
of present
present HR HR capabilities
capabilities
and
and capacities
capacities
•• Proactive
Proactive in in anticipating
anticipating and and preparing
preparing flexible
flexible
responses
responses to to changing
changing HR HR requirements
requirements
•• Both
Both internal
internal and
and external
external focus
focus

© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Strategic
Strategic Workforce
Workforce Planning
Planning (2)(2)
•• Goes
Goes beyond
beyond simple
simple hiring
hiring and
and firing
firing
•• Involves
Involves planning
planning forfor deployment
deployment of of human
human
capital
capital in
in line
line with
with organization
organization and/or
and/or business
business
unit
unit strategy
strategy
•• May
May involve:
involve:
•• Reassignment
Reassignment
•• Training
Trainingand
anddevelopment
development
•• Outsourcing
Outsourcing
•• Using
Usingtemporary
temporaryhelp
helpor
or outside
outsidecontractors
contractors
•• Needs
Needs as
as much
much flexibility
flexibility as
as possible
possible
© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Key
Key Objectives
Objectives
•• Prevent
Prevent overstaffing
overstaffing and and understaffing
understaffing
•• Ensure
Ensure organization
organization has has right
right employees
employees with with
right
right skills
skills in
in right
right places
places at at right
right times
times
•• Ensure
Ensure organization
organization is is responsive
responsive to to changes
changes in in
environment
environment
•• Provide
Provide direction
direction andand coherence
coherence to to all
all HR
HR
activities
activities and
and systems
systems
•• Unite
Unite perspectives
perspectives of of line
line and
and staff
staff managers
managers
•• Help
Help toto ensure
ensure thatthat the
the organization’s
organization’s financial
financial
resources
resources are are being
being optimally
optimally deployed
deployed
© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Types
Types of
of Planning
Planning

•• Aggregate
Aggregate Planning
Planning
•• Anticipating
Anticipating needs
needs for
for groups
groups of of employees
employees in
in
specific,
specific, usually
usually lower
lower level
level jobs
jobs and
and general
general
skills
skills employees
employees will
will need
need to
to ensure
ensure
sustained
sustained high
high performance
performance
•• Succession
Succession Planning
Planning
•• Focuses
Focuses on on ensuring
ensuring key
key critical
critical
management
management positions
positions in
in organization
organization remain
remain
filled
filled with
with individuals
individuals who
who provide
provide best
best fit
fit

© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Aggregate
Aggregate Planning
Planning (1)(1)
•• Forecasting
Forecasting demand
demand
•• Considers
Considersfirm’s
firm’sstrategic
strategicplan’s
plan’seffects
effectson
onincreases
increasesor or
decreases
decreasesin indemand
demandforforproducts
productsor orservices
services
•• Assumptions
Assumptionson onwhich
whichforecast
forecastisispredicated
predicatedshould
shouldbe be
written
writtendown
downand andrevisited
revisitedwhen
whenconditions
conditionschange
change
•• Unit
Unitforecasting
forecasting(bottom-up
(bottom-upplanning)
planning)involves
involves“point
“pointof
of
contact”
contact”estimation
estimationof offuture
futuredemand
demandforforemployees
employees
•• Top-down
Top-downforecasting
forecastinginvolves
involvessenior
seniormanagers
managersallocating
allocating
aafixed
fixedpayroll
payrollbudget
budgetacross
acrossorganizational
organizationalhierarchy
hierarchy
•• Demand
Demandfor foremployee
employeeskills
skillsrequirements
requirementsmust
mustalso
alsobebe
considered
considered

© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Aggregate
Aggregate Planning
Planning (2)(2)

•• Forecasting
Forecasting supply
supply
•• The
The level
level and
and quantities
quantities of
of abilities,
abilities, skills
skills and
and
experiences
experiences can
can be
be determined
determined using
using Skills
Skills
Inventory.
Inventory.
•• Annually
Annually updated
updated human
human resource
resource
information
information system
system (HRIS)
(HRIS) isis dynamic
dynamic source
source
of
of HR
HR information
information

•• How
How to
to manage
manage shortage
shortage ???
???
© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Strategies
Strategies for
for Managing
Managing Shortages
Shortages
•• Recruit
Recruit new
new •• Work
Work current
current staff
staff
permanent
permanent overtime
overtime
employees
employees •• Subcontract
Subcontract work
work out
out
•• Offer
Offer incentives
incentives to
to •• Hire
Hire temporary
temporary
postpone
postpone retirement
retirement employees
employees
•• Rehire
Rehire retirees
retirees part-
part- •• Redesign
Redesign job
job
time
time processes
processes so
so fewer
fewer
•• Attempt
Attempt toto reduce
reduce employees
employees are
are
turnover
turnover needed
needed

© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Strategies
Strategies for
for Managing
Managing Surpluses
Surpluses
•• Hiring
Hiring freezes
freezes •• Across-the-board
Across-the-board
•• Do pay
pay cuts
cuts
Do not
not replace
replace those
those
who
who leave
leave •• Layoffs
Layoffs
•• Offer
Offer early
early retirement
retirement •• Reduce
Reduce outsourced
outsourced
incentives
incentives work
work
•• Reduce
Reduce work
work hours
hours •• Employee
Employee training
training
•• Voluntary
Voluntary severance
severance •• Switch
Switch to
to variable
variable
leaves
leaves of
of absence
absence pay
pay plan
plan
•• Expand
Expand operations
operations
© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Succession
Succession Planning
Planning
•• Involves
Involves identifying
identifying key
key management
management positions
positions
the
the organization
organization cannot
cannot afford
afford to
to have
have vacant
vacant
•• Purposes
Purposes of of succession
succession planning
planning
•• Facilitates
Facilitatestransition
transitionwhen
whenemployee
employeeleaves
leaves
•• Identifies
Identifiesdevelopment
development needs
needsof
of high-potential
high-potential
employees
employeesand andassists
assistsin
incareer
careerplanning
planning
•• Many
Many organizations
organizations fail
fail to
to implement
implement succession
succession
planning
planning effectively
effectively
•• Qualified
Qualifiedsuccessors
successorsmay
mayseek
seekexternal
externalcareer
career
advancement
advancement opportunities
opportunitiesifif succession
successionisisnot
not
forthcoming
forthcoming
© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Exhibit
Exhibit 5.4:
5.4: Sample
Sample Replacement
Replacement Chart
Chart

© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Guidelines
Guidelines for
for Effective
Effective Succession
Succession
Planning
Planning
•• Tie
Tie into
into organization’s
organization’s strategy
strategy (and
(and modified
modified
accordingly)
accordingly)
•• Monitor
Monitor thethe progress
progress and and measure
measure outcomes
outcomes of of
succession
succession planning
planning initiatives
initiatives
•• Ensure
Ensure that
that all
all HR
HR functions
functions that
that impact
impact the
the
succession
succession planplan are
are integrated
integrated andand working
working in
in
tandem
tandem
•• Ensure
Ensure centralized
centralized coordination
coordination of of succession
succession
planning
planning
•• Engage
Engage and and involve
involve managers
managers throughout
throughout the
the
organization
organization
© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
 Exhibit
Exhibit 5.6:
5.6: Pros
Pros and
and Cons
Cons of
of
Disclosing
Disclosing Succession
Succession Planning
Planning

© 2019 Cengage. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.