Employee/labour turnover refers to the process of employees leaving an organization and requiring to be replaced.

High turnover involves increased costs on recruitment, selection and training. In addition, high labour turnover may lead to disruption of production, problems in quality control, and difficulty in building teamwork and morale. Certain percentage of labour turnover is unavoidable. Resignation, retirement, death and transfers do take place causing displacement in workplace. Similarly, business expansion necessities hiring of people. THE SUPPLY OF HUMAN RESOURCES Once the HR department projects future demand for human resources, its next major concern is filling projected openings. There are two sources of supply: internal and external. Internal Supply The internal supply of candidates can be determined using a number of methods, such as replacement charts, succession plans, human resource management information systems, and departmental estimates. Replacement Charts: Replacement charts are manual or automated records indicating which employees are currently ready for promotion to a specific position. If needs are forecasted for a particular job, replacement charts provide data with which to determine the supply of internal candidates to fill the openings. Succession Planning: The concept of succession planning is similar to replacement charting except the time perspective is different. Succession

planning is the process of identifying candidates for future openings. It is a longer-term plan for developing candidates to fill positions. Human Resource Management Information Systems: Many human resource management information systems frequently contain data on qualifications or skills of current employees. After workforce demand is forecast, the database can be queried regarding the supply of potential internal candidates that possess the necessary qualifications or skills. Departmental Estimates: Organizations are not static. Most organizations and their component departments experience constant flows of employees both in and out. Analysis of this movement provides valuable information to forecast internal supply. Table below provides the formula used to forecast internal supply within a particular department in the organization and common sources of employee movement in and out. Table - Estimated Internal Labor Supply for a Department Inflows Transfers from other departments Hires from the external labor market Recalls from layoffs Returns from leaves of absence and sabbaticals Outflows Retirements Resignations Death Promotions to other departments Transfers to other departments Terminations Estimates of External Supply When there are no replacements or when the opening is at the entry level, they is a need for external supply of human resources.

External needs: Growth is primarily responsible for the number of entrylevel job openings, especially is the company promotes from within to fill job vacancies. The lack of promotable replacements creates job openings that need to be filled externally.

Labour market analysis: Success in finding new employees depends on labour market and on the skills of the employment specialists in the human resources department.

Community attitudes: They affect the nature of the nature of the labour market. Antibusiness or nongrowth attitudes may cause employers to locate else where.

Demographics:

Demographic

trends

are

another

longterm

development that affect the availability of external supply. Fortunately for planners, these trends are known years in advance of their impact. CASE STUDY: SUCCESSION PLANNING AT MOTOROLA Motorola, Inc is an electronic and wireless communications company based in Illinois, United States of America. In 1998 it had 142,000 employees and an annual turnover of $27 billion. The Results Through the use of various initiatives including succession planning Motorola has significantly improved the outcomes for women in its organization. One measure that illustrates this is the number of female vice presidents. In 1989 Motorola had two female vice presidents. In 1997, six years after the modification of Motorolas succession planning so that it incorporated the

companys diversity objectives and sought to accelerate the advancement of women and minorities within the organisation, Motorola had forty female vice presidents, including seven women of colour. How was this achieved? Reason for change In the late 1980s due to changing demographics in its workforce, Motorola began to redesign its established succession planning process to make the development of women and minorities a priority. This process culminated in 1991 with Motorolas succession planning process, known as the Organization and Management Development Review (OMDR) being amended to include diversity objectives. Setting of goals and commitment As part of the amendment to the OMDR Motorola set a clear goal: within ten years the number of women and minorities at all levels of management should be representative of the number of women and minorities in the available talent pool. The program Motorolas OMDR guarantees that women and minorities, as well as white men are not only identified as high potential managers but also that they move along through the organization. The process of identification of high potentials requires each division to submit lists of candidates in four categories: white men, women, minorities and technical staff. Career development plans are prepared for each high
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potential and their progress through the company is then tracked. If they leave or fall of the list in the future, the individuals manager must explain why this happened. To counter the perception that most women and minorities are still in the feeder pool, a replacement chart that identifies key positions and three people who could fill each one was developed. Line one is the immediate successor. Line two is the person who should success the incumbent if the company had three to five years to prepare. Line three is the most qualified woman or minority candidate at that time, in addition to any women or minority person already on line one or two. Women and minorities must be included even if it means hiring externally. Business Rationale: Motorola promoted the link between the succession planning initiative and the companys business goals of pursuing quality, productivity, new markets and profits. Emphasis was placed on the business success that can flow from having a socially diverse workforce. Leadership Role: The Chief Executive championed the initiative. Presidents of major operational areas develop plans for meeting diversity goals. They report quarterly on the progress of these plans to the Chief Executive. The managers and Chief Executive then meet once a year to discuss the progress of the initiative. Accountability

Motorola sees diversity as a business initiative and as such line managers not the HR department should be responsible for its implementation. Senior managers are required to keep track of and report on the representation of women and minorities in their units. Key messages Clearly define targets and goals. Setting a time frame and numbers creates impetus for action. Have a broad definition of succession planning to include the widest talent pool. Ensure that women and minorities are not only identified, but that once identified that they are among those being groomed for senior positions. It is never too early to begin: As one Motorolas vice president stated, it is important to get the feeder people on the radar. Once they are on the radar more questions are asked about their development and it is harder for them to be lost within the organization. Organizations cannot wait for women to appear in management. Implement careful and strategic planning for targeted individuals career development. Being identified is not enough. Consider potential benefits of encouraging informal mentoring. Ensure there is strong leadership and commitment from senior management. Initial and on-going personal involvement of the Chief Executive is crucial to success. Integrate succession planning into business and diversity objectives. A clear link between business goals and the desired results of the succession planning will assist in gaining commitment from the

organization and staff. To be successful it must be portrayed as a core issue.