Human Resources Planning Process

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

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, 1. Forecasting the demand for labor and to predict areas 2. Determining labor within the organization supply where there will be labor shortages or surpluses. 3. Determining labor surpluses and shortages

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

Forecasting the Demand for Labor

Trend Analysis Constructing and applying statistical models that predict labor demand for the next year, given relatively objective statistics from the previous 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

SIMULATION MODEL/REGRESSION FORECAST TARGET STORES STAFFING FORECAST

MODEL

Y = 8 + .0011(X1) + .00004(X2) + .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 + .0011(50,000sq ft) + .00004(150,000popul) + .00000002($850 million)

Y = 8 + 55 + 6 + 17

Y = 86 employees needed at this store

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

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.

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. It answers two questions: 1. Where did people in each job category go? 2. Where did people now in each job category come from?

Personnel / Yield Ratios

How much work will it take to recruit one new accountant?

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. California Sales Manager Idaho/Utah Sales Manager Seattle Area Sales Manager

Outstanding Outstanding Satisfactory Satisfactory

Ready Now Needs Training Needs Training Questionable

-------------------------------------------------------------------------

HUMAN RESOURCE INFORMATION SYSTEMS (HRIS)

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

Transition Matrix
Example for an Auto Parts Manufacturer

MARKOV ANALYSIS
(STATISTICAL REPLACEMENT ANALYSIS)

TO: FROM: TOP TOP MID LOW SKILL .80 .10 MID .02 .76 .06

A TRANSITION MATRIX LOW SKILLED ASSY EXIT .18 .04 .78 .01 .01 .84 .10 .15 .15

ASSY

.05 .88 .07 ------------------------------------------

MARKOV ANALYSIS 2
(Captures effects of internal transfers)

(Start = 3500) FROM/ TO: TOP 100 MID LOW 200 600

TOP .80 .10

A TRANSITION MATRIX MID LOW SKILLED .02 .76 .06 .04 .78 .01 .01 .84

ASSY

EXIT .18 .10 .15 .15

SKILL 600

ASSY 2000 .05 .88 .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

MARKOV ANALYSIS 3
(Anticipates Changes in Employment Levels)

Employment needs are changing. We need a 10% increase in skilled workers (660), and a 15% decrease in assembly workers (1700) by years end. ------------------------------------------------------(Start = 3500) A TRANSITION MATRIX FROM/ TO: TOP MID LOW SKILLED ASSY EXIT TOP 100 .80 .02 .18 MID 200 .10 .76 .04 .10 LOW 600 .06 .78 .01 .15 SKILL 600 .01 .84 .15 ASSY 2000 .05 .88 .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

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

PERSONNEL / YIELD RATIOS

Past experience has developed these yield ratios for recruiting a Cost Accountant:

FOR EVERY 12 APPLICATIONS RECEIVED, ONLY 1 LOOKS PROMISING ENOUGH TO INVITE FOR AN INTERVIEW OF EVERY 5 PERSONS INTERVIEWED, ONLY 1 IS ACTUALLY OFFERED A POSITION IN THE ORGANIZATION OF EVERY 3 JOB OFFERS MADE, ONLY 2 ACCEPT THE POSITION OF EVERY 10 NEW WORKERS WHO BEGIN THE TRAINING PROGRAM, ONLY 9 SUCCESSFULLY COMPLETE THE PROGRAM THUS: 100 APPLICATIONS MUST BE RECEIVED, so that 8.33 JOB INTERVIEWS CAN BE HELD, so that 1.67 JOB OFFERS CAN BE MADE, and 1.11 PEOPLE MUST BE TRAINED, so that we get ONE NEW COST ACCOUNTANT!!!

Thank you