Workforce_Planning.ppt

copyright 2010 pearson education, inc. publishing as prentice hall5-1 human resource management chapter five workforce planning framework for the strategic management of employees job design copyright 2010 pearson education, inc. publishing as prentice hall5-3 importance of workforce planning lhaving the right number of employees with the right skill sets will enable a firm to take advantage of business opportunities loperating in excess of staffing requirements is an inefficient use of financial resources la companys effectiveness is directly affected by the quality of workforce planning decisions copyright 2010 pearson education, inc. publishing as prentice hall5-4 definition of workforce planning making sure individuals with the right skills sets are where they need to be at the right time to meet current and future needs llabor demand number and types of employees the company needs llabor supply current or potential employees to perform jobs llabor shortage when demand for labor exceeds available supply llabor surplus when supply of labor is greater than demand copyright 2010 pearson education, inc. publishing as prentice hall5-5 framework for workforce planning copyright 2010 pearson education, inc. publishing as prentice hall5-6 forecasting labor supply & labor demand linternal factors lexternal factors copyright 2010 pearson education, inc. publishing as prentice hall5-7 internal factors (1) turnover: voluntary and involuntary termination of employees lloses a talented employee lcreates stress on co-workers who must pick up the slack ladds costs and time demands associated with filling open positions copyright 2010 pearson education, inc. publishing as prentice hall5-8 internal factors (contd) (2) employee movements: lpromotions moving to higher level positions ltransfers moving to jobs with similar responsibility ldemotions moving to lower-level positions copyright 2010 pearson education, inc. publishing as prentice hall5-9 tracking employee movements lreplacement charts identifying potential replacement employees for positions that could open up within the organization lsuccession planning identifying employees who might be viable successors for top managerial positions ltransition matrix model for tracking movement of employees throughout the organization to plan for the future copyright 2010 pearson education, inc. publishing as prentice hall5-10 transition matrix chapter 511 employee movement - transition matrix 2006 2005 store mgrast. store mgr section mgr dept. mgrsales assoc. exit store mgr (n=12) 90% (n=11) 10% (n=1) ast store mgr (n=36) 11% (n=4) 83% (n=30) 6% (n=2) section mgr (n=96) 11% (n=11) 66% (n=63) 8% (n=8) 15% (n=14) dept. mgr (n=288) 10% (n=29) 72% (n=207) 2% (n=6) 16% (n=46) sales assoc. (n=1440) 6% (n=86) 74% (n=1066) 20% (n=288) forecasted supply n=15n=41n=92n=301n=1072n=351 chapter 512 transition matrix 2006 2005 store mgrast. store mgr section mgr dept. mgrsales assoc. exit store mgr (n=12) 90% (n=11) 10% (n=1) ast store mgr (n=36) 11% (n=4) 83% (n=30) 6% (n=2) section mgr (n=96) 11% (n=11) 66% (n=63) 8% (n=8) 15% (n=14) dept. mgr (n=288) 10% (n=29) 72% (n=207) 2% (n=6) 16% (n=46) sales assoc. (n=1440) 6% (n=86) 74% (n=1066) 20% (n=288) forecasted supply n=15n=41 n=92 (shortage) n=301n=1072n=351 chapter 513 transition matrix 2006 2005 store mgr ast. store mgr section mgr dept. mgrsales assoc. exit store mgr (n=12) 90% (n=11) 10% (n=1) ast store mgr (n=36) 11% (n=4) 83% (n=30) 6% (n=2) section mgr (n=96) 11% (n=11) 66% (n=63) 8% (n=8) 15% (n=14) dept. mgr (n=288) 10% (n=29) 72% (n=207) 2% (n=6) 16% (n=46) sales assoc. (n=1440) 6% (n=86) 74% (n=1066) 20% (n=288) forecasted supply n=15 n=41 (surplus) n=92n=301n=1072n=351 copyright 2010 pearson education, inc. publishing as prentice hall5-14 internal factors (contd) (3) employee productivity: productivity is the level of a firms output (products or services) relative to inputs (employees, equipment, materials, etc.) lproductivity ratio the number of employees needed to achieve a certain output level lmanagers can calculate the number of employees needed once they have productivity ratios copyright 2010 pearson education, inc. publishing as prentice hall5-15 internal factors (contd) l productivity ratio example: yearproductivity output number of employees productivity ratio 2007650015043.33 2008700016043.75 20097250x=170 (needed) average ratio = 42.86 20107500x=175 (needed) average ratio = 42.86 copyright 2010 pearson education, inc. publishing as prentice hall5-16 internal factors (contd) (4) company performance l company performance influences its demand for labor (5) strategic direction lcompany evolution lmerger and acquisition copyright 2010 pearson education, inc. publishing as prentice hall5-17 external factors (1)local labor market size and composition of the local labor market (2)economic conditions unemployment rate (3)industry trends e.g. retail establishments, actions of competition chapter 518 industry trends jfmamjjasond consumer demand copyright 2010 pearson education, inc. publishing as prentice hall5-19 tactics for labor shortages (1)overtime quick solution for short duration but will be costly and may lead to stress, burnout, turnover (2)outsourcing sending work to other companies (payroll, cafeteria, maintenance) copyright 2010 pearson education, inc. publishing as prentice hall5-20 tactics for labor shortages (contd) (2) outsourcing (contd) lcontingent labor hiring employees on a temporary or contractual basis lnumerical flexibility adjusting number of employees quickly to meet seasonal demands lfunctional flexibility modifying composition of workforce by using workers with different knowledge and skills copyright 2010 pearson education, inc. publishing as prentice hall5-21 tactics for labor shortages (contd) (3) retention llowering turnover lowers a firms costs of recruiting, selecting, and training new employees lemployee satisfaction is a key predictor of turnover (4) promotion, transfers, and demotions leffective and fast way to deal with labor shortage (5) new hires copyright 2010 pearson education, inc. publishing as prentice hall5-22 labor surplus tactics (1) layoffs quickly reducing the number of workers employed lused to quickly adjust the size and composition of the workforce lfocused on short-term cost containment lcan produce feelings of job insecurity and lead to lower commitment and higher turnover (2) attrition decision not to fill vacant positions hiring freeze ban on all hiring for a period of time copyright 2010 pearson education, inc. publishing as prentice hall5-23 labor surplus tactics (contd) (3) early retirement financial incentive to have employees retire early (can result in mass exodus) (4) promotions, transfers, demotions can move people to other areas of the firm facing shortages copyright 2010 pearson education, inc. publishing as prentice hall4-24 workforce planning in practice: meeting challenges organizational demands environmental influences regulations strategy company characteristics culture employee concerns labor force trends technology globalization ethics & social responsibility copyright 2010 pearson education, inc. publishing as prentice hall5-25 strategy & workforce planning lrequired speed to deal with shortages and surpluses ldifferent strategies affect how firms must cope with labor shortages and surpluses lcompanies focused on cost will deal with labor surplus quickly (layoffs) lcriticality of employee groups lstrategy affects which employees are most critical to its success lexample a firm focusing on differentiation strategy depends on developing r&d skills organizational demands copyright 2010 pearson education, inc. publishing as prentice hall5-26 company characteristics & workforce planning lrelative impact of labor shortages and surpluses lsmaller companies will feel a greater impact of shortages or surpluses lwho carries out workforce planning llarger companies use hr department and technology to track labor force lsmaller companies look to managers and supervisors lcompanies in early development often require managers to “wear many hats” organizational demands copyright 2010 pearson education, inc. publishing as prentice hall5-27 culture & workforce planning lcompanies loyal to employees may be hesitant to implement layoffs, others are more willing to take drastic measures ltactics consistent with culture will strengthen values of company ltactics inconsistent with culture may lead to lower employee morale and greater turnover organizational demands copyright 2010 pearson education, inc. publishing as prentice hall5-28 employee concerns & workforce planning lstress and work/life balance llayoffs create stress not only on employees who lose jobs but also on families and communities where they live lin the time of labor shortages, employees also experience stress due to extra work to make sure additional tasks are performed lpromotion, transfers, or demotions also create stress organizational demands copyright 2010 pearson education, inc. publishing as prentice hall5-29 employee concerns & workforce planning (contd) lperception of procedural and distributive justice lit is important that employees understand the rationale behind the decisions (procedural justice) leven if employees agree with decision, they may disagree with how the practice is implemented (distributive justice) lkey is open lines of communication to maximize employee involvement and acceptance organizational demands copyright 2010 pearson education, inc. publishing as prentice hall5-30 labor force trends & workforce planning lavailability of internal and external workers lstay current on emerging labor force trends that affect company (occupational and demographic trends) lmany companies are increasingly competing with other companies for limited supply of workers lbureau of labor statistics of the u.s. department of labor is good source environmental influences copyright 2010 pearson education, inc. publishing as prentice hall5-31 labor force trends & workforce planning (contd) lselecting tactics to use lactively retain employees to prepare for labor shortages lmodify the nature of the job lactively recruit older employees environmental influences copyright 2010 pearson education, inc. publishing as prentice hall5-32 technology & workforce planning lautomation machines performing tasks that could otherwise be performed by people ltechnological improvements help companies redesign processes and improve productivity ratios ltechnology also changes types of skills employees need to service customers environmental influences copyright 2010 pearson education, inc. publishing as prentice hall5-33 technology & workforce planning (contd) lcompanies can track skill sets of employees and identify potential matches for jobs lreplacement charts and succession planning increase a firms ability to identify and track future replacements environmental influences copyright 2010 pearson education, inc. publishing as prentice hall5-34 globalization & workforce planning llabor force trends vary across countries lglobalization has fueled trend toward offshoring and global opportunities for u.s. workers (it jobs, call centers) loffshoring: lenables a large labor supply, lower labor cost, and opportunities to operate a firm “24/7” without any downtime lincludes risks associated with maintaining product and service quality environmental influences copyright 2010 pearson education, inc. publishing as prentice hall5-35 ethics & workforce planning lcommunities affected by workforce planning decisions have social, political and competitive implications lexample: labor costs in central europe lemployers sometimes offer outplacement assistance programs to help employees find new jobs environmental influences countryfactory worker engineeraccountantmiddle manager poland$3.07$4.32$4.03$6.69 hungary$1.96$5.09$4.62$7.44 bulgaria$0.73$1.43$0.83$2.80 germany$18.80$38.90$26.40$40.40 copyright 2010 pearson education, inc. publishing as prentice hall5-36 requirements for mass layoffs & plant closings lworker adjustment and retraining notification (warn) act mandates 60 days notice in advance of a plant closing or mass layoff for, lcompanies with 100 or more employees, not counting part-time employees lcompanies with 100 or more employees, including part0time employees who in the a