Workforceplanningworkshopparticpantversion 12621283618035 Phpapp02

Workforce Planning
Presented by Senga Consulting Inc.
Participants will learn the
Categories of HR forecasting.
Rationale for attention to specialist, technical and
executive personnel in forecasting.
Impact of environmental and organizational
variables on HR demand and supply.
Various demand forecasting techniques.
Methods of determining external and internal HR
supply.
Relationship between forecasting and succession
planning.
Senga Consulting Inc. Copyright 2009 | All Rights Reserved
Workforce Planning
Workforce Planning
Business process for ensuring an organization has

access to talent to ensure future success.
Access to talent includes considering all access
sources.
Talent: The skills, knowledge, predisposition and
ability to undertake required activities including
decision making.
Getting Started
Obtain support from senior leaders.

Communicate benefits and results to managers.
Establish a workforce planning team of
knowledgeable employees from different functional
areas and levels.
Develop and implement a plan.
Solicit continuous feedback for ongoing
improvements.
Workforce Planning Steps

Step 1
Supply Analysis
Step 2
Demand Analysis
Staffing levels
Workforce skills
Workforce demographics\
Employment trends
Workforce skills needed

Staffing patterns
Anticipated workload changes
Step 3
Gap Analysis
Compare supply analysis with demand analysis

Determine future gaps (shortages) and surpluses (excesses)
Identify future changes in workforce demographics
Identify areas in which management action will be needed
Step 4
Strategy Development
Plan
o Recruiting
o Succession
o Employee development and retraining
o Organizational change
Workforce Planning Model
Strategic
Direction
Setting
Supply,
Demand,
Discrepancies
Develop Action
Plan
Implement
Action Plan
Monitor,
Evaluate,
Revise
Environmental Scanning
Cost and availability of capital
Government Regulations
Raw
Raw Materials
Materials
HR
HR
INPUTS
Information
INPUTS
Information
Financial
Financial resources
resources
Equipment
Equipment
Labour availability
TRANSFORMATION
TRANSFORMATION
Product/Services
Product/Services
Employee
Employee Behaviour
Behaviour
OUTPUTS
OUTPUTS
Profits/losses
Profits/losses
Waste/Pollution
Waste/Pollution
Competition
Technology
Supplier power
Globalization
Customer expectations
Techniques
Scanning identify early signals of changes and

trends.
Monitoring follow key indicators that affect the
organization.
Forecasting after monitoring, project the impact
on the organization.
Assessing describe the impact of the monitored
trend on the organization, make a judgment of the
probability of outcomes.
Forecasting Methods
Trend Analysis a quantitative approach to forecast

future personnel needs based on extrapolating
information from historical changes.
Delphi Technique forecasts and judgments of a
group of experts are solicited and summarized to
determine the future of employment.
Impact Analysis trends are analyzed by a panel of
experts who then predict the probability of future
events.
Scenario Planning creating future scenarios that
differ radically from those created by extrapolation
of present trends
10
Environmental Factors
Economic climate the economy affects HR

management
Globalization affects sovereignty, prosperity,
jobs, wages, and social legislation
Political and legislative factors influence
organizations with changes to laws and regulations
Technological factors new issues include online
HR functions, identity theft, e-learning, answering
email on vacations
Demographic factors include age, gender,
family status, education, economic status, labour
market
Social and cultural factors
11
Exercise
What key
environmental
factors affect your
organizations
ability to achieve its
goals?
What are the HR

implications?
12
The HR Forecasting Process

13
Learning Topics
Categories of HR forecasting activity and their

relationship to the HR planning process
Rationale for attention to specialist, technical, and
executive personnel groups in the HR forecasting
process
Impact of environmental and organizational
variables on the accuracy and time period of
estimates derived from future estimates of HR
demand and supply
Various stages in the process of determining net
HR requirements
14
Forecasting Activity Categories

Transactional-based
forecasting
Event-based forecasting
Process-based forecasting
15
Human Resources Supply and Demand
Human Resources
Demand
Human Resources
Supply
16
Key Personnel Analyses

Specialist
Technical
Professional
Recruits
Key
Personnel
Employment
Equity
Managers
and
Executives
17
Designated Group
Aboriginal
descent
Women
D
G
People with
disabilities
Visible
minorities
Receive the most discrimination within organizations

18
5 Stages of the Forecasting Process
Identify
Goals
Identify
demand
Assess
Internal
Supply
Determine
Demand
Develop
Strategies
19
Organizational Factors
Corporate mission, strategic goals

Operational goals, production budgets
HR policies
Organizational structure, restructuring
Worker KSAs, competencies, expectations
HRMS level of development
Organizational culture, climate, job satisfaction,
communications
Job analysis
20
Environmental Factors
Economic situation
Labour markets and unions
Government laws and regulations
Industry and product life cycles
Technological changes
Competitor labour usage
Global market for skilled labour
Demographic changes
21
Time Horizons
1.
Current
3.
up to 1 year
2.
Shortrun
1 - 2 years
Mediumrun
2 - 5 years
4.
Long-run
5 or more
years
22
23
External Supply
Employees receiving
training, working for
competitors, members of
professional associations, in
transition or unemployed
Internal Supply
Organizational workforce
who can be retrained,
promoted, transferred, fill
future requirements
Ascertain HR Supply
Determine NET HR Requirements

External supply requirements =
replacement + change supply components
Change supply =
hiring to increase (or decrease) the overall staffing level
Replacement supply =
hiring to replace all normal losses
External supply =
current workforce # x (replacement % per year + change
% per year)
24
Example
External supply = current workforce x (replacement % per yr +
change % per yr)
Surplus =
1000 x (4 % per year (0.04) + 2 % per year (0.02)

40 + 20 = 60
Need for 60 employees
Deficit =
1000 x (4% per year (0.04) + -7% per year (-0.03)
40 + -70 = -30
Need to reduce by 30 employees
25
Your Turn
External supply = current workforce x (replacement % per yr +
change % per yr)
Surplus =
10,000 x (3.5 % per year (0.035) + 3 % per year (0.03)

+ =
Need to hire
employees
Deficit =
10,000 x (6% per year (0.06) + -8% per year (-0.08)
+ =
Need to reduce by
employees
26
HR Surplus/Deficit
Internal workforce supply exceeds the

organizations requirement or demand for
personnel
Demand exceeds the current resources
available in the organization's workforce
27
HR Demand
28
Learning Topics
Demand forecasting
Linkages between labour demand forecasting and
the supply
Various demand forecasting techniques
29
HR Demand
Projected human resources requirement
30
Trend Analysis
Historical relationship between a business index

(e.g., sales, contracts, units sold etc.) and the
number of employees required to achieve that
index (labour demand)
31
Effective Trend Analysis

Five steps to conducting an effective
index/trend analysis:
1.
Select the appropriate business index
2.
Track the index over time
3.
Track the total number of employees over time
4.
Calculate the average ratio of the business index
to the total number of employees
5.
E.g. employee requirement ratio - the relationship
between the business index and the demand for
labour
6.
Calculate the Forecasted Demand for Labour
32
Employee Requirement Ratio
Current Year
Year
Sales ($000)
2007
$3,000
123
24.39
2008
3,200
155
20.65
2009
3,300
170
19.41
2010
3,400
165
20.61
2011
3,560
180
19.78
2012
3,600
189
19.05
2013
3,800
190
20.00
2014
4,000
199
20.10
# of Employees
Ratio (Sales/EE)
33
Steps for Delphi Technique

Sequential surveys with feedback on opinions in previous
rounds
Define and refine the issue or question
Identify the experts, terms, and time horizon
Orient the experts
Issue the first-round questionnaire
Issue the first-round summary and second-round
questionnaire
Continue issuing questionnaires
34
Steps for the Nominal Group Technique

Long-run forecasting technique utilizing expert
assessments
Define and Refine the Issue or Question and the Relevant Time
Horizon
Select the Experts
Issue the HR Demand Statement to the Experts
Apply Expert Knowledge, State Assumptions, and Prepare an
Estimate
Meet Face-to-Face
Discuss the Demand Estimates and Assumptions
Vote Secretly to Determine the Expert Demand Assessment
35
HR Budgets
Quantitative, operational or short-run demand

estimates that contain the number and types of
personnel required by the organization as a whole
and for each subunit, division, or department
36
HR Budgets: Staffing Table

Staff Demand Requirements
Sales ($ Millions)
Executive Positions
$1-10
>$10-25
>$25-50
>$50-75
President
Vice Presidents
Directors
HR
10
Financial
11
Operations
Marketing
Sales
Management Positions
37
Scenario Forecasts
Projections of future demand for human resources
based on differing assumptions about future
events.
Sales
Optimistic
Normal
Pessimistic
Now
T + 1 Year
T + 2 Years
Time
T + 3 Years
38
Regression Analysis
Presupposes a linear relationship between

independent (casual) variables and dependent
(target) variable, e.g., HR demand
Linearity is the relationship between the
independent and dependent variables
39
Regression Analysis
Y Dependent Variable
Y = dependent variable (HR demand)

A = constant (Y intercept)
B = slope of linear relationship between X and Y
X = independent variable (e.g. level of sales)
A
X Independent Variable
40
Regression Prediction
Y = A + BX
Y = dependent variable (HR demand)
A = constant (Y intercept)
B = slope of linear relationship between X and Y
X = independent variable (e.g. level of sales)
Where
41
Exercise
Data
Sales
($ Millions)
2.0
3.5
4.5
6.0
7.0
# of Marketing Personnel
20
32
42
55
66
5 Sets of observations
42
Exercise Step 1
Calculate XY, X2, average X and average Y
XY
X2
Sales
($ Millions)
2.0
2.5
3.5
5.0
6.5
# of
Employees
25
28
30
38
54
50
70
105
190
351
4.00
6.25
12.25
25.00
42.25
19.5
175
766
89.75
Average X = 19.5/5 = 3.9 Average Y = 175/5 = 35

N=5
43
Exercise Step 2
Calculate the value of B (slope of the linear relationship between X and Y)
XY
X2
50
70
105
190
351
4.00
6.25
12.25
25.00
42.25
766
89.75
N=5
Average X = 3.9
Average Y = 35
44
Exercise Step 3
Calculate A (constant or intercept)
Average X = 3.9
IF
Y = A + BX
Then
Average Y = 35
B = 6.09
AND
A = 35 (6.09)(3.9)
A = 11.23
45
Exercise Step 4
Determine the regression prediction equation
Y = A + BX
A = 11.23
B = 6.09
X = Dependent Variable
Y = 11.23 + (6.09)(X)
Whew! So what?
Independent causal variable X
(e.g., sales) AND
Dependent variable Y
(e.g., predicted # of personnel)
Even if sales are zero the value for A is
11.23 (round to 11.0) or 11 persons.
For every increase unit ($1 Million)
sales (X) there is a predicted increase
of 6.09 staff (Y) associated with that
change.
46
Exercise Step 5
Calculate predicted HR demand (Y) by inserting values for X
Predict the HR demand for personnel at $8 million and $10 million.
Y = A + BX
A = 11.23
B = 6.09
X = Sales ($M)
Y= 11.23 + (6.09)(X)
$8 million
$10 million
Y = A + BX
Y = A + BX
A = 11.23
A = 11.23
B = 6.09
B = 6.09
X=8
X = 10
Y = 11.23 + (6.09)(8) Y = 11.23 + (6.09)(10)

Y = 59.99
Y = 72.18
60 Staff required
72/73 Staff required
47
Ascertaining HR Supply
48
Learning Topics
Relationship between demand / supply forecasting

Relationship between forecasting and replacement
management
Methods of determining external and internal supply
of employees such as:
Skills and management inventories,

Replacement analysis,
Markov models,
Linear programming,
Movement analysis,
Vacancy/renewal
49
Human Resources Supply
Source of workers to meet demand acquired

internally or externally.
50
Skills Inventory
1.
2.
3.
4.
5.
6.
Record held on employee except management or

professionals
Personal information
Education, training and skill competencies,
licensing etc.
Work history
Performance appraisals
Career information
Hobbies, interests, volunteerism, community
involvement
51
Management Inventory
Record for managerial, professional, or technical

personnel that includes all elements in the skills
inventory with the addition of information on
specialized duties, responsibilities, and
accountabilities.
History of management or professional jobs held

2.
A record of management or professional training
courses
3.
Key accountabilities for the current job
4.
Assessment centre and appraisal data
5.
Professional and industry association
memberships
1.
52
Replacement Management
Process of ensuring that pools of skilled employees

are trained and available to meet the strategic
objectives of the organization
Process of finding employee for key managerial
positions
Long-term succession
1.
a)
Training and work experience to enable individuals to

assume higher-level job appointments in the future
Short-term emergency replacement
2.
a)
Individuals who have quit, been terminated due to

performance problems, have died, and so on
53
Replacement Analysis
Improve effectively filling vacancies
P r e s id e n t
J a c k N e w la n d
S . L a n d a r (A 1 )
K . C h o w (A 2 )
V P S a le s
J . O b re y (A 2 )
B . A n d re w s (B 3 )
D . J e ffe rs (C 1 )
Readiness
A Ready now
B Ready in 1 year
C Ready in 2 years
D Not suitable for this job
V P
A .
E .
K .
O p e ra
C hang
S in g h
P e te rs
tio n s
(A 2 )
(B 1 )
(C 3 )
V P M a r k e tin g
T . S h e rm a n (A 1 )
U . L a u (C 1 )
H Y u e n (D 2 )
Performance
1 Outstanding
2 Above average
3 Average/good
4 Below Average
5 Unacceptable
54
Ripple Effects
Caused when one promotion or transfer in the

organization causes several other movements as
a series of people are promoted to fill the
openings
55
Markov Model
Produces a series of matrices that detail the

various patterns of movement to and from the
various jobs in the organization
Determines the likelihood that an individual will
display movement behaviours
56
Sample Markov Matrix*

Year 2010
Year 2009
Senior
Analyst
Analyst
Job A (n = 3)
1(0.25)
1(0.25)
1(0.50)
Job B (n = 5)
1(0.10)
3(0.75)
1(0.15)
Job C (n = 8)
Supply (n = 16)
Clerk
Exit
1(0.05)
6(0.90)
1(0.05)
*Adapted from Strategic Human Resources Planning,

Belcourt and McBey, Nelson, 2010.
57
Markov Analysis Conclusions
Number of people who move between job levels

annually
Number of external hires needed
Movement patterns and expected duration in
specified jobs associated with patterns of career
progression
Number and percentage of starters at a particular
job who target a future job within a specified time
58
Linear Programming
Mathematical procedure used for project

analysis in engineering and business
applications
Determine the optimal supply mix to minimize
costs or other constraints.
59
Movement Patterns
1.
2.
3.
4.
5.
Remain in current job

Promotion to higher job classification
Lateral move
Exit from a job (e.g., termination, layoff, voluntary
exit)
Demotion
60
Movement Analysis
Analyze people supply and the ripple effect that

promotions or job losses have on the movements of
others in the organization
61
Exercise*
5% increase for levels

6-9
1 additional level 4
6 additional level 5
Historical annual loss
rates
Retirements
o 2 positions level 5
o 15% levels 6-9
Turnover
o 10% levels 5 and 6
o 15% level 7
o 20% level 8
o 25% level 9
Positions are start of

year
o
o
o
o
o
o
1 level 4
6 level 5
20 level 6
32 level 7
40 level 8
50 level 9

62
Exercise
Lev
el
Positions at Start of
Period
Staff
Changes
Staff Losses Positions to be

Filled
20
32
10
12
40
14
16
50
21
24
149
15
53
68
Start at the top with the most senior positions since most movement in
organizations is up due to promotions and replacements.
63
Exercise
Vacancie
s
Moveme
nt
Total Ripple
1
9
12
16
12
24
12
68
36
18
24
16
10
16
28
44
68
16
167
Movement analysis has identified this years need to fill 68 vacancies.

167 moves will be required because of promotion from within.
64
Vacancy Model
Analyzes people flow throughout the organization at

each functional or compensation level
Use the following information to calculate next years supply forecast.
HR loss during the year

Level 88 (president
Level 87 (vice presidents)
Level 86 (directors)
Level 85 (managers)
Level 84 (senior analysts)
Level 83 (analysts)
=
=
=
=
=
=
100%
15%
17%
20%
25%
50%
Replacement Policy (% external / % internal)

% external % internal
Level 88
0
100
Level 87
10
90
Level 86
20
80
Level 85
30
70
Level 84
55
45
Level 83
100
0
65
Exercise*
Start at the top and work your way down
Salary
Level
Positions at
Start of Year
Annual
Losses
Promotions
to Level
Level Outflows
External Hiring
18
45
13
88
22
14
31
17
156
78
92
92
Total
314
114
30
144
114

66
Supply and Retention Programs
Monitor and control absenteeism and turnover

Retention programs are vital to keeping
experienced, high-performers
67
Costs of Replacing Employees

Hard Costs
Advertisements
Headhunter, recruiting fees
Interview training
Travel costs
Admin expenses
Costs of lost production
Bonuses
Increased salaries
Cost to replace a fully
proficient employee - 70200% annual salary
Soft Costs
Lost business and
customer contacts
Decreased productivity
due to training and
learning curve gaps
Orientation and training
time
Decline in team morale
and productivity
Increased turnover due to
the follow-me effect
68
Retention Programs
Offering effective communication programs

Facilitating an enjoyable and collegial work
atmosphere
Designing meaningful jobs
Formulating and administering performance
and compensation systems that reward better
performers
Offering more flexible and attractive work
arrangements) -- flextime, telecommuting,
cafeteria-style benefits plans
Mentoring and developing intellectual capital
69
Succession Management
70
Learning Topics
Evolution of succession management

Steps in the succession management process
Compare job and competency approaches
Identifying high potential talent
Management development methods
Measuring success of management succession
Limitation of succession management
71
Importance of Succession Management
Process of ensuring that a pool of skilled

employees ready to achieve the strategic
objectives of the organization
72
Evolution of Succession Management
Process of finding replacement employees for key

managerial positions
Replacement planning has evolved into
succession management by:
Broadening the focus

Expanding the time horizon
Creating a talent pool
Improving the evaluation system
73
Reasons for Succession Management

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Provide opportunities for high-potentials

Identify replacement needs
Increase the talent pool of promotable employees
Contribute to implementing strategic business plans
Help individuals realize their career plans
Tap the potential for intellectual capital
Encourage the advancement of diverse groups
Cope with the effects of voluntary separation programs
Decide which workers can be terminated
Cope with the effects of downsizing
Reduce headcount to essential strategically important jobs
only
74
75
Monitor Succession Management
Provide Developmental Opportunities and Experiences
Identify High-Potential Employees
Identify the Skills and Competencies Needed to Meet Strategic Objectives
Align Succession Management Plans with Strategy
Succession Management Process
Step 1
Align Succession Plans with Strategy
Organizations must start with the business plan

Using environmental scanning, managers try to
predict where the organization will be in three to
five to ten years
76
Step 2
Identify the Skills and Competencies
1.
Job-Based Approach
2.
Competency-Based Approach
77
Job and Competency Approaches

Job Based Approach Competency-Based
Approach
Focus on duties, skills,
job experience, and

Focus on measurable
responsibilities
attributes
required to perform
Differentiate successful
the job
employees from non
Not adequate since

successful
jobs change rapidly
Hard and soft skills
Produce more flexible

individuals
78
Types of Competencies
1.
Core competencies
2.
Role or specific competencies
3.
Unique or distinctive competencies
79
Step 3
Identify High-Potential Employees
Several approaches to identify managerial
talent, including:
Temporary replacements
Replacement charts
Strategic replacement
Talent management culture
80
Management Development Methods
Promotions
Job Rotations
Special Assignments
Formal Training and Development
Mentoring and Coaching
81
Leadership Development Activities*

% Very
Effective
Use
% Moderate or
Extensive Use
Special projects within job responsibility
77
69
Special projects outside of job responsibility
46
55
Expatriate assignments
26
54
Coaching with internal coaches/mentors
48
45
Formal workshops
85
42
Coaching with external coaches/mentors
28
42
Articles/books
65
27
Tests, assessments or other measures of skills
52
26
Computer based learning
38
16
* From Strategic Human Resource

Planning, Belcourt and McBey,
82
Management Development Methods
Promotions
Job Rotations
Special Assignments
Formal Training and Development
Mentoring and Coaching
83
Step 5
Monitor Succession Management
Corporations with strong succession management

programs are higher performers in revenue
growth, profitability and market share
HR metrics can be used to help monitor
succession management
84
Succession Management Metrics
Increase engagement scores

Increase positive perceptions of development
opportunities
High potentials perceptions of the succession
management process
Higher participation in developmental activities
Greater number involved in the mentoring process
85
HR Metrics Lag Measures
Increased ave # of candidates
Reduced ave # of positions with no identified

successors
Increased % of managers with replacement plans
Increased % of key positions filled according to

plans
Increased ratio of internal to external hires
Increased retention rates of key talent
Increased % of positive job evaluations
86
Contact Information
Wayne Rawcliffe
Senga Consulting Inc.
604.909.3840
205, 1275 West 6th Avenue
Vancouver, BC V6H 1A6
wayne@senga.ca
www.senga.ca
87

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Workforce Planning

Presented by Senga Consulting Inc.

Participants will learn the

Senga Consulting Inc. Copyright 2009 | All Rights Reserved

Business process for ensuring an organization has

Senga Consulting Inc. Copyright 2009 | All Rights Reserved

Obtain support from senior leaders.

Senga Consulting Inc. Copyright 2009 | All Rights Reserved

Workforce Planning Steps

Workforce skills needed

Compare supply analysis with demand analysis

Workforce Planning Model

Senga Consulting Inc. Copyright 2009 | All Rights Reserved

Scanning identify early signals of changes and

Senga Consulting Inc. Copyright 2009 | All Rights Reserved

Trend Analysis a quantitative approach to forecast

Senga Consulting Inc. Copyright 2009 | All Rights Reserved

Economic climate the economy affects HR

Senga Consulting Inc. Copyright 2009 | All Rights Reserved

Senga Consulting Inc. Copyright 2009 | All Rights Reserved

What are the HR

The HR Forecasting Process

Categories of HR forecasting activity and their

Senga Consulting Inc. Copyright 2009 | All Rights Reserved

Forecasting Activity Categories

Senga Consulting Inc. Copyright 2009 | All Rights Reserved

Human Resources Supply and Demand

Key Personnel Analyses

Receive the most discrimination within organizations

5 Stages of the Forecasting Process

Senga Consulting Inc. Copyright 2009 | All Rights Reserved

Corporate mission, strategic goals

Senga Consulting Inc. Copyright 2009 | All Rights Reserved

Senga Consulting Inc. Copyright 2009 | All Rights Reserved

Senga Consulting Inc. Copyright 2009 | All Rights Reserved

Senga Consulting Inc. Copyright 2009 | All Rights Reserved

Determine NET HR Requirements

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1000 x (4 % per year (0.04) + 2 % per year (0.02)

10,000 x (3.5 % per year (0.035) + 3 % per year (0.03)

Internal workforce supply exceeds the

Senga Consulting Inc. Copyright 2009 | All Rights Reserved

Senga Consulting Inc. Copyright 2009 | All Rights Reserved

Senga Consulting Inc. Copyright 2009 | All Rights Reserved

Historical relationship between a business index

Senga Consulting Inc. Copyright 2009 | All Rights Reserved

Effective Trend Analysis

Employee Requirement Ratio

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Steps for Delphi Technique

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Steps for the Nominal Group Technique

Quantitative, operational or short-run demand

Senga Consulting Inc. Copyright 2009 | All Rights Reserved

HR Budgets: Staffing Table

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Presupposes a linear relationship between

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Y = dependent variable (HR demand)

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Average X = 19.5/5 = 3.9 Average Y = 175/5 = 35

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