Human Resource Planning Assumes a strategic perspective to staffing dilemmas by anticipating HR supply and demand 1. Environmental scanning 2. Forecasting HR requirements 3. Forecasting HR availabilities 4. Gap Analysis 5. Institute action plans 6. Control & evaluation 1. Environmental scanning - comparing business plan with HR supply - pressures of technology, culture legal regulations, competition 2. Labor demand forecast (project how business needs affect labor demand) 3. Labor supply forecast (project availability of internal/external sources) 4. Gap Analysis (reconcile supply/demand; make plans) 5. Action plans (institute plans) 6. Control and evaluation (cost, turnover, performance, compliance/AAP) PV

1. Environmental scanning Understanding macro-labor & economic conditions & how they impact business aims and strategy Product & Labor Market Data labor demand: industry & employment growth labor statistics: unemployment and cost Inflation and interest rates Capital improvements & labor costs Government and Licensing Regulations Affordable Care Act PV

2. Forecasting HR requirements Employee Flows within an organization Attrition Voluntary Involuntary Upward Lateral Acquisition Expansion or replacement from external labor market PV

Methods of Forecasting Demand Need to define unit of employment Full time equivalent - FTE Benefit entitlement & other costs for FTE Ratio Analysis: FTE to Sales is common Nurse-Patient ratio or # beds; Food service employees to diners; sale units to salespeople Regression Analysis: Sales and season as common predictors: Ý = a + b1x1 + error Hospital Pharmacists Limitations include: projects past into future (assumes stability) third variable problem differential unit effects (different/greater competencies) PV

3. Forecasting HR Availabilities Internal and External Resource Scans Current internal inventory of KSAO availability Talent inventories promotions, transfers, recalls, retraining, overtime scheduling, subcontracting, temporary hires/assignments, vacation and holiday buy-backs Anticipating staffing needs employee attitude surveys absenteeism, accidents rates, performance, voluntary and involuntary turnover External inventory of KSAO availability BLS site data & O*Net, information networks (think tanks, universities), conferences, government publications, consortiums PV

An Empirical Method to Forecast Availabilities Markov Analysis Advantages powerful method for estimating transition probabilities across a matrix of jobs representing an internal labor market Disadvantages based again on ‘static environment’ does not reflect multiple movements in same period assumes each employee has equal probability of movement requires 20+ in each job category for reasonable estimation PV

Example Markov Analysis JOB Staffing Levels 2017 S M A Exit Supervisors (S) 30 .75 .20 .05 Machinists (M) 80 .10 .80 .00 Assemblers (A) 250 .15 .70 Supervisors (S) 22 6 2 Machinists (M) 8 64 Assemblers (A) 37 175 38 Numbers are rounded Staffing Levels 2018 30 108 183 Exit PV

4. Gap Analysis Scrutinizing shortfalls and surplus stemming from requirement-availability discrepancies A process of identifying discrepancies Serves as catalyst for developing action plans to address the gap(s) PV

5. Institute action plans Define Purpose/objectives Control movement increase (reduce) labor supply? assure higher success or retention? Develop & Execute Strategy tentative strategies may be developed and their feasibility assessed Adjust promotion rate: increase or reduce requirements for promotion – seniority, training, certification increases in base pay to influence job attraction adopt a vesting policy for tenure or promotion eligibility provide recruitment incentives to recruiters, for referrals, new hire signing bonuses PV

Less Traditional Alternatives Temporary help agencies (40-50% markup) Independent contractors (project vs. hours; ‘firm’ & ‘contractor’ relationship) Part-time employment (benefit cost containment; lower loyalty) More limited applications Flextime Compressed workweek Flexplace / Telecommuting PV

6. Control & evaluation Time-lapse data as index of efficiency posting to hire latency in days offer to acceptance in days Compliance EEO legislation and AAPs ‘utilization analysis’ is determining whether current labor force representation is similar to local population demographics Utilization involves qualified employees Yield ratios: # at stage t + k / # at stage t Exhibits: Utilization Analysis & Other HR Stats PV

Yield Ratio Examples Other data points to use? Recruitment Source Applications Qualified Interviewed Offered Job Accepted Offer Walk-ins 20 6 2 1 Referrals 30 24 15 10 8 Newspaper 150 50 5 3 Website 125 75 40 12 Other data points to use? Successful probationary period? Performance? Promotions? Length of service measures? Cost basis per applicant – hire – acceptance of offer?

Environmental scanning HRP Process Summary Requirements Analysis Availability Analysis Business Plans Environmental scanning Current Workforce Forecasted HR Requirements Forecasted HR Availabilities Gap Analysis Action Plans Other HR Activities Staffing Activities PV