1. 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
Trends and events that affect the economy also create opportunities and problems in obtaining human resources.
To prepare for and respond to these challenges, organizations engage in human resource planning – defined in Chapter 1 as identifying the numbers and types of employees the organization will require to meet its objectives.

2. Overview of the Human Resource Planning Process
Figure 5.1 shows the human resource planning process.
The process consists of three stages:
Forecasting
Goal setting and strategic planning
Program implementation and evaluation

3. Human Resource Forecasting
HR Forecasting attempts to determine the supply and demand for various types of human resources, and to predict areas within the organization where there will be labor shortages or surpluses.
There are three major steps to forecasting:
Forecasting the demand for labor
Determining labor supply
Determining labor surpluses and shortages
The first step in human resource planning is forecasting.
The primary goal is to predict which areas of the organization will experience labor shortages or surpluses.

4. 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

5. 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.
Usually an organization forecasts demand for specific job categories or skill areas.
After identifying the relevant job categories or skills, the planner investigates the likely demand for each.
The planner must forecast whether the need for people with the necessary skills and experience will increase or decrease.
There are several ways of making such forecasts.

6. CORRELATIONS/PROJECTIONS
SIZE OF HOSPITAL NUMBER OF NURSES

7. SIMULATION MODEL/REGRESSION FORECAST
TARGET STORES STAFFING FORECAST
MODEL
Y = (X1) (X2) (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 = (50,000sq ft) (150,000popul) ($850 million)
Y =
Y = 86 employees needed at this store

8. VACANCY ANALYSIS Historic departures used to project turnover
LEVEL # EMPL TURN % Expected Vacancies Expected to Remain
TOP MGMT %
MID MGMT %
LOW MGMT %
SKILLED W %
ASSY WKRS %
TOTALS
AVERAGE TURNOVER PERCENTAGE = 536 / =

9. 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:
“Where did people in each job category go?”
“Where did people now in each job category come from?
Personnel / Yield Ratios
How much work will it take to recruit one new accountant?
Once a company has forecast the demand for labor, it needs an indication of the firm’s labor supply.

10. SUCCESSION PLANNING REPLACEMENT CHART POSITION REPLACEMENT CARDS
FOR EXECUTIVE POSITIONS
POSITION REPLACEMENT CARDS
FOR EACH INDIVIDUAL POSITION
POSITION WESTERN DIVISION SALES MANAGER
DANIEL BEALER Western Division Sales Mgr Outstanding Ready Now
PRESENT PROMOTION
POSSIBLE CANDIDATES CURRENT POSITION PERFORMANCE POTENTIAL
SHARON GREEN Western Oregon Sales Manager Outstanding Ready Now
GEORGE WEI N. California Sales Manager Outstanding Needs Training
HARRY SHOW Idaho/Utah Sales Manager Satisfactory Needs Training
TRAVIS WOOD Seattle Area Sales Manager Satisfactory Questionable

11. 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

12. Transition Matrix Example for an Auto Parts Manufacturer
Table 5.1 is an example of a transitional matrix.
Matrices such as this one are extremely useful for charting historical trends in the company’s labor supply.

13. MARKOV ANALYSIS (STATISTICAL REPLACEMENT ANALYSIS)
TO:  A TRANSITION MATRIX
FROM:
TOP MID LOW SKILLED ASSY EXIT
TOP
MID
LOW
SKILL
ASSY

14. MARKOV ANALYSIS – 2 (Captures effects of internal transfers)
(Start = 3500) A TRANSITION MATRIX
FROM/ TO:  TOP MID LOW SKILLED ASSY EXIT
TOP
MID
LOW
SKILL
ASSY
END YR WITH: [358 left]
NEED RECRUITS ? * tot
NEED LAYOFFS ? (10)* (10) tot
KEEP STABLE = Tot

15. 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 year’s end.
(Start = 3500) A TRANSITION MATRIX
FROM/ TO:  TOP MID LOW SKILLED ASSY EXIT
TOP
MID
LOW
SKILL
ASSY
END YR WITH: [358 left]
NEED RECRUITS ? *
NEED LAYOFFS ? (60)*
NEW LEVELS = tot

16. 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.
Issues related to a labor surplus or shortage can pose serious challenges for the organization.

17. 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!!!