BHMH2133 Staffing and Selection - Chapter 2: Planning for Staffing

BHMH2133 Staffing and Selection

Chapter 2: Planning for Staffing

Learning Objectives for This Chapter

• Recognize internal and external influences that will shape the planning process.

• Understand how strategic plans integrate with staffing plans.

• Familiarize with statistical and judgmental techniques for forecasting HR requirements and availabilities.

• Understand the advantages and disadvantages of core workforce, flexible workforce, and outsourcing strategies for different groups of employees.

Internal Influences on Staffing

Organizational Strategy

• Familiarity with the organization’s future plans and goals is essential for staffing managers to ensure the right number of people with the correct Knowledge, Skills, Abilities, and Others (KSAOs) are hired in a timely manner.

• Current financial resources and human resources: Assess whether financial resources and internal staff are adequate for future goals, such as rapid business expansion.
      - Example: For a goal of rapid expansion, evaluate if existing financial and human resources can support this.

• Demand for products and/or services: Changes in demand can impact staffing needs.
      - Example: A decrease in demand for guided travel may lead to redundant staff or require a reduction in the number of hired tour guides.

Staffing for Organizational Strategy

• Case Study: DBS Bank equips 16,000 employees with data skills for future challenges, focusing on data analytics to enhance collaboration and develop intuitive products.

Competitors and Partners

• Changes in competitor strategies can affect staffing.
      - Example: If competitors offer higher salaries for computer talents, it may lead to an increase in staff turnover.

• Financial and Marketing Goals:
      - Financial goal: Increase sales revenue by 5%.
      - Marketing goal: Increase market share by 10%.

Organizational Culture

• The right candidates should align with the organizational culture.

• Three factors influencing organizational culture:
      - Expressed vision of executives: E.g., Leaders who prioritize innovation and flexibility.
      - Degree of hierarchy and bureaucracy: Companies with high hierarchy tend to employ many rules to govern employee behavior.
      - Style of communication: Organizations may vary in how they encourage employee expression and feedback.

External Influences on Staffing

Labor Markets

1. Labor Demand:
      - Understand the organization's strategic projections for future KSAO needs.
      - Collect employment statistics to identify future labor demand trends, especially in technical and basic skills.

2. Labor Supply:
      - Assess the quantity of labor supply and the available KSAOs.
      - Identify labor shortages (when demand exceeds supply) or surpluses.
      - Employment arrangements may include independent contractors and contingent employees.

Technology

• Elimination of jobs: Examples include clerical workers and telephone operators becoming redundant.

• Creation of jobs: E.g., Demand surges for software engineers and website designers.

• Changes in skill requirements can also arise from technological advancements.

Internal Versus External Staffing

Internal Staffing

• Advantages:
      - Positive employee reactions to promotions.
      - Quick identification of job applicants.
      - Cost-effective and time-efficient in reaching productivity.

• Disadvantages:
      - Limits the infusion of new KSAOs into the organization.
      - A restricted labor market for recruitment resulting in possible skills gaps.
      - Potentially longer training times may be required for internal candidates.

External Staffing

• Advantages:
      - Brings in new KSAOs that enrich the organization.
      - Access to a larger labor market, increasing recruitment options.
      - New hires may need less training time due to existing competencies.

• Disadvantages:
      - Negative feedback from internal applicants can lead to morale issues.
      - The search process for external candidates is typically expensive and time-consuming.
      - External hires may take longer to reach full productivity compared to internal relocations.

Overview: Human Resource Planning (HRP)

• Involves four sequential steps:
    1. Determine future HR requirements to meet strategic business needs.
    2. Determine future HR availabilities.
    3. Compare requirements and availabilities to identify employment gaps.
    4. Develop action plans to address the identified gaps.

Example of Planning

• Availability Calculation:
     - Marketing Managers: 50 (requirements) – 40 (availabilities) = -10 (shortage).

HRP: Initial Decisions

• Strategic Planning:
    - Align HR planning with the larger organizational mission and objectives.
    - Identify values and core competencies expected from all organization members (e.g., self-management skills).
    - Ensure comprehensiveness, viewing systems of goals rather than just individual goals.
    - Contingency Plans: Important for unexpected changes like key employee departures.
    - Consideration of planning time frames:
      - Long-term (> 3 years)
      - Intermediate (1-3 years)
      - Short-term (< 1 year)

Job Categories and Levels

• Define what roles and job categories will be encompassed in the HRP.

• Clarify roles and responsibilities between line managers and HR specialists.

Statistical Techniques for Forecasting HR Requirements

1. Ratio Analysis: Utilizes historical sales or operational data for headcount predictions.

2. Regression Analysis:
      - Uses historical predictors to provide statistically precise estimates for future workforce needs.
      - Example Equation: $ext{FTEs} = a + b imes ext{sales} + c imes ext{new customers}$.
      - Example Calculation:
        - $ext{a} = 7$,
        - $ext{b} = 0.0004$ (sales),
        - $ext{c} = 0.02$ (new customers).
        - For projected sales of $1,000,000$ and new customers of $300$,
          - $ext{HR requirements} = 7 + 400 + 6 = 413$.

Judgmental Techniques for Forecasting HR Needs

• Top-down approach: Senior managers predict future headcounts based on business knowledge.

• Bottom-up approach: Lower-level managers provide initial estimates based on their unit's needs.

• Scenario Planning: Incorporates managerial judgment into statistical models, allowing for varying demand scenarios.

Forecasting HR Availabilities

Statistical Techniques: Markov Analysis

• Predicts availability based on historical job stability and employee movement patterns.

• Estimation of the internal workforce available for future roles using turnover data.

Example of Markov Analysis

1. Past Records Example: Predicted retention and transitions for various job positions, informing future availabilities.
      - Example data indicates: 60% of A1 employees remain in their roles, while 10% get promoted, with 20% transferring to CS representative roles.

Human Resource Planning: Reconciliation and Gaps

• Identifying projected workforce gaps:
      - Workforce shortages or surpluses are assessed in relation to business demand.
      - Assess likely reasons for identified gaps, such as reduced market demand leading to lower employee requirements.

Action Planning

• Set objectives for closing any gaps identified.

• Implement alternatives to address workforce surpluses or shortages, considering a broad range of activities.

Staffing Planning Process

• Staffing Objectives:
     - Both quantitative and qualitative objectives are determined.
     - Define KSAO values for staffing needs and set a path forward based on these objectives.

Staffing Alternatives for Employee Shortages

• Consider outsourcing work or subcontracting tasks to manage workforce effectively.

Staffing Alternatives for Employee Surpluses

Long-term Options

• Freeze new hires, implement permanent out-transfers.

• Layoffs and retirement incentives and retraining for in-house roles.

Short-term Options

• Freeze new hires and manage attrition strategically.

• Reduce overtime or part-time staffing levels.

• Utilize temporary shutdowns or layoffs as necessary.

Staffing Planning: Flexible Workforce

• Definition: A flexible workforce comprises temporary employees from staffing firms and independent contractors.

• Advantages:
      - Allows for rapid adjustments to staffing levels.
      - Reduces costs associated with pay and benefits for full-time employees.

• Disadvantages:
      - Lack of control over temporary employees can lead to integration issues.

Staffing Planning: Outsourcing

• Definition: Outsourcing refers to the transfer of a business process to an external organization, which can include offshoring.

• Advantages:
      - Utilization of lower-wage countries for manufacturing and information processing.
      - Achieving economies of scale through outsourcing arrangements.

• Disadvantages:
      - Potential quality control issues and poor working conditions in offshoring scenarios.

Factors to Consider When Choosing a Staffing Firm

• Evaluate the agency and its reputation, types of workers provided, and the services offered, including training and supervision.

• Assess worker effectiveness based on job performance metrics, punctuality, and attendance records.