Has become as key strategic priority for HER department and for strategic business planners Existing labor shortage in Canada is forecast to increase to 1 million workers over the next 15 years Canada is in the beginning stages of a major labor shortage (baby boomers retiring too fast) Lack of HARP can result in 1) high costs when unstained positions create inefficiencies and severance pay for workers being fired 2) one department lays off workers while another is hiring workers with similar skills C reduce morale and productivity D turnover 3) greater concern is that ineffective HARP can lead to an organizations inability o accomplish short-term operational plans or long-term strategic plans.
The key steps in the HARP process include analyzing forecasted labor supply, forecasting labor demand, and then planning & implementing HER programs to balance supply and demand: The Relationship between HARP and Strategic Planning HARP must align with the overall goals of the organization& LET/SST strategic plans set by the org. Failure to integrate HARP and strategic planning can have very serious consequences. The Importance of Environmental Scanning Environmental scanning: assessing factors that affect the external labor racket (external factors) as well as an organization’s ability to find and secure talent from outside of the organization. Critical component of HARP and strategic planning process.
External factors most frequently monitored include: 1) Economic conditions: low unemployment means organization must be more aggressive in recruiting 2) Market and competitive trends: compensation policies that lag behind competitors’ may result in higher turnover or more difficulties in attracting talent 3) New or revised laws and decisions of courts: raise in min. Wage can inflate cost of labor 4) Social encores (healthcare, childcare): trend toward securing higher education can reduce the size of available external workforce in the SIR (but good in the LORD because of specialized training) 5) Technological changes affecting processes, product and people 6) Demographic trends of an internal& external labor force: may lower diversity based on area.
Steps in HARP Before embarking on an HER planning exercise, current HER levels must be assessed C understanding the internal labor force in the present = basis for many demand/supply estimates Numerous sources of info for identifying existing talent in an organization. Organization chart (macro level info) can provide planners with an understanding of the org structure, business units, career paths CLC then, micro level info: how many workers the company currently has at each level, what existing skill sets the employees have, demographic info, etc. Org. Must forecast future HER demand (# workers and skill sets needed) and forecast HER supply (internal availability of workers) then, identify potential labor imbalance issues L] leads to development & implementation of plans to balance HER FORECASTING THE AVAILABILITY OF CANDIDATES (SUPPLY) How will projected job openings be filled?
Two sources of supply: 1) Internal: present employees who can be trained/transferred/promoted to meet anticipated needs 2) External: people in the labor market not currently working for the organization External factors can create challenges during recruitment of candidates (ex: literacy levels of target population) & can impact how much compensation an org. Must provide to secure top talent. Trends in the external labor force have a direct impact on projections Of internal labor force L] ex: low unemployment times = internal workforce more inclined to seek jobs elsewhere Forecasting the Supply of Internal Candidates MGM. Must determine how many candidates for projected openings will come from within the firm. Skills inventory and Management Inventories: should be updated regularly (2 years) to be useful Skills inventories contain comprehensive info about the capabilities of current employees. Data gathered include age, name, date of employment, position etc.
D identify eligibility of transfer Data pertaining to managerial staff are compiled in management inventories: records summarizing their qualifications, interests, and skills, # and types of employees supervised, etc. Replacement Charts and Replacement Us maries Replacement charts: visual representation of who will replace whom in the event of a job opening. Likely internal candidates are listed with their age, present performance rating, and profitability status C] potential internal candidates for the firm’s most critical positions. Assumes that the organization chart will remain static for a long period of time and usually identifies three potential candidates for a top level position if it became vacant.
To be objective, this info can be supplemented by results of psychological tests ARCS provide a quick reference tool but contain little info so instead, use replacement summaries: lists likely replacements for each position and their relative strengths and weaknesses, as well as info about current position, performance, profitability, age and experience. Succession Planning: ensuring a suitable supply of successors for current and future senior or key jobs so that the careers of individuals can be effectively planned and managed њ extends beyond the replacements chart by focusing on developing people vs.. Just identifying potential replacements. Trotter focus on skills development for a specific list of potential successors within an org. Hen companies were hierarchical and workers remained in a firm for years, executive succession was straightforward C people climbed up the ladder one rung at a time employee turnover and flatter org mean that the line of succession is no longer direct Succession planning requires balancing the organizations top management needs with the potential career aspirations of available candidates. Succession should include: 1) analysis of demand for managers and professionals in the company 2) audit existing execs and projection of likely future supply 3) plan individual career paths based on objective estimate of future needs, performance, etc. Career counseling performance related training & development to prepare workers 5) accelerated promotions; target development at future business needs 6) planned strategic recruitment C] get people who meet future AND current needs Markova Analysis: forecasting internal labor supply by tracking the pattern of worker movements through various jobs and developing a transitional probability matrix forecasting internal supply by specific categories such as position and gender shows actual # and % of workers who remain in each job from 1 year to the next, as well as the proportions remoter, demoted, transferred, and leaving the organization In addition to quantitative data, the skills of current employees must be assessed and skills inventories prepared. From this info, replacement charts/ summaries can be developed.
Forecasting the Supply of External Candidates Maybe no current workers are qualified, or these are jobs that experience significant growth Key factor to determine the # of positions that must be filled externally is the effectiveness of the organization’s training, development, and career planning initiatives[l if workers arena encouraged to expand their capabilities, they may not be ready to fill vacancies as they arise, and external sources must be used To project the supply of outside candidates, employers assess 3 things: 1) General Economic Conditions: impact of natural fluctuations in economic activity which impacts all businesses – interest rates, wage rates, rate of inflation, and unemployment rates. Lower unemployment rate = smaller labor supply = more difficult to recruit employees 2) Labor Market Conditions: demographics of those in the population such as education levels, age, gender, marital status. Remain table and can be forecasted with a high degree of accuracy.
Large portion of population is expected to retire over the next decade, decreasing the size of et labor force this is good for graduating students and immigrants to get jobs 3) Occupational Market Conditions: forecast the availability of potential candidates in specific relevant occupations for which they will be recruiting 0 ex: shortage in the oil and gas sector in Alberta Succession Planning & Family Businesses Multidimensional family controlled businesses often struggle with succession planning 1/3 of family owned businesses survive to the 2nd generation, and Of these, only 1/3 move to 3rd gene Topic for potential retirement planning Of the business owner is difficult to address L] tough decision of determining who will inherit the business 0 many ignore this issue Family business is a great source of pride for business owner.
Concept of retirement is incomprehensible. There’s a risk that the successor will not agree with business owner. Within a family there may not be a qualified or interested successor FORECASTING FUTURE HUMAN RESOURCES NEEDS (DEMAND) HARP must properly forecast the number and type of people needed to meet organization objectives. Demand for a product or service is important, so sales are projected, then volume of production required to meet sales is determined. Staff needed to maintain this volume is estimated Other factors should be considered: 1) Projected turnover as a result of resignations or terminations 2) Quality and nature of workers in relation to what MGM. Sees as the changing needs of the org 3) Decisions to upgrade the quality of products/services or enter into new markets which may change the required worker skill mix 4) Planned technological and admit changes aimed at raising productivity and reducing employee head count, such as the installation of new equipment 5) Financial resources available to each department (ex: budget increase may enable higher wages) In large org, needs forecasting is mainly quantitative and is done by highly trained specialists Qualitative approaches to forecasting range from sophisticated analytical models to informal expert opinions about future needs subjective interpretations or estimates Four Quantitative Approaches: 1) Trend analysis: study of a firm’s past employment levels over a period of years to predict future needs LLC valuable as an initial estimate only because of there factors 2) Ratio analysis: determining future staff needs by using ratios between some causal factor (ex: sales volume) and # of employees needed C] Assumes productivity remains about the same 3) Scatter plot: graph technique used to help identify the relationship between 2 variables CLC if related, then when the measure of business activity is forecast, HER requirements can also be estimated 4) Regression analysis: statistical technique involving the use of a math formula to project future demands based on an established relationship between an organization’s employment level (dependent variable) and some measurable factor of output independent variable) C] determined magnitude and direction of the relationship between variables to develop predictions Two Qualitative Approaches It’s rare that any historical trend, ratio, or relationship will continue unchanged into the future. Judgment is thus needed to modify the forecast based on anticipated changes. 1) Nominal group technique: involves a group of experts meeting face to face. Steps: 1 . Each member independent write down his ideas on the problem/issue (estimates of demand) 2. Going around, each member presents 1 idea until all ideas have been presented & recorded. 3. Clarification is sought as necessary, followed by group discussion and evaluation 4. Each member is asked to rank the ideas, independently and in silence.
Advantage: involve key decision makers, future focus, group discussion facilitates idea exchange Drawbacks: subjectivity, potential for group pressure to lead to a less accurate assessment 2) Delphi technique: judgmental forecasting method used to arrive at a group decisions, involving outside experts as well as organizational employees. Ideas exchanged not face-to-face and feedback I provided and used to fine-tune independent judgments until consensus is reached. 1. Problem is identified and each member submits potential solution by completing a carefully designed questionnaire. Direct face-to-face contact isn’t allowed. 2. Results are compiled at centralized location Each member is given a copy of the results 3. If there are differences in opinion, each person uses feedback from other experts to fine-tune his independent assessment 4. Rd and 4th steps are repeated as often as necessary until consensus is reached useful for long- range forecasting and other strategic planning issues Advantage over nominal technique: the group can critically evaluate a wider range of views Drawbacks: judgments may not efficiently use objective data, time and cost Gap Analysis: Summarizing HER requirements Result Of forecasting process estimate Of SST and LET HER requirements 11 LET plans are general and may not include specific numbers SST plans are more specific and are often depicted in a staffing table: pictorial representation of all jobs within the organization, along with the # of current incumbents and future employment requirements (monthly/yearly) for each: PLANNING AND IMPLEMENTING HER PROGRAMS TO BALANCE SUPPLY AND DEMAND Supply and demand have been estimated so now program planning and implementation begin.
To successfully fill positions internally, organizations must manage performance & careers 1) Performance is managed through designing jobs and quality-of-work-life initiatives, establishing performance standards/goals, coaching/measuring/evaluating/ implementing reward structures 2) To manage careers, policies & systems must be established for recruitment, selection, and placement, and training & development, job analysis, individual assessment, succession plan, etc. Strategies must be formulated to balance supply and demand considerations. Three scenarios: 1) Labor Equilibrium: projected labor demand OLD = rejected labor supply L’S C rare Existing plans to replace outgoing employees should be maintained by promoting or transferring internal members of the organization as well as recruiting external laborers 2) Labor surplus: projected L’S > projected OLD. Solutions: Hiring freeze: openings are filled by reassigning current employees and no outsiders are hired.
Attrition: normal separation of employees from an org because of resignation, retirement or death drawback: takes a long time to reduce the surplus, no control over who stays/leaves early retirement buyout programs: accelerate attrition through a buyout program (incentive) must be anteed carefully to be successful so that key people do not leave the firm make sure early retirement is voluntary (this requires a great deal of money upfront) job sharing: dividing the duties of one position between 2 or more employees benefit: reducing FT to OPT avoids layoffs and gives workers more free time work sharing: workers work 3-4 days a week and receive El benefits on their non-workdays reduced workweek: employees work fewer hours and receive less pay C] retains skilled workforce, lesson the financial and emotional impact of a full layoff, and reduce production cost drawback: difficult to redirect with accuracy how many hours should be scheduled each week payoff: temporary or permanent withdrawal of employment due to business or economic reasons usually permanent but sometimes necessary to reduce the impact of economic downturn Termination: permanent separation from the org because of job performance reasons leave of absence: voluntary, temporary withdrawal of employment with guaranteed job upon return C can be paid or unpaid, but seniority and benefits remain intact Easing the pain of Labor Surplus Management: Researchers found no consistent evidence that downsizing led to improved financial performance.