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Rutgers University
Human Resource Management

Staffing Exam #2 Study Guide- October 29 Chapter 5: Forecasting and Planning  Workforce Planning  Workforce planning: the process of predicting an organization’s future employment needs and the availability of current employees and external hires to meet those employment needs and execute the organization’s business strategy.  Workforce planning is the foundation of strategic staffing because it identifies and addresses future challenges to a firm’s ability to get the right talent in place at the right time to execute its business strategy.  Workforce Planning Process  Identify the business strategy  Articulate the firm’s talent philosophy and strategic staffing decisions  Conduct a workforce analysis  Develop and implement action plans  Monitor, evaluate, and revise the forecasts and action plans  Forecasting Business Activity  An organization’s product demand directly affects its need for labor  Locate reliable, high-quality information sources within and outside of the organization to forecast business activity  Types of business activity forecasts:  Seasonal  Interest rate  Currency exchange  Competitors  Industry and economic  Others  Forecasting Labor Demand  It is a good idea to identify minimal as well as optimal staffing levels when analyzing labor demand  An organization’s demand for labor depends on its forecasted business activity and its business needs, which depend on its business strategy.  Ratio Analysis  Assumes that there is a relatively fixed ratio between the number of employees needed and certain business metrics.  Need consistent historical trends to calculate ratios  Possible ratios:  Production to employees  Revenue per employee  Managers to employees  Inventory levels to employees  Number of customers or customer orders to employees  Labor costs to all production costs  The percent utilization of production capacity to employees  Scatter Plots  Show graphically how two different variables are related  Trend Analysis  Uses past employment patterns to predict future needs  Any employment trends that are likely to continue can be useful in forecasting labor demand  Trend analysis is rarely used by itself in making labor demand forecasts  Judgmental Forecasting  Relies on the experience and insights of people in the organization to predict future needs  Top-down: organizational leaders rely on their experience and knowledge of their industry and company to make predictions about what future staffing levels will need to be. Top managers’ estimates then become staffing goals for the lower levels in the organization.  Bottom-up: uses the input of lower-level managers in estimating staffing requirements. Based on supervisors’ understanding of the business strategy, each level provides an estimate of their staffing needs to execute the strategy. The estimates are consolidated and modified as they move up the organization’s hierarchy until top management formalizes the company’s estimate of its future staffing needs into staffing goals.  Return on Investment Analysis  Estimate the return on investment from adding a new position based on the costs and outcomes resulting from that new hire.  First assign dollar value to the benefits you expect from a new hire for the period of time most appropriate for the position and your organization  Then compare this amount with the cost of adding the new hire  Compare this amount with the value your company will gain to determine the return on the investment of adding the new position.  Forecasting Labor Supply  Combining current staffing levels with anticipated staffing gains and losses results in an estimate of the supply of labor for the target position at a certain point in the future.  Anticipated gains and losses can be based on historical data combined with managerial estimates of future changes.  The external labor market consists of people who do not currently work for a firm.  A firm’s internal labor market consists of the firm’s current employees.  Forecasting the Internal Labor Market  Estimate the competency levels and number of employees likely to be working for the company at the end of the forecasting period.  To forecast internal talent resources for a position, subtract anticipated losses from the number of employees in the target position at the beginning of the forecasting period.  Anticipated losses could be due to promotions, demotions, transfers, retirements, and resignations.  Anticipated gains for the position from transfers, promotions, and demotions are then added to the internal labor supply forecast.  Transition Analysis  A quantitative technique used to analyze internal labor markets and forecast internal labor supply.  A simple but often effective technique for analyzing an organization’s internal labor market, which can be useful in answering recruits’ questions about promotion paths and the likelihood of promotions as well as in workforce planning.  Can also forecast the number of people who currently work for the organization likely to still be employed in various positions at some point in the future.  The analysis is best performed for a limited number of jobs at a time to keep it easily interpretable.  Internal Labor Market Forecasting Methods  Judgment  Talent inventories: summarize each employee’s skills, competencies, and qualifications  Replacement charts: visually shows each of the possible successors for a job and summarizes their present performance, promotion readiness, and development needs.  Employee surveys: identify the potential for increased turnover in the future.  Labor supply chain management: the basic foundation of any supply chain model is to have the right product, in the right volume, in the right place, at the right time, with the right quality  Forecasting the External Labor Market  Organizations monitor the external labor market in two ways  Through their own observations and experiences  Ex. Are the quality and quantity of applicants responding to job announcements improving or getting worse?  By monitoring labor market statistics generated by others  US bureau of Labor Statistics, etc.  Temporary Talent Shortage  Because higher salaries cost the organization more money throughout the new hire’s tenure with the company, hiring inducements that last only as long as the talent shortage does are often better.  Companies often turn to more expensive recruiting methods such as search firms, or lower their hiring standards so that more recruits are considered qualified.  Options include offering hiring incentives such as sign-on bonuses and retention bonuses such as stock options or cash to be paid after the employee has successfully worked with the company for a certain period of time.  Persistent Talent Shortage  If it is likely that a worker shortage will last a number of years, an organization must:  Reduce its demand for the talents that will be in short supply  By increasing their use of automation and technology, and by redesigning jobs so that fewer people with the desired talent are needed.  And/or increase the supply of the qualifications it needs  This is not a fast or practical solution for most organizations.  Temporary Employee Surplus  If slowdowns are cyclical or happen frequently, using temporary or contingent workers who are the first to be let go when business slows can help to provide a buffer around key permanent workers.  Temporary layoffs may need to last more than six months to be cost-effective due to severance costs, greater unemployment insurance premiums, temporary productivity declines, and the rehiring and retraining process.  Losing the investments the organization has already made in hiring and training the laid off workers can also be costly.  Alternatives to layoffs include across-the-board salary cuts or a reduction in work hours, or reallocating workers to expanding areas of the business.  Permanent Employee Surplus  Early retirement incentives, layoffs, and not filling vacated positions can all reduce an employer’s headcount, but with a cost.  Action plans to address a persistent employee surplus may also involve reassignments, hiring freezes, and steering employees away from career in that position to reduce the need for future layoffs  Retraining employees to fill other jobs in the firm can help bring labor supply and demand into balance.  Staffing Planning  Three questions that need to be answered are:  How many people should we recruit?  Staffing yields: the proportion of applicants moving from one stage of the hiring process to the next  Hiring yields: the percent of applicants ultimately hired  What resources do we need?  Workload-driven forecasting: based on historical data on the average number of hires typically made per recruiter  Staffing efficiency driven forecasting: the total cost associated with the compensation of the newly hired employee  How much time will it take to hire?  Continuous recruiting can shorten the hiring timeline  Bath recruiting: recruiting a new applicant pool each time  External cost per hire  External cost per hire: six basic elements account for 90% of the costs to hire to calculate the cost of external hiring:  Advertising expenses  Agency and search firm fees  Employee referral bonuses  Recruiter and applicant travel costs  Relocation costs  Company recruiter costs (prorated salary and benefits if the recruiter performs duties other than staffing)  Internal cost per hire  Internal cost per hire includes four elements:  Internal advertising costs  Travel and interview costs  Relocation costs  Internal recruiter costs  Quiz:  Talent inventories are detailed records or databases that summarize each employee’s skills, competencies, education, training, pervious performance reviews and chances of being promoted. – TRUE  Scatter plots show graphically how two different variables are related. – TRUE  A retail store forecasts a greater need for salespeople during Thanksgiving. This is an example of seasonal forecast. – TRUE  Early retirements programs are a common way of dealing with temporary employee surplus. – FALSE  Top-down judgmental forecasting uses the input of lower level managers to estimate the firm’s total staffing requirements. – FALSE Chapter 6: Sourcing-Identifying Recruits  Sourcing o Sourcing: identifying and locating high potential recruits  Done for internal as well as external job candidates  Involves the analysis of different possible sources of recruits to identify those best able to meet the firm’s staffing goals o Types of Job Seekers:  Active job seekers: people who need a job and are actively looking for information about job openings  Semi-passive job seekers: people who are interested in a new position but only occasionally look actively for one  Passive job seekers: currently employed and are not actively seeking another job, but could be tempted by the right opportunity  Some Recruiting Sources Are o Faster or cheaper o Better at acquiring people who fit the corporate culture and work processes o Better at acquiring high-quality people o Better at acquiring people less likely to leave o Better at acquiring people with previous work experience o Better at generating large numbers of hires o Better at generating professional hires  Recruiting Sources o Internal recruiting sources: locate people who currently work for the company who would be good recruits for other positions  Succession management, talent inventories, employee development, referrals, etc. o External recruiting sources: target people outside the firm  Referrals, advertisements, job fairs, online job boards, career sights, etc.  Internet Data Mining o Boolean searches: internet search technique that allows a search to be narrowed by using special terms before the key words o X-raying: searching for pages that are all on the same host o Flipping or flip searching: identifying people who link to a web site o Web crawlers: web sites that continually search for people with desirable talents and sell access to the sites to recruiters o Networking sites: leveraging your personal connections to generate applicants.  Creating a sourcing plan o Profile desirable employees to identify promising sources  Identify what desirable talent and successful current employees in targeted jobs like to do and how you might reach them if you were to try to recruit them now  Using surveys or focus groups, ask where do they like to go, what media do they use, what organizations do they belong to, and what events do they attend? What web sites and other sources would they use if they were to look for another job? How did they first learn of their first job in your firm? o Perform ongoing recruiting source effectiveness analyses by tracking  Where applicants discovered the vacancy  Where top candidates discovered the vacancy  How many recruits each source generated  What quality of recruits each source generated, and what was the range of recruit quality from each source  What were the demographic characteristics of the recruits from each source  Yield ratios for each source  Conversion rates from applicant to hire for each source  Absence and turnover rates by source  Job performance by source  Promotion rates by source  Data relevant to other staffing goals o Prioritize recruiting sources based on staffing goals and employee profiles  Prioritize recruiting sources based on staffing goals and employee profiles  Prioritizing recruiting sources based on staffing goals and the results of the recruiting source effectiveness analysis  Global Sourcing o Integration: the coordination of a single global staffing strategy with the organization retaining adequate controls over local operations o Differentiation: the need to acknowledge and respect the diversity of local country cultures and expectations and thus giving some latitude to local managers to tailor the strategy to meet the needs of their location o Local employment agencies: can be a useful source of guidance in terms of information on the characteristics of the local labor force  Geographic Targeting o Definition: sourcing recruits based on where they live  Can focus on the local labor market  Can focus on labor markets in locations similar to the organization’s location in terms of city size, cost of living, climate, recreational opportunities, etc.  Can target individuals likely to find the firm’s location attractive o Lower-level positions in an organization are typically filled from the local labor market, and the geographic boundaries tend to widen as the position moves up the organization’s hierarchy.  Quiz: o For firms whose talent philosophy supports promotion from within, internal sourcing is the core of the staffing system. – TRUE o Nepotism is illegal. – FALSE o Passive job seekers are easy to find, they are constantly on the lookout for jobs. – FALSE o Internal recruiting sources locate people who currently work for the company who would be good recruits for other positions. – TRUE o Applicant flow is number and type of applicants coming from reach recruiting source. - TRUE Chapter 7: Recruiting  Recruiting o Recruiting: activities that convert the leads generated during sourcing into job applicants, generate interest in a company and its jobs, and persuade candidates to accept extended job offers  Can be done by recruiters, hiring managers, or employees o Applicant reactions  An important goal of recruitments is to give every applicant a positive feeling about the organization  Organizational and individual perspective are both relevant  Effective recruitment requires considering the applicant’s perspective and needs  Both parties are pursuing a business relationship  Three Types of Fairness o Distributive: the perceived fairness of the hiring or promotion outcome  Did you get the job or promotion? o Procedural: beliefs that the policies and procedures that resulted in the hiring or promotion decision were fair  Respect applicants’ privacy, avoid delays, use job-related assessments, give fair opportunity to perform o Interactional: fairness of the interpersonal treatment and amount of information received during the hiring process  Honesty, respect, recruiter warmth, and informativeness  Spillover Effects o Spillover effects: indirect or unintended consequences of an action o Most job candidates do not get the job promotion- so what happens next?  If they were forced to wait extended periods for pre-scheduled interviews, met unprepared and distracted interviewers, felt that they selection process was unfair, and were not made to feel importa
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