Workforce planning helps an organization to estimate its future workforce requirements and calculate the numbers, nature and sources of potential employees who might meet that demand.
In other words, it’s about getting the right number of people, with the right skills, in the right place and at the right time.
Effective workforce planning helps councils identify and plan how to tackle their current and future workforce challenges and priorities. It provides a sound basis for developing an effective workforce strategy.
WORKFORCE FORECASTS
ReplyDeleteThe purpose of workforce forecasting is to estimate labor requirements at some
future time period. Such forecasts are of two types: (1) the external and internal
supply of labor and (2) the aggregate external and internal demand for labor. We
consider each type separately because each rests on a different set of assumptions
and depends on a different set of variables.45
Internal supply forecasts relate to conditions inside the organization, such as
the age distribution of the workforce, terminations, retirements, and new hires
within job classes. Both internal and external demand forecasts, on the other
hand, depend primarily on the behavior of some business factor (e.g., student enrollments,
projected sales, product volume) to which human resource needs can
be related. Unlike internal and external supply forecasts, demand forecasts are
subject to many uncertainties—in domestic or worldwide economic conditions,
in technology, and in consumer behavior, to name just a few. The Occupational
Outlook Handbook, published by the U.S. Department of Labor, focuses on
macro forecasts of aggregate demand for various occupations. Figure 5–9 shows
an excerpt of one such forecast for the fastest growing occupations from 2002 to
2012. In the following sections we will consider several micro- or firm-level
workforce forecasting techniques that have proven to be practical and useful.
Forecasting Internal Workforce Supply
ReplyDeleteA reasonable starting point for projecting a firm’s future supply of labor is its
current supply of labor. Perhaps the simplest type of internal supply forecast is
the succession plan, a concept that has been discussed in the planning literature
for over 25 years. Succession plans may be developed for management employees,
nonmanagement employees, or both. The process for developing such a
plan includes setting a planning horizon, identifying replacement candidates for
each key position, assessing current performance and readiness for promotion,
identifying career development needs, and integrating the career goals of individuals
with company goals. The overall objective, of course, is to ensure the
availability of competent executive talent in the future or, in some cases, immediately,
as when a key executive dies suddenly.47 Thus when McDonald’s
Corporation’s CEO died of a heart attack in 2004, the board named the chief
operating officer to that post within hours. It didn’t go so well at other firms,
such as Coca-Cola, Xerox, or Procter & Gamble, where CEO successions were
marked by long searches, poor choices, or fumbled transitions.48 In view of its
importance, let’s examine management and CEO succession further in the next
sections.
Forecasting External Workforce Supply
ReplyDeleteThe recruiting and hiring of new employees are essential activities for virtually
all firms, at least over the long run. Whether due to projected expansion of operations
or normal workforce attrition, forays into the labor market are necessary.
Several agencies regularly make projections of external labor market conditions
and estimates of the supply of labor to be available in general categories.
These include the Bureau of Labor Statistics of the U.S. Department of Labor,