Stanley M. Gully - Staffing Forecasting and Planning

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Library of Congress Cataloging-in-Publication Data

Phillips, Jean, 1969

Staffing forecasting and planning / Jean M. Phillips, Stanley M. Gully

p. cm. (Staffing strategically series)

Includes bibliographical references and index.

ISBN 978-1-58644-158-6

1. Personnel management. 2. Employment forecasting. 3. Manpower planning. 4. Strategic planning. I. Gully, Stanley Morris. II. Title.

HF5549.P4596 2009

658.301dc22

2009030885

10 9 8 7 6 5 4 3 2 1

09-0476

Staffing Strategically Series

A SSESSING E XTERNAL J OB C ANDIDATES

A SSESSING I NTERNAL J OB C ANDIDATES

T HE L EGAL C ONTEXT OF S TAFFING

S TAFFING F ORECASTING AND P LANNING

S TAFFING TO S UPPORT B USINESS S TRATEGY

W orkforce planning is the foundation of strategic staffing because it identifies and addresses current and future challenges to a firms ability to get the right talent in place at the right time. Forecasting and planning can increase an organizations ability to improve its capabilities, reduce its costs, and survive any economic environment. Talent and its acquisition are investments, not costs. By enabling the firm to acquire and retain the talent it will need to execute its business strategy, staffing planning is essential to a firms ultimate strategic execution and financial performance. Forecasting and staffing planning ensures that the right talent will be in place at the right time, and enhances the return on the firms investment in its talent.

Despite the clear advantages of forecasting and planning, for many organizations, staffing is usually reactive and geared toward filling an open position. To maximize a firms chances to hire the right people, and to compete successfully in a competitive global-talent arena, staffing must be strategic and proactive. Jim Robbins, president and CEO of Cox Communications, puts it this way: We spend four months per year on the budget process, but we hardly spend any time talking about our talent, our strengths and how to leverage them, our talent needs and how to build them. Everyone is held accountable for their budget. But no one is held accountable for the strength of their talent pool. Isnt it the talent we have in each unit that drives our results? Arent we missing something?

It is widely predicted that organizations will face a challenging labor situation for many jobs in the coming years due to projected Baby Boomer retirements and lower birth and immigration rates. As a result, some organizations may be unable to staff current operations or to expand. The competition for good employees is particularly fierce for smaller companies that, despite providing the majority of new jobs may have a more difficult time hiring in general. Forecasting and planning lets firms better manage both talent shortages and surpluses. By understanding business cycles, business needs, current talent in the firm, and pipelines of future talent, human resources can proactively reduce the impact of talent competition, instead of just reacting when talent surpluses or shortages occur.

The availability of the talent needed to execute a desired business strategy will influence whether that strategy is ultimately successful. If a company does not currently have, or if it cannot obtain the talent it needs to execute its diversification strategy, it is unlikely to succeed. Similarly, a manufacturing organization that cant hire the workers it needs to execute its labor-intensive strategy may be forced to change its business strategy, adopt slower growth goals, or manufacture a different product requiring more readily available skills. A shortage of skilled labor may even require large investments of capital to automate the manufacturing processes to reduce the organizations need for skilled labor. In labor-intensive organizations such as health care, care may be denied, hospital beds may be closed, and limited opportunities for outpatient care could occur without the needed professional and technical staff. Internal and external forecasting and planning enhance an organizations ability to match its staffing practices to its strategic needs. Table 1 summarizes some common goals addressed by staffing forecasting and planning.

In this book, we discuss the importance of understanding the organizations business strategy, goals, and competitive environment to identify what talents the firm will need. Ensuring that the right people are in place at the right time requires understanding and forecasting the firms labor demand and maintaining an awareness of relevant pipelines of labor supply and talent. Action plans can then be developed to address any gaps between labor supply and labor demand. After reading this book, you will have a good understanding of the workforce forecasting and planning process.

W orkforce planning is the process of predicting an organizations future employment needs, as well as the availability of current employees and external hires to meet those employment needs, develop talent capabilities, and execute the organizations business strategy. The workforce planning process typically includes five steps: