Personnel Planning and

Recruiting
Workforce Planning and Forecasting
 Workforce (or employment or personnel) planning:
Workforce planning should precede recruitment and selection.
After all, if you don’t know what your employment needs will be in the next
few months or years, why are you hiring?
Workforce planning
First, Towers Watson reviews the client’s business plan and workforce
data (for instance, on how sales influence staffing levels).

Second, they identify what positions the firm will have to fill and potential
workforce gaps, by making workforce supply and demand projections;

Third, they develop a workforce strategic plan; here they prioritize key
workforce gaps (such as, what positions will have to be filled, and who do
we have who can fill them?) and identify specific (training and other)
plans for filling any gaps.
 Workforce planning shouldn’t occur in a vacuum.
Instead, workforce/employment planning is best
understood as an outgrowth of the firm’s strategic and
business planning.
 For example, plans to enter new businesses, to build
new plants, or to reduce activities will all influence the
number of and types of positions to be filled.
Forecasting Personnel Needs (Labor
Demand):
 Managers consider several factors. For example, when Dan Hilbert took
over staffing at Valero Energy, he reviewed Valero’s projected
retirements, growth plans, and turnover history.
 The basic process for forecasting personnel needs is to forecast
revenues first. Then estimate the size of the staff required to support
this sales volume.
 Trend analysis
For example, compute the number of employees at the end of each of the
last 5 years in each subgroup (like sales, production, secretarial, and
administrative) to identify trends.
Ratio Analysis
 Another simple approach, ratio analysis, means making forecasts
based on the historical ratio between (1) some causal factor (like sales
volume) and (2) the number of employees required (such as number of
salespeople).

For example, suppose a salesperson traditionally generates $500,000 in

sales. If the sales revenue to salespeople ratio remains the same, you
would require six new salespeople next year (each of whom produces an
extra $500,000) to produce a hoped-for extra $3 million in sales.
Managerial Judgment:

Few historical trends, ratios, or relationships will continue unchanged into

the future. Judgment is thus needed to adjust the forecast.
Important factors that may modify your initial forecast of personnel
requirements include decisions to upgrade quality or enter into new
markets; technological and administrative changes resulting in increased
productivity; and financial resources available, for instance, a projected
budget crunch.
Forecasting the Supply of Inside
Candidates
 Personnel replacement charts

 position replacement card

 Markov Analysis
Forecasting the supply of outside
candidates:
Forecasting workforce availability depends first on the manager’s own
sense of what’s happening in his or her industry and locale.
For example, unemployment rates above 7% a few years ago signaled to
HR managers that finding good candidates might be easier.
Predicting workforce Monitoring:
For example, Intel Corporation conducts semiannual “Organization
Capability Assessments.”
 Workforce planning therefore often involves paying continuous attention
to workforce planning issues. Managers call this predictive workforce
monitoring. For example, Intel Corporation conducts semiannual
“Organization Capability Assessments.”
 Matching Projected Labor Supply and Labor Demand Workforce planning
should logically culminate in a workforce plan. This plan lays out the
employer’s projected workforce and skills gaps, as well as staffing plans
for filling these gaps. For example, the plan should identify the positions
to be filled; potential internal and external candidates or sources for
these positions; the training and promotions moving people into the
positions will entail; and the resources that implementing the plan will
require, for instance, in recruiter fees, estimated training costs,
relocation costs, and interview expenses.
 Succession Planning
 Succession planning involves developing workforce plans for the company’s
top positions. Succession planning is the ongoing process of systematically
identifying, assessing, and developing organizational leadership to enhance
performance.
 Three steps: identify key position needs, develop inside candidates, and
assess and choose those who will fill the key positions.
 First, based on the company’s strategic and business plans, top management
and the human resource director identify what the company’s future key
position needs will be.
 After identifying future key positions, management turns to creating
candidates for these jobs. “Creating” means identifying inside or outside
candidates
 Finally, succession planning requires assessing these candidates and
selecting those who will actually fill the key positions.
 Example: At Dole Foods, the new president’s strategy involved
improving financial performance by reducing redundancies and
centralizing certain activities, including succession planning. Dole
contracted with application system providers (ASPs) to handle things like
payroll management. For succession management, Dole chose software
from Pilat NAI. The Pilat system keeps all the data on its own servers for
a monthly fee. Dole’s managers access the program via the Web using a
password. They fill out online résumés for themselves, including career
interests, and note special considerations such as geographic
restrictions.
Case study