HR Basics: Workforce Planning

Summary

This video script delves into the fundamentals of Workforce Planning, a critical HR management process that aligns labor demand with supply to meet an organization's objectives. It covers identifying workforce issues, forecasting needs, and implementing strategies to ensure the right skills are available at the right time. The script highlights the importance of considering external factors, such as economic cycles and labor market conditions, and internal factors, like employee demographics and performance data, to create a comprehensive workforce plan that supports the organization's mission and goals.

Takeaways

• 📘 Workforce Planning is essential for aligning an organization's staffing needs with its current and future objectives.
• 🔄 It involves balancing labor demand with labor supply, which is influenced by economic cycles and market conditions.
• 📊 The process includes identifying the current workforce status, setting future workforce goals, and implementing actionable plans.
• 🌐 External factors such as economic conditions and industry trends significantly impact workforce planning.
• 📈 Internal factors like employee demographics, skills, performance, and turnover rates are crucial for evaluating workforce strengths and weaknesses.
• 🔍 An audit of current jobs and capabilities is necessary for forecasting future job requirements and potential labor supply.
• 📝 Replacement charts and succession planning are tools for identifying and preparing potential replacements for key positions.
• 🔄 A transition matrix helps track the movement of employees within an organization, aiding in understanding internal workforce trends.
• 🏢 Organizational culture can affect the strategies used to address labor shortages or surpluses and the reactions of employees to these strategies.
• 📉 Productivity is measured by the output relative to inputs, and understanding the productivity ratio helps in planning for different scenarios.
• 🔮 Strategic Workforce Planning typically covers a 3-5 year forecast period and includes scenario planning to prepare for various business outcomes.

Q & A

What is Workforce Planning?

Workforce Planning is the process of ensuring that individuals with the right skills are where they need to be, at the right time to meet a firm's current and future staffing needs.

How does a company balance labor demand with labor supply?

Companies balance labor demand with labor supply by considering factors such as economic conditions, interest rates, inflation, and unemployment rates, which affect the availability of workers and the demand for labor.

What are the key components of a workforce plan?

The key components of a workforce plan include strategy, goals, and actions. Strategy is the execution of an organization's mission, goals are statements of desired outcomes, and actions are the steps taken to reach those goals.

How does the economic cycle affect Workforce Planning?

The economic cycle, with its phases of recession and boom, affects Workforce Planning by influencing the availability of workers and the demand for labor. For example, in a high unemployment market, there may be more qualified applicants, but they might accept lower pay and benefits.

What is the role of geographic and competitive factors in Workforce Planning?

Geographic and competitive factors play a role in Workforce Planning by affecting the supply and demand of labor. Managers must consider local labor market conditions, economic trends, and industry-specific factors when formulating workforce plans.

How does an organization evaluate its internal workforce strengths and weaknesses?

An organization evaluates its internal workforce strengths and weaknesses by conducting a job audit, analyzing current job requirements, and comparing the needs of the organization to the existing and potential labor supply.

What is employee turnover and how does it impact labor demand?

Employee turnover refers to the voluntary and involuntary termination of employees within an organization. It impacts labor demand by either creating a need for new employees (involuntary turnover) or reducing the need (voluntary turnover).

What is the purpose of a replacement chart in Workforce Planning?

A replacement chart is used to identify potential replacement employees for positions that could open up within an organization. It helps companies be prepared to make personnel changes quickly and efficiently.

How does succession planning differ from replacement charts?

Succession planning focuses on identifying employees who might be viable successors for top management positions, whereas replacement charts are used to identify potential replacements for various positions within the organization.

What is a transition matrix and how is it used in Workforce Planning?

A transition matrix is a tool used to track the movement of employees throughout an organization over a certain period of time. It helps managers understand internal movement trends and plan for future staffing needs.

How does a company's organizational culture influence its Workforce Planning strategies?

A company's organizational culture affects its Workforce Planning strategies by influencing the tactics used to deal with labor shortages and surpluses, as well as how employees react to those tactics. For example, companies with paternalistic values might be hesitant to implement layoffs.

What is the significance of understanding the productivity ratio in Workforce Planning?

Understanding the productivity ratio allows a company to plan for different potential scenarios and reflect the growth or decline in the demand for its products. It helps in determining the labor demand needed to achieve a certain output level.

What is the typical time frame for strategic Workforce Planning?

Strategic Workforce Planning usually covers a three to five-year forecast period, aligned with business needs and outcomes. It focuses on identifying workforce implications for current, transitional, and future business objectives.

Outlines

00:00

📈 Workforce Planning Essentials

This paragraph introduces the concept of Workforce Planning as a crucial balancing act for companies to align labor demand with supply. It emphasizes the importance of having the right people with the right skills at the right time. The paragraph explains that workforce planning involves understanding current realities, envisioning future workforce needs, and implementing measurable actions to achieve those goals. It also touches on the influence of external factors such as economic cycles, interest rates, and inflation on workforce availability, and the need to consider these when formulating organizational plans. The summary highlights the significance of internal workforce analysis, including employee demographics, career progression, education levels, performance data, and turnover rates, which are vital for effective workforce planning.

05:02

🛠 Tools for Strategic Workforce Management

This paragraph delves into the tools and strategies managers can use for effective workforce planning. It discusses the challenges of managing internal and external labor factors, including labor shortages and surpluses, and the impact of business strategies on coping with these issues. The paragraph introduces replacement charts and succession planning as methods to identify potential replacements for positions and successors for top management roles. It also mentions the use of transition matrices for tracking employee movement within an organization. Furthermore, it highlights the importance of job design in adding value to the company and the influence of company size, stage of development, and organizational culture on workforce planning activities. The summary underscores the role of productivity ratios in planning for different scenarios and the alignment of strategic workforce planning with business objectives over a forecast period of three to five years.

Keywords

💡Workforce Planning

Workforce Planning is the strategic process of ensuring that an organization has the right number and types of employees with the necessary skills to meet its current and future objectives. It is central to the video's theme, as it discusses how to identify workforce issues, forecast future needs, and implement plans to meet those needs. For example, the script mentions that 'Workforce Planning is an ongoing balancing act companies must balance the demand for labor with available labor supply.'

💡Labor Supply and Demand

Labor Supply and Demand are fundamental concepts in workforce planning. Labor demand refers to the number and types of employees a company needs, while labor supply refers to the availability of current or potential employees. These concepts are integral to the video's narrative, as they discuss how companies must balance these factors to meet their staffing needs. The script states, 'Workforce Planning is dependent on labor supply and demand.'

💡Strategic Execution

Strategic Execution is the implementation of an organization's mission and goals. It is a bridge between the organization and its environment. In the context of the video, strategic execution is crucial for realizing a workforce plan, as it involves taking actions to reach stated workforce goals. The script mentions, 'Strategy is the execution of an organization's mission.'

💡External Workforce Availability

External Workforce Availability pertains to the characteristics of the labor market outside the organization, which can impact workforce planning. The video emphasizes the importance of considering external factors such as economic cycles, interest rates, and inflation when formulating workforce plans. The script notes, 'Workforce Planning requires attention on external workforce availability and characteristics of the internal workforce.'

💡Internal Workforce Analysis

Internal Workforce Analysis involves examining the jobs that need to be done and the capabilities of the people currently available within the organization. This concept is key to the video's message, as it discusses how to compare organizational needs with existing and potential labor supply. The script states, 'Analyzing the jobs that will need to be done and the capabilities of people who are currently available in the organization is the next step in planning.'

💡Employee Turnover

Employee Turnover refers to the voluntary and involuntary termination of employees within an organization. It directly affects a firm's labor demand and is an important consideration in workforce planning. The video script uses this term to illustrate how different types of turnover can impact a company's staffing needs, mentioning 'Employee turnover which directly affects a firm's labor demand includes the voluntary and involuntary termination of employees.'

💡Replacement Charts

Replacement Charts are tools used to identify potential replacement employees for positions that could open up within an organization. The video discusses how these charts help companies prepare for personnel changes and ensure a smooth transition in case of vacancies. The script explains, 'Companies use replacement charts to identify potential replacement employees for positions that could open up within their organizations.'

💡Succession Planning

Succession Planning is the process of identifying employees who might be viable successors for top management positions. It is similar to using replacement charts but focuses on higher-level jobs. The video emphasizes the importance of a well-defined succession process for various reasons, including ensuring continuity in leadership. The script states, 'Succession planning involves identifying who is next in line for higher-level jobs.'

💡Transition Matrix

A Transition Matrix is a tool that provides a model for tracking the movement of employees throughout an organization over time. It helps managers understand internal movement trends, which is vital for workforce planning. The video script mentions this concept, saying, 'A transition matrix provides a model for tracking the movement of employees throughout an organization.'

💡Productivity Ratio

The Productivity Ratio reflects the number of employees needed to achieve a certain output level, such as sales or production. Understanding this ratio allows companies to plan for different scenarios and reflect changes in demand for their products. The video script explains the importance of this concept, noting, 'One of the benefits of understanding the productivity ratio is that it allows you to plan for different potential scenarios.'

💡Strategic Workforce Planning

Strategic Workforce Planning is a forward-looking approach that covers a forecast period, usually three to five years, aligned with business needs and outcomes. It focuses on identifying workforce implications for current and future business objectives and includes scenario planning. The video script highlights this concept, stating, 'Strategic Workforce Planning usually covers a three to five year forecast period aligned to business needs and outcomes.'

Highlights

HR basics is a series of short courses focusing on essential human resource management topics.

Workforce Planning is introduced as a process to ensure the right skills are available at the right time to meet staffing needs.

The concept of balancing labor demand with available labor supply is central to Workforce Planning.

Labor demand and supply are defined as the number of employees needed and the availability of potential employees, respectively.

Workforce Planning involves understanding current workforce reality and envisioning the future workforce.

Strategy and goals are identified as key components for executing an organization's mission and desired outcomes.

External workforce availability and internal workforce characteristics are highlighted as important factors in Workforce Planning.

Economic factors such as interest rates, inflation, and economic growth influence workforce availability.

The difference in finding qualified applicants in varying unemployment markets is discussed.

Geographic and competitive concerns are considered in examining the external workforce.

Internal workforce availability is influenced by factors such as job analysis and existing capabilities.

An audit of expected jobs in the planning period is essential for evaluating internal workforce strengths and weaknesses.

Employee demographics, career progression, education, training levels, and performance data are important for workforce analysis.

Employee turnover, both voluntary and involuntary, is a critical factor affecting labor demand.

Alignment of human resource strategy with workforce planning goals is emphasized for effective planning.

Labor shortages and surpluses are defined and contrasted in terms of supply and demand dynamics.

Replacement charts and succession planning are presented as tools for identifying potential replacement employees and successors.

Transition matrix is introduced as a method for tracking employee movement throughout an organization.

Job design is discussed as a critical aspect of Workforce Planning, focusing on task structuring and value addition.

The impact of company size and stage of development on workforce planning activities is highlighted.

Organizational culture's influence on dealing with labor shortages and surpluses and its effect on employee reactions is discussed.

Productivity is defined in terms of output relative to inputs and its importance in workforce planning is explained.

Strategic Workforce Planning is described, covering a forecast period and focusing on identifying workforce implications.

Scenario planning is mentioned as part of strategic Workforce Planning to prepare for different potential outcomes.

Transcripts

[Music]

HR basics is a series of short courses

designed to highlight what you need to

know about a particular human resource

management topic in today's HR basics we

explore Workforce Planning how to

identify current workforce issues

forecast future needs and implement a

plan to ensure those needs are met

workforce planning is the process of

making sure that individuals with the

right skills are where they need to be

at the right time to meet a firm's

current and future staffing needs in

many ways Workforce Planning is an

ongoing balancing act companies must

balance the demand for labor with

available labor supply Workforce

Planning is dependent on labor supply

and demand labor demand refers to the

number and types of employees the

company needs to meet its current and

future objectives labor supply refers to

the availability of current or potential

employees to perform a company's jobs

Workforce Planning includes identifying

where you are understanding your current

workforce reality where you want to go

identifying the vision for the future of

the workforce and how to get there

bringing the plan to reality through

measurable workforce action using this

process you'll develop the core elements

of a workforce plan strategy is the

execution of an organization's mission a

bridge between the organization and its

environment goals are a statement of

desired outcomes towards which effort is

directed to realize your workforce plan

and actions are the most important

things that can be done to reach your

stated workforce goals Workforce

Planning requires attention on external

workforce availability and

characteristics of the internal

workforce which are impacted by a number

of factors the general economic cycle of

recession and boom effect Workforce

Planning factors such as interest rates

inflation and economic decline or growth

affect the availability of workers

and should be considered when

organizational and workforce plans and

objectives are formulated there is

considerable difference between finding

qualified applicants in four percent

unemployment markets compared to nine

percent unemployment markets as the

unemployment rate rises the number of

qualified people looking for work

increases which often makes it easier

for companies to fill some jobs however

the people who are hired may receive

lower pay and benefits because companies

have more hiring options and leverage

when making workforce plans employers

must consider a number of geographic and

competitive concerns significant changes

in the workforce both in the United

States and globally must be considered

when examining the outside workforce

during planning shifts in the

composition of the workforce combined

with the use of different work patterns

have created workplaces and

organizations that are notably different

from those of the past workforce

planning requires attention on internal

workforce availability which is impacted

by a number of factors analyzing the

jobs that will need to be done and the

capabilities of people who are currently

available in the organization to do them

is the next step in planning the needs

of the organization must be compared to

the existing labor supply as well as the

potential labor supply available outside

the firm the starting point for

evaluating internal workforce strengths

and weaknesses is an audit of the jobs

that are expected in the planning period

a comprehensive analysis of the current

job provides a basis for forecasting

what jobs will be needed in the future

much of the data required for the audit

should be available from existing

staffing and organizational databases an

inventory of organizational skills and

capabilities may consider a number of

elements the following are especially

important individual employee

demographics including age length of

service in the organization and time in

the present job individual career

progression jobs held time in each job

education and training levels promotions

and other job changes and pay rates and

finally individual

performance data including work

accomplishment growth and skills working

relationships and so on employee

turnover which directly affects a firm's

labor demand includes the voluntary and

involuntary termination of employees

within an organization the primary

difference between the two types is

whether the turnover is initiated by the

company involuntary turnover or the

employee voluntary turnover the second

step in the workforce planning process

is figuring out where you want to go

aligning human resource strategy with

workforce planning goals and issues to

some extent managers can control

internal labor factors managers also

have to evaluate factors in the external

environment over which they have less

control these factors relate to the

local labor market economic conditions

and industry trends that impact the

supply and demand of goods services and

employees managers will take a vastly

different action to address labor

shortages and surpluses a labor shortage

exists when the demand for labor exceeds

the available supply of it or demand is

greater than supply in contrast a labor

surplus exists when the supply of labor

is greater than the demand for it so

supply is greater than demand different

business strategies such as these affect

how quickly firms must cope with labor

shortages and surpluses at any point in

time some parts of a company may be

facing shortages of employee talent

whereas others may have a surplus

companies use replacement charts to

identify potential replacement employees

for positions that could open up within

their organizations essentially a

replacement chart shows the employees

who could potentially be moved from one

job to another

if fakin cease occur with such a system

in place a company is ready to make

personnel changes on short notice

succession planning is similar to using

replacement charts but focuses on

identifying employees who might be

viable successors for top management

positions as the name implies succession

planning involves identifying who is

next in line for higher-level jobs it

also requires the company to fill in

information about any skill a potential

successor needs to develop a

well-defined succession process is

important for a variety of reasons a

third tool that managers can use to

understand the internal movement trends

of their workforces

is a transition matrix a transition

matrix provides a model for tracking the

movement of employees throughout an

organization rather than for a single

job over a certain period of time the

third step of Workforce Planning is

figuring out how to get there through

identification and actions including

metrics remember that job design does

the following focuses on decisions about

how jobs should be structured ensures

that job related tasks and activities

are performed in a way that has the most

potential to add value to the company

and its customers and the best design

jobs in the world have no value if

people are not in a position to perform

them in particular a company size and

stage of development will affect the

relative impact of labor shortages and

surpluses as well as who will carry out

the company's workforce planning

activities your responsibilities for

carrying out Workforce Planning

activities will vary depending on the

size and stage of development of your

company a company's organizational

culture affects the different tactics

firms use to deal with labor shortages

and surpluses as well as how their

employees react to those tactics some

companies have cultural values that

prevent them from fully pursuing a

particular course of action companies

that are very paternalistic or extremely

loyal to their employees might be

hesitant to implement layoffs even if

doing so makes sense any discrepancy

between the corporate culture of a firm

and the workforce tactics its managers

use is likely to result in a negative

reaction by a company's employees

productivity refers to the level of a

firm's output products or services

relative to inputs employees equipment

materials and so forth used to produce

the output up

productivity ratio reflects the number

of employees labor demand needed to

achieve a certain output level level of

sales production and so forth one of the

benefits of understanding the

productivity ratio is that it allows you

to plan for different potential

scenarios and reflect the growth or

decline in the demand for your products

strategic Workforce Planning usually

covers a three to five year forecast

period aligned to business needs and

outcomes it focuses on an identifying

the workforce implications current

transition and future of business

strategic objectives and includes

scenario planning

[Music]

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