MASTER OF BUSINESS

ADMINISTRATION

HR MANAGEMENT OF THE
FUTURE
Workforce Planning
Assignment II: Staff Projection

Prepared by:
Tawfik AbdelMajeed Aydieh

Supervised by:
Mr. Atef Ramzy
June, 2017
 TABLE OF CONTENTS

1.0 INTRODUCTION .......................................................................................................... 3

2.0 WORKFORCE PLANNING - WORKFORCE ANALYSIS ...................................................... 5
2.1 Step 1: Demand Forecast .................................................................................... 5
2.1.1 Factors Affecting HR Demand Forecasting ..................................................... 6
2.1.2 Methods/Techniques Used to Forecast HR Demand ..................................... 6
2.1.3 Strategy and Actions to Consider ................................................................... 6
2.2 Step 2: Supply Forecast ....................................................................................... 7
2.2.1 Factors Affecting HR Supply Forecasting ........................................................ 7
2.2.2 Methods/Techniques Used to Forecast HR Supply ........................................ 8
2.2.3 Strategy and Actions to Consider ................................................................... 8
2.3 Step 3: Gap Analysis ........................................................................................... 9
2.4 Step 4: Strategy Identification/Development .................................................... 10
2.4.1 Factors Affecting Strategy Identification/Development .............................. 10
3.0 FACTORS AFFECTING WORKFORCE PLANS................................................................. 12
4.0 INTERNAL FACTORS TO CONSIDER IN WORKFORCE PLANNING .................................. 12

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1.0 INTRODUCTION

Organizations need to know how many people and what sort of people they should have
to meet present and future business requirements. This is the function of human
resource planning, or workforce planning as it is sometimes called, especially in the
public sector.

WHAT IS WORKFORCE PLANNING?

Workforce planning is an organized process for:
 Identifying the number of employees and the types of employee skill sets required
to meet organization goals and strategic objectives.
 Developing a plan of action to ensure that the appropriate workforce will be
available to provide quality services.

WORKFORCE PLANNING BENEFITS

The top five benefits are:
 Helped prepare for the growing number of retirements.
 Helped identify gaps between current job skills and job skills needed to perform work
in the future.
 Helped maintain or recruit a diversified workforce.
 Provided an orderly way to address new external or internal environmental changes
that could change the workforce.
 Helped prepare for expansion, restructuring, or reduction in the workforce.

PROJECTION
 Planning: Process of moving forward in time through imagining of future events,
or estimates based on certain assumptions or past trends.
 Psychology: Tendency to attribute one's undesirable ideas, feelings, and motives
to others.

STAFF PROJECTION
Staffing Projections is an estimate of staff structure at a given time in the future, for
example how many of the current employees will still be here at a given time in the future
and how many newcomers do we expect

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Workforce Planning Flowchart

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2.0 WORKFORCE PLANNING - WORKFORCE ANALYSIS

Analysis of workforce data is the key element in the workforce planning process.
Workforce analysis frequently considers information such as occupations, skills,
experience, retirement eligibility, diversity, turnover rates, education, and trend data.
There are four key steps to the workforce analysis (Staff Projection) of the planning
model. These steps are:

2.1 Step 1: Demand Forecast

Demand forecasting (Manpower Forecasting) is the process of estimating the future

numbers of people required and the likely skills and competences they will need.
Forecasting human resource demand is the process of estimating the future human
resource requirement of right quality and right number. Potential human resource
requirement is to be estimated keeping in view the organization’s plans over a given
period of time.

Job analysis and forecasting about the quality of potential human resource facilitates
demand forecasting. So, existing job design must be thoroughly evaluated taking into
consideration the future capabilities of the present employees.

At a more practical level, forecasting demand involves determining the numbers and
kinds of personnel that an organization will need at some point in the future. Most
managers consider several factors when forecasting future personnel needs. The demand
for the organization’s product or service is paramount. Thus, in a business, markets and
sales figures are projected first. Then, the personnel needed to serve the projected
capacity are estimated.

The Demand Analysis can provide one of the greatest

benefits in workforce planning because it offers the
chance for an agency to re-examine longstanding
assumptions about the purpose and direction of its
programs in light of the changes taking place.

The Demand Analysis identifies company’s

workforce needs:
 The starting point for Company Demand Analysis
is based on the number of staff we currently
have – not on the number we need.
 The Demand Analysis shall identify not only the
numbers of staff needed (Staffing Assessment),
but also the competencies that are critical to
successful job performance (Competency
Assessment).
 The focus of the Demand Analysis is identifying
the functions that the company shall perform,
not just the people needed to carry out the
functions.
 The Demand Analysis should also examine
changes in functions. These changes might have
a significant impact on the size and kind of
workforce needed in the future.

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2.1.1 Factors Affecting HR Demand Forecasting
Demand forecasting is affected by a number of external and internal factors. Forecasting
(Projecting) the number and type of people needed to meeting organization objectives. A variety
of organization factors including, competitive strategy, technology, structure and productivity
can influence the demand for labour. For example, utilization of advanced technology is generally
accompanied by less demand for low skilled workers and more demand for knowledge workers.
External factors such as business cycles-economic and seasonal trends can also play a role in
human resource demand.
Human Resource Demand Forecasting depends on several factors, some of which are:
 Employment trends;  Replacement needs;  Productivity;
 Absenteeism; and  Expansion and growth

2.1.2 Methods/Techniques Used to Forecast HR Demand

Due to the high number of environment and organization-specific variables that influence
demand analysis, there is no single correct way to estimate future HR demand. Instead, a number
of quantitative and qualitative methods are available to aid HR professionals in this step.
Ultimately, the decision of which method to use will be dependent on the size of the organization,
the resources available, and the expertise of the HR planning team. Quantitative techniques for
determining HR requirements include trend analysis, ratio analysis, and regression analysis.
Qualitative approaches to forecasting HR demand require managers to use their experiences to
make expert judgements about future forecasts. This can occur in the form of a Delphi method,
a nominal group technique, or a scenario analysis.
Summary of Methods/Techniques
There are number of techniques of estimating/forecasting human resources demand:
Quantitative Techniques Qualitative Techniques
 Trend analysis  Delphi method
 Ratio analysis  Nominal group technique
 Regression analysis  Scenario analysis

2.1.3 Strategy and Actions to Consider

Strategy Actions to Consider

Examine Internal/External Demographic
Environmental Factors  Identify significant external demographic issues that are likely to influence the demands
placed on the organization.
Technological
 Investigate how technology can and will be used to enhance service provision.
 Identify jobs that will be affected by technological enhancements.
 Determine whether any changes in technology will affect the number of employees
needed to do the work or the type of skills needed.
Economic
 Are there economic considerations that have particular relevance to the organization and
its provision of services?
Labor market
 Identify labor trends.
 Identify issues associated with the use of non-permanent staff, including cost and supply.
Summary
 Will the way the work is being done need to change?
 Will new programs be added or deleted?
 Will current employees have the necessary skills to do the work in the future?
 Will the workload change?
 Will more or fewer employees be needed?

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2.2 Step 2: Supply Forecast

Supply Forecasting measures the number of people likely to be available from within and
outside the organization, having allowed for absenteeism, internal movements and
promotions, wastage and changes in hours and other conditions of work. The supply
analysis covers areas like: Existing number of people employed by occupation, skill and
potential, source of supply from within the condition and Effect of changing condition of
work and absenteeism.

The Supply Analysis identifies the Company’s

available staffing resources – both now and in the
future. In the Supply Analysis we will:
 Focus on the current staffing level in the
targeted job classification(s).
 Identify all the personnel actions that can impact
future staffing levels (retirements, resignations,
terminations, promotions, demotions, transfers,
etc.)
 Factor in these actions to project future staffing
levels.
As with the Demand Analysis, the Supply Analysis
includes a Staffing Assessment and a Competency
Assessment.

2.2.1 Factors Affecting HR Supply Forecasting

Forecasting supply involves determining what personnel will be available. The two
sources are internal and external: people already employed by the firm and those outside
the organization. Factors managers typically consider when forecasting the supply of
personnel include promoting employees from within the organization; identifying
employees willing and able to be trained; availability of required talent in local, regional,
and national labor markets; competition for talent within the field; population trends.
Under forecasting supply there are internally and externally factors for organization in
supply of human resource.

Internal supply forecast is a succession planning or the career plans archest rated by
organization. This step is vital as it conveys an inventory of the firm’s current and
projected competencies. These internal factors are:
 Employee turnover rates, refers simply to the movement of employees out of an
organization. It is a determinant of labour supply. As employees’ turnover, the supply of
labour goes down
 Skill inventories (Talent inventories) prepare list of employees showing each employees’
education, past experience, vocational interests, specific abilities and skills and job tenure.
Confidentiality is vital in setting up such inventory we prepare an up to date skill inventories
allowing an organization to quickly much forthcoming job opening with employee
backgrounds. When data a gathered on managers, these inventories are called management
inventories
 Succession planning is the process of identifying developing and tracking key individuals so
that the May eventually assume top level position. Succession plans may be developed for
management employees, on management employees or both. The process for developing

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 such a plan includes setting a planning horizon, identifying replacement cad indents for each
key position, assessing current performance and readiness for promotion, identifying career
development needs. The overall objective is to ensure the availability of competent executive
talent in the future.
External supply consists of those of individuals in the labor force who is potential recruits of the
firm. The skill levels determine the relevance of the labor in a global way. When an organization
lacks an internal supply of employees for promotions, or when the organization is staffing entry
level positions managers must consider the external supply of labor. Factor that influences
external supply for labor are:
 Demographic changes in the population  National and regional economic
 Education level of the workforce  Technological development
 Industry and expected growth rate and levels

2.2.2 Methods/Techniques Used to Forecast HR Supply

The most important techniques for forecasting of human resource supply are Succession
analysis and Markov analysis.
2.2.3 Strategy and Actions to Consider

Strategy Actions to Consider

Determine the workforce profile
Determine the Internal
 Identify employees’ ages, genders, ethnicity factors, education levels, and lengths of
Supply Factors
service.
 Determine the skill profile. Agencies may want to compare the best, average, and poor
performers. What knowledge, skills, and abilities do high performers use to achieve
success?
 Identify workforce management issues that affect the internal labor market.
Consultation
 Meet with or survey managers to identify segments of the workforce that are currently or
potentially vulnerable.
Determine Future Supply Projection
Factors  Review retention, turnover, promotion patterns, and leave usage.
 Determine whether the organization’s turnover rate affects its ability to conduct its work.
 Review retirement patterns.
 Determine the projected workforce needed based on expected turnover without hiring
replacements.
 Project what the skill and experience level of the current workforce will be in the future.
 What did data from the employee exit surveys show?
 How have retirements, hiring freezes, or layoffs affected the organization?
 What challenges might affect the organization’s ability to recruit and retain mission-
critical skills?

Estimating Internal Labor Supply for a Given Unit

The figure illustrates that internal supply

forecasting can be estimated based on the
following:
(a) Current Staffing Level
(b) Projected Outflows This Year
(c) Projected Inflows This Year

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2.3 Step 3: Gap Analysis

Gap analysis is the process of comparing the workforce supply projection to the
workforce demand forecast. An analysis should consider the composition of the
workforce, including demographic characteristics, geographic location, size, and
employee competencies level. The organization will establish workforce strategies based
on the results of this analysis.
Analysis results may show one of the following:
 A gap (when projected supply is less than forecasted demand), which indicates a
future shortage of needed workers or skills. It is important to know what critical jobs
will have gaps so the necessary training or recruiting can be anticipated.
 A surplus (when projected supply is greater than forecasted), which indicates a future
excess in some categories of workers and may require action. The surplus data may
represent job classifications or skills that will not be needed in the future or at least
not be needed to the same extent.
Measure the extent of any gaps for each classification and competency set. Identify
where candidates will come from to fill these gaps.

Gap Analysis Process Table

How What
Assess The current supply of human capital
Factor in Variables and assumptions
To come up with Supply of human capital, then
Compare to Demand
To come up with Gaps and Surpluses

Demand/Supply Analysis and Gap Analysis Process

The Gap Analysis brings together the

data generated by the Supply Analysis
and the Demand Analysis. In this step
you will:
 Assess the differences between the
current and future workforce
requirements.
 Look at these differences from both
the competency perspective and
the staffing perspective.
 Build the foundation for the Gap-
Closing Strategies step of the
Workforce Planning process.

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2.4 Step 4: Strategy Identification/Development

Once an organization identifies a workforce gap, it needs to develop and implement

effective strategies to fill the gap. Critical gaps should be analyzed with care to ensure
that timely action is taken before these gaps become a problem for the organization.

A wide range of strategies to address future gaps and surpluses exists. Strategies include
the programs, policies, and practices that assist agencies in recruiting, developing and
retaining the critical staff needed to achieve program goals.

Strategies can fall into the broad categories of:

 Position classification actions, including redefining title series, adding new job
classifications, reallocating job classes or job class series, and rewriting job
descriptions to better reflect future functional requirements.
 Salary actions, including equity adjustments, promotions, and merit increases that
may be needed.
 Staff development strategies to prepare employees for specific positions, titles, or
occupations.
 Recruitment/selection strategies to find and hire recent school graduates or
qualified candidates from other agencies or the private sector.
 Retention strategies to encourage employees to stay in the organization.
 Organizational interventions such as redeployment of staff or reorganization.
 Succession planning strategies to prepare to ensure that there are highly qualified
people capable of filling critical positions. See Appendix B for additional
information.
 Knowledge transfer strategies to capture the knowledge of experienced
employees before they leave the organization. See Appendix B for additional
information.

Strategies should be kept to a manageable number so they can be achievable, and they
should be prioritized to allow an organization to focus its resources on the most
important strategies first.

2.4.1 Factors Affecting Strategy Identification/Development

There are several factors that influence which strategy or, more likely, which combination
of strategies should be used. Some of these factors include, but are not limited to, the
following:

Is there enough time to develop staff internally for anticipated vacancies or

Time
new skill needs, or is special, fast-paced recruitment the best approach?

The availability of adequate resources will likely influence which strategies are
Resources
used and to what degree, as well as priorities and timing.

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Internal depth – Does existing staff demonstrate the potential or interest to develop new
skills and assume new or modified positions or is external recruitment needed?

 In-demand competencies – What competition exists for future competencies that

are needed? Will the organization need to recruit for these competencies or
develop them internally?

 Workplace and workforce dynamics – Do particular productivity and retention

strategies need to be deployed to address workplace climate issues (e.g., employee
satisfaction levels), workforce age, diversity, personal needs, etc.?

 Job classifications – Do the currently used job classifications and position

descriptions reflect the future functional requirements and competencies needed?

Demand-side Strategies Supply-side Strategies

Demand-side strategies reduce the number of positions Supply-side strategies help fill the remaining staffing
that need to be filled. They include: gap once demand-side strategies have reduced the
number of positions that must be filled. They include:

Retention: Reduce turnover through Recruitment: Expand applicant pools through

retention incentives and employee enhanced marketing (e.g., broadening the
engagement strategies. target recruitment area, increasing
advertising venues, and improved branding
strategy).

Reorganization: Reduce the number of Modified Qualifications: Expand applicant

management positions by expanding pools by considering a broader range of
supervisory span of control experience and education.

Work Process Redesign: Reduce staffing Workforce Development: Grow future

needs by streamlining workflows and applicant pools by supporting schools and
methods apprenticeship programs.

Employee Performance Management: Training and Development: Keep current

Reduce staffing needs by improving individual staff up-to-date in their knowledge and skills
productivity through on-the-job and other training and
development programs.

Succession Planning: Grow new internal

applicant pools through training and
development programs.

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3.0 FACTORS AFFECTING WORKFORCE PLANS

The most carefully laid workforce plans can be affected by internal and external change
anytime, so forecasting and flexibility are essential for effective planning and adapting as
required. In order to do this, HR managers must be aware of what’s going on within the
company, the industry and the wider market in relation to the factors that influence
change.

Factors affecting workforce plan are:

Political: From a shift in local public opinion to a change in government or even a new industrial
world superpower entering the market, politics influence how much funding is available, how
much tax must be paid, minimum wage rates, how markets are controlled and the quality and
quantity of staff available for hire. When planning ahead, we need to consider likely changes to
markets, budgets and availability of suitable applicants as a result of recent or anticipated political
influences.
Economic: How much money is available for salaries, training and equipment is the most
immediate concern in workforce planning. However, external economics plays an equally critical
role.
Social: Several social factors may influence workforce planning, but we need to take into account
equalities and diversity in particular. Where there is a clear discrepancy of one social group, it’s
a good idea to build in ways of opening up new opportunities.
Technological: New technology brings new skills requirements, so companies always need to
be aware of proficiencies and training needs when planning human resources. New products and
services also may require recruiting highly skilled employees or training existing employees to
meet the need. HR managers should be aware of new equipment or knowledge be needed so
they can build the required skills, and most likely salary enhancements, into the plan.
Legal: Employment law is the most significant sector of the legal system that affects workforce
planning, and it changes all the time. In most cases, there is plenty to time to implement changes
to policy, as the law can take a while to take effect. Company should be up to date, and have an
employment law specialist available to consult if necessary. Employment law changes must be
reflected in company policy and implemented on the ground by supervisors and managers, so we
may need to incorporate another training need into the workforce plan.
Environmental: Environmental factors might include where our business is located in relation
to finding sufficient appropriate staff or changes to the environment that mean a need for more
or fewer employees.

4.0 INTERNAL FACTORS TO CONSIDER IN WORKFORCE PLANNING

Keeping track of internal influences on our employee management needs helps company
maintain the most effective staffing levels and maximize productivity.
The following should be considered:
Organizational Structure: If we haven’t reviewed our organizational structure lately or have
never created a comprehensive organization chart, consider doing so. The key to maximizing the
effectiveness of our human resources function starts with determining our optimal staffing
needs. Create an organization chart, ranking each position and clearly delineating who works for
whom. Write a job description for each position to determine if every task we need performed
has been assigned. Don’t be afraid to include positions for which we don’t have employees or to

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leave out staff members who don’t fit into our optimal organization chart. Once we see these
holes or redundancies, we can better plan how to address them.
Budget: An obvious internal factor to consider when looking at our staff planning is our budget.
Some positions are demand-sensitive, such as those in design production, QA&HSE and
construction management/supervision. we’ll get the money to fill those positions from increased
revenues. Other positions that don’t generate revenue but still bring value require we to find the
money for those positions. To stretch our staffing budget, offer a smaller base pay. Add voluntary
benefits that cost we nothing, can reduce our payroll taxes and offer our employees attractive,
low-cost benefits they can pay for or fund, such as health insurance.
Skill Levels: As our company grows, we might have additional administrative or operational
needs that can’t be fulfilled by our current workers. Instead of hiring subs or additional
employees, consider offering staff training. Add employee development to our workforce
planning, including on-site training, and sending workers to seminars and workshops.
Productivity: To get the most out of our workers, create the most positive workplace possible.
Offer clear job descriptions and annual reviews, a wellness program, morale-building activities
such as contests or outings, an employee newsletter and frequent communications about
individual, departmental or company successes.
Compliance: Work with our insurance company, local fire department, a security professional
and an employment expert to make sure we cover legal requirements as they apply to our
workers. This includes following labor laws and regulations, creating a safe and secure office
space, store, plant or warehouse, instituting and enforcing company policies and procedures and
paying all required taxes and insurance.

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