Workforce Planning<br />Presented by Senga Consulting Inc.<br />
Participants will learn the…<br /><ul><li>Categories of HR forecasting.
Rationale for attention to specialist, technical and executive personnel in forecasting.
Impact of environmental and organizational variables on HR demand and supply.
Various demand forecasting techniques.
Methods of determining external and internal HR supply.
Relationship between forecasting and succession planning.</li></ul>2<br />Senga Consulting Inc. Copyright © 2009 | All Rig...
Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />Workforce Planning<br />3<br />
Workforce Planning<br /><ul><li>Business process for ensuring an organization has access to talent to ensure future success.
Access to talent includes considering all access sources.
Talent: The skills, knowledge, predisposition and ability to undertake required activities including decision making.</li>...
Getting Started<br /><ul><li>Obtain support from senior leaders.
Communicate benefits and results to managers.
Establish a workforce planning team of knowledgeable employees from different functional areas and levels.
Develop and implement a plan.
Solicit continuous feedback for ongoing improvements. </li></ul>5<br />Senga Consulting Inc. Copyright © 2009 | All Rights...
Workforce Planning Steps<br />Step 1<br />Supply Analysis<br /><ul><li>Staffing levels
Workforce skills
Workforce demographics
Employment trends</li></ul>Step 2<br />Demand Analysis<br /><ul><li>Workforce skills needed
Staffing patterns
Anticipated workload changes</li></ul>Step 3<br />Gap Analysis<br /><ul><li>Compare supply analysis with demand analysis
Determine future gaps (shortages) and surpluses (excesses)
Identify future changes in workforce demographics
Identify areas in which management action will be needed</li></ul>Step 4<br />Strategy Development <br /><ul><li>Plan
Recruiting
Succession
Employee development and retraining
Organizational change</li></ul>6<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
Workforce Planning Model<br />7<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
Environmental Scanning<br />Cost and availability of capital<br />Government Regulations<br />Labour availability<br />Com...
Techniques<br /><ul><li>Scanning – identify early signals of changes and trends.
Monitoring – follow key indicators that affect the organization.
Forecasting – after monitoring, project the impact on the organization.
Assessing – describe the impact of the monitored trend on the organization, make a judgment of the probability of outcomes...
Forecasting Methods<br /><ul><li>Trend Analysis – a quantitative approach to forecast future personnel needs based on extr...
Delphi Technique –forecasts and judgments of a group of experts are solicited and summarized to determine the future of em...
Impact Analysis –trends are analyzed by a panel of experts who then predict the probability of future events.
Scenario Planning –creating future scenarios that differ radically from those created by extrapolation of present trends</...
Environmental Factors<br /><ul><li>Economic climate –the economy affects HR management
Globalization – affects sovereignty, prosperity, jobs, wages, and social legislation
Political and legislative factors – influence organizations with changes to laws and regulations
Technological factors –new issues include online HR functions, identity theft, e-learning, answering email on vacations
Demographic factors –include age, gender, family status, education, economic status, labour market
Social and cultural factors</li></ul>11<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
Exercise<br /><ul><li>What key environmental factors affect your organization’s ability to achieve its goals?
What are the HR implications?</li></ul>12<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />The HR Forecasting Process<br />13<br />
Learning Topics<br /><ul><li>Categories of HR forecasting activity and their relationship to the HR planning process
Rationale for attention to specialist, technical, and executive personnel groups in the HR forecasting process
Impact of environmental and organizational variables on the accuracy and time period of estimates derived from future esti...
Various stages in the process of determining net HR requirements</li></ul>14<br />Senga Consulting Inc. Copyright © 2009 |...
Forecasting Activity Categories<br />15<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
Human Resources Supply and Demand<br />16<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
Key Personnel Analyses<br />17<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
Designated Group<br />Receive the most discrimination within organizations<br />18<br />Senga Consulting Inc. Copyright © ...
5 Stages of the Forecasting Process<br />19<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
Organizational Factors<br /><ul><li>Corporate mission, strategic goals
Operational goals, production budgets
HR policies
Organizational structure, restructuring
Worker KSAs, competencies, expectations
HRMS level of development
Organizational culture, climate, job satisfaction, communications
Job analysis</li></ul>20<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
Environmental Factors<br /><ul><li>Economic situation
Labour markets and unions
Government laws and regulations
Industry and product life cycles
Technological changes
Competitor labour usage
Global market for skilled labour
Demographic changes</li></ul>21<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
Time Horizons<br />Medium-run<br />– 2 - 5 years<br />Long-run<br />– 5 or more years<br />Current <br />– up to 1 year<br...
Ascertain HR Supply<br />23<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
Determine NET HR Requirements<br />External supply requirements =<br />replacement + change supply components<br />Change ...
Example<br />External supply = current workforce x (replacement % per yr + change % per yr)<br />Surplus =<br />1000 x (4 ...
Your Turn<br />External supply = current workforce x (replacement % per yr + change % per yr)<br />Surplus =<br />10,000 x...
HR Surplus/Deficit<br /><ul><li>Internal workforce supply exceeds the organization’s requirement or demand for personnel
Demand exceeds the current resources available in the organization's workforce</li></ul>27<br />Senga Consulting Inc. Copy...
Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />HR Demand<br />28<br />
Learning Topics<br /><ul><li>Demand forecasting
Linkages between labour demand forecasting and the supply
Various demand forecasting techniques</li></ul>29<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
HR Demand<br />Projected human resources requirement<br />30<br />Senga Consulting Inc. Copyright © 2009 | All Rights Rese...
Trend Analysis<br /><ul><li>Historical relationship between a business index (e.g., sales, contracts, units sold etc.) and...
Effective Trend Analysis<br />Five steps to conducting an effective index/trend analysis:<br />Select the appropriate busi...
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Workforce Planning

  1. 1. Workforce Planning<br />Presented by Senga Consulting Inc.<br />
  2. 2. Participants will learn the…<br /><ul><li>Categories of HR forecasting.
  3. 3. Rationale for attention to specialist, technical and executive personnel in forecasting.
  4. 4. Impact of environmental and organizational variables on HR demand and supply.
  5. 5. Various demand forecasting techniques.
  6. 6. Methods of determining external and internal HR supply.
  7. 7. Relationship between forecasting and succession planning.</li></ul>2<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  8. 8. Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />Workforce Planning<br />3<br />
  9. 9. Workforce Planning<br /><ul><li>Business process for ensuring an organization has access to talent to ensure future success.
  10. 10. Access to talent includes considering all access sources.
  11. 11. Talent: The skills, knowledge, predisposition and ability to undertake required activities including decision making.</li></ul>4<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  12. 12. Getting Started<br /><ul><li>Obtain support from senior leaders.
  13. 13. Communicate benefits and results to managers.
  14. 14. Establish a workforce planning team of knowledgeable employees from different functional areas and levels.
  15. 15. Develop and implement a plan.
  16. 16. Solicit continuous feedback for ongoing improvements. </li></ul>5<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  17. 17. Workforce Planning Steps<br />Step 1<br />Supply Analysis<br /><ul><li>Staffing levels
  18. 18. Workforce skills
  19. 19. Workforce demographics
  20. 20. Employment trends</li></ul>Step 2<br />Demand Analysis<br /><ul><li>Workforce skills needed
  21. 21. Staffing patterns
  22. 22. Anticipated workload changes</li></ul>Step 3<br />Gap Analysis<br /><ul><li>Compare supply analysis with demand analysis
  23. 23. Determine future gaps (shortages) and surpluses (excesses)
  24. 24. Identify future changes in workforce demographics
  25. 25. Identify areas in which management action will be needed</li></ul>Step 4<br />Strategy Development <br /><ul><li>Plan
  26. 26. Recruiting
  27. 27. Succession
  28. 28. Employee development and retraining
  29. 29. Organizational change</li></ul>6<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  30. 30. Workforce Planning Model<br />7<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  31. 31. Environmental Scanning<br />Cost and availability of capital<br />Government Regulations<br />Labour availability<br />Competition<br />Technology<br />Supplier power<br />Globalization<br />Customer expectations<br />8<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  32. 32. Techniques<br /><ul><li>Scanning – identify early signals of changes and trends.
  33. 33. Monitoring – follow key indicators that affect the organization.
  34. 34. Forecasting – after monitoring, project the impact on the organization.
  35. 35. Assessing – describe the impact of the monitored trend on the organization, make a judgment of the probability of outcomes.</li></ul>9<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  36. 36. Forecasting Methods<br /><ul><li>Trend Analysis – a quantitative approach to forecast future personnel needs based on extrapolating information from historical changes.
  37. 37. Delphi Technique –forecasts and judgments of a group of experts are solicited and summarized to determine the future of employment.
  38. 38. Impact Analysis –trends are analyzed by a panel of experts who then predict the probability of future events.
  39. 39. Scenario Planning –creating future scenarios that differ radically from those created by extrapolation of present trends</li></ul>10<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  40. 40. Environmental Factors<br /><ul><li>Economic climate –the economy affects HR management
  41. 41. Globalization – affects sovereignty, prosperity, jobs, wages, and social legislation
  42. 42. Political and legislative factors – influence organizations with changes to laws and regulations
  43. 43. Technological factors –new issues include online HR functions, identity theft, e-learning, answering email on vacations
  44. 44. Demographic factors –include age, gender, family status, education, economic status, labour market
  45. 45. Social and cultural factors</li></ul>11<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  46. 46. Exercise<br /><ul><li>What key environmental factors affect your organization’s ability to achieve its goals?
  47. 47. What are the HR implications?</li></ul>12<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  48. 48. Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />The HR Forecasting Process<br />13<br />
  49. 49. Learning Topics<br /><ul><li>Categories of HR forecasting activity and their relationship to the HR planning process
  50. 50. Rationale for attention to specialist, technical, and executive personnel groups in the HR forecasting process
  51. 51. Impact of environmental and organizational variables on the accuracy and time period of estimates derived from future estimates of HR demand and supply
  52. 52. Various stages in the process of determining net HR requirements</li></ul>14<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  53. 53. Forecasting Activity Categories<br />15<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  54. 54. Human Resources Supply and Demand<br />16<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  55. 55. Key Personnel Analyses<br />17<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  56. 56. Designated Group<br />Receive the most discrimination within organizations<br />18<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  57. 57. 5 Stages of the Forecasting Process<br />19<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  58. 58. Organizational Factors<br /><ul><li>Corporate mission, strategic goals
  59. 59. Operational goals, production budgets
  60. 60. HR policies
  61. 61. Organizational structure, restructuring
  62. 62. Worker KSAs, competencies, expectations
  63. 63. HRMS level of development
  64. 64. Organizational culture, climate, job satisfaction, communications
  65. 65. Job analysis</li></ul>20<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  66. 66. Environmental Factors<br /><ul><li>Economic situation
  67. 67. Labour markets and unions
  68. 68. Government laws and regulations
  69. 69. Industry and product life cycles
  70. 70. Technological changes
  71. 71. Competitor labour usage
  72. 72. Global market for skilled labour
  73. 73. Demographic changes</li></ul>21<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  74. 74. Time Horizons<br />Medium-run<br />– 2 - 5 years<br />Long-run<br />– 5 or more years<br />Current <br />– up to 1 year<br />Short-run <br />– 1 - 2 years<br />22<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  75. 75. Ascertain HR Supply<br />23<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  76. 76. Determine NET HR Requirements<br />External supply requirements =<br />replacement + change supply components<br />Change supply =<br />hiring to increase (or decrease) the overall staffing level<br />Replacement supply =<br />hiring to replace all normal losses<br />External supply =<br />current workforce # x (replacement % per year + change % per year)<br />24<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  77. 77. Example<br />External supply = current workforce x (replacement % per yr + change % per yr)<br />Surplus =<br />1000 x (4 % per year (0.04) + 2 % per year (0.02)<br /> 40 + 20 = 60<br /> Need for 60 employees<br />Deficit = <br />1000 x (4% per year (0.04) + -7% per year (-0.03)<br /> 40 + -70 = -30<br /> Need to reduce by 30 employees<br />25<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  78. 78. Your Turn<br />External supply = current workforce x (replacement % per yr + change % per yr)<br />Surplus =<br />10,000 x (3.5 % per year (0.035) + 3 % per year (0.03)<br /> + = <br /> Need to hire employees<br />Deficit = <br />10,000 x (6% per year (0.06) + -8% per year (-0.08)<br /> + = <br /> Need to reduce by employees<br />26<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  79. 79. HR Surplus/Deficit<br /><ul><li>Internal workforce supply exceeds the organization’s requirement or demand for personnel
  80. 80. Demand exceeds the current resources available in the organization's workforce</li></ul>27<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  81. 81. Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />HR Demand<br />28<br />
  82. 82. Learning Topics<br /><ul><li>Demand forecasting
  83. 83. Linkages between labour demand forecasting and the supply
  84. 84. Various demand forecasting techniques</li></ul>29<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  85. 85. HR Demand<br />Projected human resources requirement<br />30<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  86. 86. Trend Analysis<br /><ul><li>Historical relationship between a business index (e.g., sales, contracts, units sold etc.) and the number of employees required to achieve that index (labour demand)</li></ul>31<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  87. 87. Effective Trend Analysis<br />Five steps to conducting an effective index/trend analysis:<br />Select the appropriate business index<br />Track the index over time<br />Track the total number of employees over time<br />Calculate the average ratio of the business index to the total number of employees<br />E.g. employee requirement ratio - the relationship between the business index and the demand for labour<br />Calculate the Forecasted Demand for Labour<br />32<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  88. 88. Employee Requirement Ratio<br />Current Year<br />33<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  89. 89. Steps for Delphi Technique<br />Sequential surveys with feedback on opinions in previous rounds<br />34<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  90. 90. Steps for the Nominal Group Technique<br />Long-run forecasting technique utilizing expert assessments<br />35<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  91. 91. HR Budgets<br /><ul><li>Quantitative, operational or short-run demand estimates that contain the number and types of personnel required by the organization as a whole and for each subunit, division, or department</li></ul>36<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  92. 92. HR Budgets: Staffing Table<br />37<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  93. 93. Scenario Forecasts<br />Projections of future demand for human resources based on differing assumptions about future events.<br />Optimistic<br />Sales<br />Normal<br />Pessimistic<br />Now<br />T + 2 Years<br />T + 1 Year<br />T + 3 Years<br />Time<br />38<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  94. 94. Regression Analysis<br /><ul><li>Presupposes a linear relationship between independent (casual) variables and dependent (target) variable, e.g., HR demand
  95. 95. Linearity is the relationship between the independent and dependent variables</li></ul>39<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  96. 96. Regression Analysis<br />Y = dependent variable (HR demand)<br />A = constant (Y intercept)<br />B = slope of linear relationship between X and Y<br />X = independent variable (e.g. level of sales)<br />B<br />Y – Dependent Variable<br />A<br />X – Independent Variable<br />40<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  97. 97. Regression Prediction<br />Y = A + BX<br />Y = dependent variable (HR demand)<br />A = constant (Y intercept)<br />B = slope of linear relationship between X and Y<br />X = independent variable (e.g. level of sales)<br />Where<br />41<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  98. 98. ExerciseData<br />X<br />Sales<br />($ Millions)<br />2.0<br />3.5<br />4.5<br />6.0<br />7.0<br />Y<br /># of Marketing Personnel<br />20<br />32<br />42<br />55<br />66<br />5 Sets of observations<br />42<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  99. 99. Exercise Step 1Calculate XY, X2, average X and average Y<br />X<br />Sales<br />($ Millions)<br />2.0<br />2.5<br />3.5<br />5.0<br />6.5<br />19.5<br />Y<br /># of <br />Employees<br />25<br />28<br />30<br />38<br />54<br />175<br />XY<br />50<br />70<br />105<br />190<br />351<br />766<br />X2<br />4.00<br />6.25<br />12.25<br />25.00<br />42.25<br />89.75<br />Average X = 19.5/5 = 3.9 Average Y = 175/5 = 35<br />N = 5<br />43<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  100. 100. Exercise Step 2Calculate the value of B (slope of the linear relationship between X and Y)<br />XY<br />50<br />70<br />105<br />190<br />351<br />766<br />X2<br />4.00<br />6.25<br />12.25<br />25.00<br />42.25<br />89.75<br />Average X = 3.9<br />N = 5<br />Average Y = 35<br />44<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  101. 101. Exercise Step 3Calculate A (constant or intercept)<br />Average X = 3.9<br />Average Y = 35<br />B = 6.09<br />IF<br />Y = A + BX<br />Then<br />AND<br />A = 35 – (6.09)(3.9)<br />A = 11.23<br />45<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  102. 102. Exercise Step 4Determine the regression prediction equation<br />Y = A + BX<br />Whew! So what?<br />Independent causal variable X<br />(e.g., sales) AND <br />Dependent variable Y<br />(e.g., predicted # of personnel)<br />Even if sales are zero the value for A is 11.23 (round to 11.0) or 11 persons. <br />For every increase unit ($1 Million) sales (X) there is a predicted increase of 6.09 staff (Y) associated with that change.<br />A = 11.23<br />B = 6.09<br />X = Dependent Variable<br />Y = 11.23 + (6.09)(X)<br />46<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  103. 103. Exercise Step 5Calculate predicted HR demand (Y) by inserting values for X<br />Predict the HR demand for personnel at $8 million and $10 million.<br />Y = A + BX<br />Y = A + BX<br />Y = A + BX<br />$10 million<br />$8 million<br />A = 11.23<br />A = 11.23<br />A = 11.23<br />B = 6.09<br />B = 6.09<br />B = 6.09<br />X = Sales ($M)<br />X = 8<br />X = 10<br />Y= 11.23 + (6.09)(X)<br />Y = 11.23 + (6.09)(8)<br />Y = 59.99<br />60 Staff required<br />Y = 11.23 + (6.09)(10)<br />Y = 72.18<br />72/73 Staff required<br />47<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  104. 104. Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />Ascertaining HR Supply<br />48<br />
  105. 105. Learning Topics<br /><ul><li>Relationship between demand / supply forecasting
  106. 106. Relationship between forecasting and replacement management
  107. 107. Methods of determining external and internal supply of employees such as:
  108. 108. Skills and management inventories,
  109. 109. Replacement analysis,
  110. 110. Markov models,
  111. 111. Linear programming,
  112. 112. Movement analysis,
  113. 113. Vacancy/renewal</li></ul>49<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  114. 114. Human Resources Supply<br /><ul><li>Source of workers to meet demand acquired internally or externally.</li></ul>50<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  115. 115. Skills Inventory<br /><ul><li>Record held on employee except management or professionals</li></ul>Personal information<br />Education, training and skill competencies, licensing etc.<br />Work history<br />Performance appraisals<br />Career information<br />Hobbies, interests, volunteerism, community involvement<br />51<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  116. 116. Management Inventory<br /><ul><li>Record for managerial, professional, or technical personnel that includes all elements in the skills inventory with the addition of information on specialized duties, responsibilities, and accountabilities.</li></ul>History of management or professional jobs held<br />A record of management or professional training courses<br />Key accountabilities for the current job<br />Assessment centre and appraisal data<br />Professional and industry association memberships<br />52<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  117. 117. Replacement Management <br /><ul><li>Process of ensuring that pools of skilled employees are trained and available to meet the strategic objectives of the organization
  118. 118. Process of finding employee for key managerial positions</li></ul>Long-term succession<br />Training and work experience to enable individuals to assume higher-level job appointments in the future<br />Short-term emergency replacement<br />Individuals who have quit, been terminated due to performance problems, have died, and so on<br />53<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  119. 119. Replacement Analysis<br />Improve effectively filling vacancies<br />Performance<br />1Outstanding<br />2Above average<br />3Average/good<br />4Below Average<br />5 Unacceptable<br />Readiness<br />AReady now<br />BReady in 1 year<br />CReady in 2 years<br />DNot suitable for this job<br />54<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  120. 120. Ripple Effects<br /><ul><li>Caused when one promotion or transfer in the organization causes several other movements as a series of people are promoted to fill the openings</li></ul>55<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  121. 121. Markov Model<br /><ul><li>Produces a series of matrices that detail the various patterns of movement to and from the various jobs in the organization
  122. 122. Determines the likelihood that an individual will display movement behaviours</li></ul>56<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  123. 123. Sample Markov Matrix*<br />*Adapted from Strategic Human Resources Planning, Belcourt and McBey, Nelson, 2010.<br />57<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  124. 124. Markov Analysis Conclusions<br /><ul><li>Number of people who move between job levels annually
  125. 125. Number of external hires needed
  126. 126. Movement patterns and expected duration in specified jobs associated with patterns of career progression
  127. 127. Number and percentage of starters at a particular job who target a future job within a specified time</li></ul>58<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  128. 128. Linear Programming<br /><ul><li>Mathematical procedure used for project analysis in engineering and business applications
  129. 129. Determine the optimal supply mix to minimize costs or other constraints.</li></ul>59<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  130. 130. Movement Patterns<br />Remain in current job<br />Promotion to higher job classification <br />Lateral move<br />Exit from a job (e.g., termination, layoff, voluntary exit)<br />Demotion<br />60<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  131. 131. Movement Analysis<br /><ul><li>Analyze people supply and the ripple effect that promotions or job losses have on the movements of others in the organization</li></ul>61<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  132. 132. Exercise*<br /><ul><li>5% increase for levels 6-9
  133. 133. 1 additional level 4
  134. 134. 6 additional level 5
  135. 135. Historical annual loss rates</li></ul>Retirements<br /><ul><li>2 positions level 5
  136. 136. 15% levels 6-9</li></ul>Turnover<br /><ul><li>10% levels 5 and 6
  137. 137. 15% level 7
  138. 138. 20% level 8
  139. 139. 25% level 9
  140. 140. Positions are start of year
  141. 141. 1 – level 4
  142. 142. 6 – level 5
  143. 143. 20 – level 6
  144. 144. 32 – level 7
  145. 145. 40 – level 8
  146. 146. 50 – level 9</li></ul>*Adapted from Strategic Human Resources Planning, Belcourt and McBey, Nelson, 2010.<br />62<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  147. 147. Exercise<br />Start at the top with the most senior positions since most movement in organizations is up due to promotions and replacements.<br />63<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  148. 148. Exercise<br />Movement analysis has identified this year’s need to fill 68 vacancies.<br />167 moves will be required because of promotion from within.<br />64<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  149. 149. Vacancy Model<br /><ul><li>Analyzes people flow throughout the organization at each functional or compensation level</li></ul>Use the following information to calculate next year’s supply forecast.<br />HR loss during the year<br />Level 88 (president = 100%<br />Level 87 (vice presidents) = 15%<br />Level 86 (directors) = 17%<br />Level 85 (managers) = 20%<br />Level 84 (senior analysts) = 25%<br />Level 83 (analysts) = 50%<br />Replacement Policy (% external / % internal)<br /> % external % internal<br />Level 88 0 100<br />Level 87 10 90<br />Level 86 20 80<br />Level 85 30 70<br />Level 84 55 45<br />Level 83 100 0<br />65<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  150. 150. Exercise*<br />Start at the top and work your way down<br />*Adapted from Strategic Human Resources Planning, Belcourt and McBey, Nelson, 2010.<br />66<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  151. 151. Supply and Retention Programs<br /><ul><li>Monitor and control absenteeism and turnover
  152. 152. Retention programs are vital to keeping experienced, high-performers</li></ul>67<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  153. 153. Costs of Replacing Employees<br />Hard Costs<br /><ul><li>Advertisements
  154. 154. Headhunter, recruiting fees
  155. 155. Interview training
  156. 156. Travel costs
  157. 157. Admin expenses
  158. 158. Costs of lost production
  159. 159. Bonuses
  160. 160. Increased salaries
  161. 161. Cost to replace a fully proficient employee - 70-200% annual salary</li></ul>Soft Costs<br /><ul><li>Lost business and customer contacts
  162. 162. Decreased productivity due to training and learning curve gaps
  163. 163. Orientation and training time
  164. 164. Decline in team morale and productivity
  165. 165. Increased turnover due to the “follow-me” effect</li></ul>68<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  166. 166. Retention Programs<br /><ul><li>Offering effective communication programs
  167. 167. Facilitating an enjoyable and collegial work atmosphere
  168. 168. Designing meaningful jobs
  169. 169. Formulating and administering performance and compensation systems that reward better performers
  170. 170. Offering more flexible and attractive work arrangements) -- flextime, telecommuting, cafeteria-style benefits plans
  171. 171. Mentoring and developing intellectual capital</li></ul>69<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  172. 172. Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />Succession Management<br />70<br />
  173. 173. Learning Topics<br /><ul><li>Evolution of succession management
  174. 174. Steps in the succession management process
  175. 175. Compare job and competency approaches
  176. 176. Identifying high potential talent
  177. 177. Management development methods
  178. 178. Measuring success of management succession
  179. 179. Limitation of succession management</li></ul>71<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  180. 180. Importance of Succession Management<br /><ul><li>Process of ensuring that a pool of skilled employees ready to achieve the strategic objectives of the organization</li></ul>72<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  181. 181. Evolution of Succession Management<br /><ul><li>Process of finding replacement employees for key managerial positions
  182. 182. Replacement planning has evolved into succession management by:
  183. 183. Broadening the focus
  184. 184. Expanding the time horizon
  185. 185. Creating a talent pool
  186. 186. Improving the evaluation system</li></ul>73<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  187. 187. Reasons for Succession Management<br />Provide opportunities for high-potentials<br />Identify replacement needs<br />Increase the talent pool of promotable employees<br />Contribute to implementing strategic business plans<br />Help individuals realize their career plans<br />Tap the potential for intellectual capital<br />Encourage the advancement of diverse groups<br />Cope with the effects of voluntary separation programs<br />Decide which workers can be terminated<br />Cope with the effects of downsizing<br />Reduce headcount to essential strategically important jobs only<br />74<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  188. 188. Succession Management Process<br />75<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  189. 189. Step 1Align Succession Plans with Strategy<br /><ul><li>Organizations must start with the business plan
  190. 190. Using environmental scanning, managers try to predict where the organization will be in three to five to ten years</li></ul>76<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  191. 191. Step 2Identify the Skills and Competencies<br />Job-Based Approach<br />Competency-Based Approach<br />77<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  192. 192. Job and Competency Approaches<br />Job Based Approach –<br /><ul><li>Focus on duties, skills, job experience, and responsibilities required to perform the job
  193. 193. Not adequate since jobs change rapidly</li></ul>Competency-Based Approach<br /><ul><li>Focus on measurable attributes
  194. 194. Differentiate successful employees from non successful
  195. 195. Hard and soft skills
  196. 196. Produce more flexible individuals </li></ul>78<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  197. 197. Types of Competencies<br />Core competencies<br />Role or specific competencies<br />Unique or distinctive competencies<br />79<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  198. 198. Step 3Identify High-Potential Employees<br />Several approaches to identify managerial talent, including:<br /><ul><li>Temporary replacements
  199. 199. Replacement charts
  200. 200. Strategic replacement
  201. 201. Talent management culture</li></ul>80<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  202. 202. Management Development Methods<br /><ul><li>Promotions
  203. 203. Job Rotations
  204. 204. Special Assignments
  205. 205. Formal Training and Development
  206. 206. Mentoring and Coaching</li></ul>81<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  207. 207. Leadership Development Activities*<br />* From Strategic Human Resource Planning, Belcourt and McBey, Nelson, 2010.<br />82<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  208. 208. Management Development Methods<br /><ul><li>Promotions
  209. 209. Job Rotations
  210. 210. Special Assignments
  211. 211. Formal Training and Development
  212. 212. Mentoring and Coaching</li></ul>83<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  213. 213. Step 5Monitor Succession Management<br /><ul><li>Corporations with strong succession management programs are higher performers in revenue growth, profitability and market share
  214. 214. HR metrics can be used to help monitor succession management</li></ul>84<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  215. 215. Succession Management Metrics <br /><ul><li>Increase engagement scores
  216. 216. Increase positive perceptions of development opportunities
  217. 217. High potentials’ perceptions of the succession management process
  218. 218. Higher participation in developmental activities
  219. 219. Greater number involved in the mentoring process</li></ul>85<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  220. 220. HR Metrics – Lag Measures<br /><ul><li>Increased ave # of candidates
  221. 221. Reduced ave # of positions with no identified successors
  222. 222. Increased % of managers with replacement plans
  223. 223. Increased % of key positions filled according to plans
  224. 224. Increased ratio of internal to external hires
  225. 225. Increased retention rates of key talent
  226. 226. Increased % of positive job evaluations
  227. 227. Increased # of manager as talent developers</li></ul>86<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
  228. 228. Contact Information<br />Wayne Rawcliffe<br />Senga Consulting Inc.<br />604.909.3840<br />205, 1275 West 6th Avenue<br />Vancouver, BC V6H 1A6<br />wayne@senga.ca<br />www.senga.ca<br />87<br />Senga Consulting Inc. Copyright © 2009 | All Rights Reserved<br />
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