Chapter 5: Forecasting & Planning Flashcards

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Questions and Answers

What is workforce planning?

The process of predicting an organization's future employment needs and the availability of current employees and external hires to meet those needs.

Which of the following are steps in the workforce planning process? (Select all that apply)

Monitor, evaluate, and revise forecasts (correct)

Develop and implement action plans (correct)

Identify the business strategy (correct)

Conduct a business market analysis

What is forecasting?

Constructing estimates as a range, providing low, probable, and high estimates based on uncertainties.

What affects an organization's need for labor?

The organization's product demand. Signup and view all the answers

What is an example of forecasting labor demand?

Identifying minimal and optimal staffing levels necessary to achieve specific revenue goals. Signup and view all the answers

What does ratio analysis assume?

There is a relatively fixed ratio between the number of employees needed and certain business metrics. Signup and view all the answers

What is trend analysis used for?

Predicting future labor needs based on past employment patterns. Signup and view all the answers

What is judgmental forecasting?

Using the experience and insights of people in the organization to predict future staffing needs. Signup and view all the answers

What does return on investment analysis estimate?

The return on investment from adding a new position based on costs and outcomes. Signup and view all the answers

How do organizations monitor the external labor market?

Through their own observations and by monitoring labor market statistics generated by others. Signup and view all the answers

What are action plans for resolving labor supply/demand gaps?

Plans that proactively address anticipated surpluses or shortages of employees. Signup and view all the answers

What is a temporary talent shortage?

A situation where hiring incentives may be necessary due to a short-term talent scarcity. Signup and view all the answers

What defines a persistent talent shortage?

A prolonged scarcity of workers that requires organizations to reduce their demand or increase the supply of needed talents. Signup and view all the answers

What are leading indicators of ethical issues in staffing?

Conflicting goals, lack of a code of ethics, and no ethics training. Signup and view all the answers

What do talent inventories summarize?

Each employee's skills, competencies, and qualifications. Signup and view all the answers

What is demand forecasting?

Predicting how busy an organization will be in the future and determining the number of employees needed. Signup and view all the answers

What are the two types of recruiting mentioned?

Continuous recruiting Signup and view all the answers

Study Notes

Workforce Planning

Essential for aligning talent availability with business strategy goals.
Involves predicting future employment needs and assessing current employee capabilities and external hiring options.
Addresses future challenges in acquiring the right talent promptly.

Workforce Planning Process

Identify the business strategy and articulate talent philosophy.
Conduct workforce analysis to spot labor shortages and surpluses.
Develop action plans to address gaps; these plans can vary in length and focus.
Monitor and revise forecasts and action plans based on environmental changes.

Forecasting

Involves estimating future needs with a range of low to high projections.
Adjust estimates as internal and external situations evolve.

Forecasting Business Activity

Directly ties product demand to labor needs; requires high-quality information sources.
Types of forecasts include seasonal, interest rates, currency exchange, competitors, industry trends, and legal factors.

Forecasting Labor Demand

Identifying both minimal and optimal staffing levels is crucial.
Labor demand is influenced by business strategy, sales goals, restructuring, and talent acquisition needs.

Ratio Analysis

Establishes a fixed ratio between employee numbers and business metrics using historical data.
Useful for justifying new hires or indicating the need for layoffs.

Possible Ratios

Common ratios include production per employee, revenue per employee, managers per employee, and labor costs relative to production costs.

Trend Analysis

Utilizes historical employment patterns to predict future staffing needs.
May not be solely relied upon due to external factors influencing staffing changes.

Judgmental Forecasting

Combines insights from managers (top-down and bottom-up approaches) to estimate future staffing needs.
Top-down estimates focus on leadership experience, while bottom-up incorporates managerial input.

Role of Judgment

Balances mechanical forecasting methods with managerial insights for accurate predictions.

Return on Investment Analysis

Evaluates financial returns on new hires by comparing expected benefits against hiring costs.
Considers revenue generation, efficiency savings, and overall productivity impacts.

Forecasting Labor Supply

Estimates future labor supply by analyzing current staffing levels alongside anticipated changes.
Distinguishes between internal and external labor markets.

Internal Labor Market Forecasting

Assesses the competency levels of employees expected to remain in the company by considering anticipated losses and gains.

Transition Analysis

An analytical technique to evaluate internal labor markets and forecast future employment distributions within the organization.

Monitoring External Labor Market

Organizations assess applicant quality and quantity through observations and statistics from external sources like the Bureau of Labor Statistics.

Resolving Labor Supply/Demand Gaps

Action plans proactively address labor surpluses or shortages, recognizing whether issues are temporary or indicative of a trend.

Temporary Talent Shortage

Organizations may offer temporary incentives or adopt costly recruitment methods to attract talent during shortages.

Persistent Talent Shortage

Long-term shortages necessitate strategies like reducing demand through automation or increasing talent supply, though this can be complex.

Temporary Employee Surplus

In cyclical slowdowns, contingent workers provide flexibility without the long-term costs of layoffs.

Permanent Employee Surplus

Early retirement, layoffs, and hiring freezes are strategies to manage excess headcount while considering morale and operational efficacy.

Staffing Planning Questions

Key considerations include recruitment numbers, resource needs, and hiring timelines (continuous vs. batch recruiting).

Cost Per Hire

External costs include fees, bonuses, and advertising, while internal costs often concern relocation and training.

Leading Indicators of Ethical Issues

Issues arise from conflicting goals, lack of ethics training, and unpunished unethical behavior.

Analytics in Staffing

Analytics plays a crucial role in evaluating talent situations and forecasting future needs.

Technology in Demand Forecasting

Advances in technology enhance forecasting accuracy and speed, utilizing tools like spreadsheets and cloud applications.

Scatter Plots

Visual tools to represent relationships between two variables, such as revenue and staffing levels.

Talent Inventories

Comprehensive records summarizing employee skills, competencies, and qualifications.

Staffing and Hiring Yields

Staffing yields measure applicant progression through hiring stages, while hiring yields assess the final selection percentage.

Continuous and Batch Recruiting

Continuous recruiting involves ongoing candidate sourcing, whereas batch recruiting pools applicants for multiple openings simultaneously.

Attrition and Retention

Attrition denotes natural employee turnover, while retention focuses on maintaining workforce stability.

Contingent Workers

Non-permanent employees who typically do not expect full-time roles include temporary workers and independent contractors.

Interest Rate Forecasts

Affect organizational planning; rising rates typically indicate decreased product demand and labor needs, while falling rates suggest opposite trends.

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Description

Test your knowledge on workforce planning and its impact on business strategy. This quiz explores the essentials of predicting an organization's future employment needs. Understand the processes involved and how they influence business success.