Forecasting Labor Demand PDF

✓ Forecasting is the heart of business planning, and human resources planning MODULE 3 PLANNING AND RECRUITING...

✓ Forecasting is the heart of business planning, and human resources planning MODULE 3 PLANNING AND RECRUITING is no different. Knowing the staffing needs of your small business or organization defines your HR efforts, defining hiring goals for both number of workers and job functions. ✓ Attempts to determine the supply and demand for various types of human resources to predict areas within the organization where there will be future labor shortages or surpluses (e.g. statistical planning models, historical records). Forecasting demand for Labor: There are many methods to be used but we will UNIT 1 WORKFORCE PLANNING only discuss in this module the basic techniques. Workforce Planning - *before hiring A. Statistical Forecasting (Quantitative) “a.k.a manpower planning” Trend analysis – using statistical Getting the right number of people with models to predict labor demand. It looks the right competencies in the right jobs at historical data for one factor of the at the right time” (Sinclair, 2004). business, often sales volume, and applies - FORECASTS OF LABOR DEMAND the staffing level from a previous period - FORECASTS OF LABOR SUPPLY to suggest a forecast level. marami ka pa pwede makuha? Ratio analysis - sets a level of staffing based on a relationship between workers LOOK AT: and a business factor. A sales SURPLUS/ SHORTAGE – “kulang ba?” department that assigns 20 accounts to (happens before hiring; what are your each salesperson would, for instance, requirements) add an additional worker for each 20 new accounts forecast. *surplus means: how to avoid a lot of employees Regression analysis follows similar principles using more sophisticated GOAL SETTING/ STRATEGIC PLANNING statistical calculations. - Consider how many will retire/ possibilities of resignment -------------------------------------------------------------------- Pros and Cons of Statistical Forecasting: (how to avoid or control resignment: CONTRACT) Building forecasts on previous data gives you a solid base for forecasting, whether for sales or PROGRAM IMPLEMENTATION/ productivity. New forecasts have a factual EVALUATION starting point, upon which you can apply - “sakto lang ba nakuha ko?” statistical comparisons and analyses to provide insight into future business. Statistics work best Two Components: over a long term, however, where cyclical 1. Assessment of the human resource capital variations average out and business conditions requirements that takes into account the remain constant. Market conditions and quality(capabilities) and quantity (headcount) industry trends can't be predicted of a workforce. mathematically, nor will statistical patterns remain identical from year to year. 2. Forecasting translates organization needs to specific numbers and types of talent needed in ----------------------------------------------------------------- an organization in consideration of fact-based B. Judgmental Forecasting or Subjective history and business objectives. Judgments (Qualitative) - Judgment  forecasting in a small business often resources. These matrices simply show as comes down to the experience of the probabilities the average rate of historical owner. Your expertise is crucial to all movement from one job to another. aspects of your business, and so your Goal setting and strategic planning estimates of staff levels are based on your knowledge. As business grows, you The purpose of setting specific quantitative may recognize general rules of thumb goals is to focus attention on the problem and that others in your company can apply. provide a benchmark for determining the When business warrants, group input relative success of any programs aimed at may become valuable to balance redressing a pending labor shortage or surplus. needs from several perspectives. Reducing Labor Surplus 1. Downsizing - the planned elimination of large numbers of personnel designed to Pros and Cons of Judgmental enhance organizational effectiveness. Forecasting Reasons for downsizing: Judgmental forecasting relies on human a. To reduce costs. experience to predict future business needs. b. Outdated plants or introduction of technological advancement. This may be input from sales managers to identify business growth or from production c. Economic reasons. managers predicting worker needs. 2. Early Retirement Program Dependent on human input, judgmental Older workers are sometimes more costly than forecasting can be both highly accurate and younger workers because of higher seniority, wildly off-base, depending on the bias of those higher medical costs, and higher pension giving input. contributions. However, human judgment matches the 3.Buyouts - There are some companies simply flexibility needed for short-term analysis, as well converted early retirement programs into as the intuitive factors that industries in rapid buyouts for specific workers that have nothing change require. to do with age C. Combining Techniques Reducing Labor Shortage In practice, forecasting your HR needs 1. Employing Temporary Workers incorporates elements of both strategies. When you base data on a previous period and apply It affords firms the flexibility needed to estimates for future performance, you work operate efficiently in the face of wings in both statistically and judgmentally. A seasonal the demands for goods and services. business may, for instance, suffer in one year due to a spell of bad weather, and the 2. Outsourcing manager may adjust staffing, accounting for a return to normal weather. Likewise, applying the It is a logical choice when a firm simply opinions of sales staff to statistical results may does not have certain expertise and is account for changes in demand from human not willing to invest time an effort into factors. developing it. In the final analysis, the primary source of labor information comes from prices – the wage rate 3. Offshoring set in the market, the prices of goods and services, and the cost of alternatives to manual A special case of outsourcing where the labor. In this sense, it is the consumer who jobs that move actually leave one controls labor and not the employer. It is up to country and go to another. producers to predict and deploy demanded UNIT 2 RECRUITMENT labor in a profitable way. Recruitment Sample Transition Matrix Attracting people with the right qualifications (as determined in the job analysis) to apply for A transition matrix, or Markov matrix, can be the job. used to model the internal flow of human  The practice or activity carried on by the The most common method. organization with the primary purpose of Many organizations use newspaper ads identifying and attracting potential employees. especially for local positions. Its aim is to ensure that the organization has a In 2002, recruiters rated newspaper number of reasonably qualified applicants to advertising as one of the most effective choose from when vacancy occurs. avenues of applicant recruitment (Gere, Scarborough, & Collison, 2002). Steps: But in 2007, recruiters considered print 1. Job analysis advertising as one of the least effective 2. Selection of testing methods recruitment methods (SHRM, 2007). 3. Test validation 4. Recruitment 2. Electronic Media 5. Screening The use television and radio to advertise 6. Testing job openings. 7. Selecting 8. Hiring/reject 3. Situation-Wanted Ads Situation-wanted ads are placed by the applicant rather than by organizations. 4. Point-of-Purchase Methods Job vacancy notices are posted in places where customers or current employees are likely to see them: store windows, bulletin boards, restaurant placemats, and inside jitney (jeepney) ------------------------------------------------------ Recruiters 1. Campus Recruiters – organizations send recruiters to college and university campuses to answer questions about themselves and interview students for available positions. Making Decisions in Recruitment: Virtual Job Fairs – students and alumni To promote someone within the organization can use the Web to “visit” with recruiters (internal recruitment) from hundreds of organizations at one time. To hire someone outside the organization (external recruitment) e.g. newspaper ads, e- 2. Outside Recruiters media, situation-wanted ads, campus – using outside recruiting sources as recruitment, employment agencies, executive private employment agencies, public search firms, referrals, public employment employment agencies, and executive agencies, job fairs. search firms. To enhance employee morale and Employment Agencies and Search Firms motivation, it is often good to give current employees an advantage in 1. Employment Agencies obtaining new internal positions. Charging either the company or the However, if an organization always applicant when the applicant takes the promotes employees from within, it runs job. the risk of having a stale workforce that is devoid of the many ideas that new 2. Executive Search Firms or Head Hunters employees bring with them from their The jobs they represent tend to be previous employment settings. higher-paying, non-entry level positions such as executives, engineers, and Heavy reliance on internal sources is computer programmers. thought to perpetuate the racial, gender, and age composition of the Reputable executive search firms always workforce Thus, a balance between charge their fees to organizations rather promoting current employees and hiring than to applicants they place. outside applicants is needed. Note on pressure on applicants vs Media Advertisements business side 1. Newspaper Ads 3. Public Employment Agencies  Designed primarily to help the Check also passive applicant’s social unemployed find work, but they often networking sites then determine if they offer services such as career advisement might want to apply. and resume preparation. 1. Remote interviewing 4. Employee Referrals With remote interviewing, job interviews Current employees recommend family taking place on video conferencing platforms members and friends for specific job such as Zoom, Microsoft Teams or Cisco Webex, openings. or specialized video interviewing tools, such as HireVue and Montage. The technology also 5. Direct Mail facilitates collaborative hiring by making it Employer typically obtains a mailing list easier for other departments to participate in and sends wanted letters or brochures the interview and selection process. ton people through mail. Although remote interviewing has Useful for positions involving specialized become a prominent trend, it isn’t without its skills. challenges. Presenting oneself in a professional manner can be difficult if it isn’t possible to 6. Internet interview from a tidy or professional location, A. Employer-Based Websites while the presence of children or pets at home – organization lists available job openings can create a noisy and distracting environment and provides information about itself for both interviewer and interviewee. and the minimum requirements needed to apply to a particular job. Unforeseen technical challenges -- even those that are out of a candidate’s control -- B. Internet Recruiters can cause candidates to become flustered – a private company whose website lists and embarrassed, which ultimately can lead to job openings for hundreds of recruiters being put off a candidate. Luckily, organizations and resumes for thousands many of the videoconferencing technologies of applicants. have introduced custom and blurred background options and their reliability has 7. Job Fairs improved. Designed to provide information in a personal fashion to as many applicants 2. Candidate experience as possible. Organizations that focus on building a positive experience and company culture for 8. Incentives employees are found to be more successful Happens when unemployment rates are and profitable. The same effects apply to the low, organizations take extra measures to candidate experience. Upgrading career sites recruit employees by offering incentives and using surveys to get feedback from for employees to accept jobs. candidates are two ways employers have improved their candidate experiences. Usually incentives come in the form of financial signing bonus, discounts on Candidates want career sites that are company products and services. easy to use and can help them quickly and easily set up a profile, search for jobs and apply. 9. Non-traditional Populations If these processes are not straightforward, job Potential applicants from non-traditional hunters will navigate to career sites that have populations. been optimized in these ways. Candidates are also unlikely to recommend career sites they Welfare recipients, church members, find to be awkward, slow and complicated. PWD’s, Ex-convicts. 10. Recruiting “Passive” Applicants How companies communicate with candidates, organize and conduct interviews Build relationships with professional and execute follow-up processes shows associations and recruiters attend their candidates how professional an organization is conferences, read their newsletters, and and whether they would want to work there. scan their websites to identify cream of The overall experience is crucial to not only the crop then convince these people to attracting the best talent available but winning apply for the job. over that talent from your competitors and building a strong employer brand. 3. Diversity and inclusion tasks, helping recruiters review a large number Diversity and inclusion is another area of of job boards, process documents and read growing focus for HR leaders that directly and process data from those sources. affects talent acquisition and recruitment. Statistics show that businesses with a diverse Recruitment chatbots can help engage workforce and inclusive workplace have better candidates and provide details about jobs productivity and profitability. Many while they search organizations are looking to boost the diversity of their workforces and recruiters are 8. Skills and competencies responsible for identifying and including a wider Although skills and competencies have diversity of candidates in the talent pool. been used in talent management for quite some time, particularly for identifying and 4. Contingent workers matching successors to key positions or Over the past few years, there has been identifying career paths, they haven’t always an upward trend in using contingent workers been used effectively in talent acquisition. and creating a hiring process expressly for them. Talent acquisition is different for contingent Particular skills and competencies can workers than it is for full-time employees, and be critical for hiring the right employees. Having organizations need to be set up to seek out, the right software to help you match the right recruit and process these types of hires. candidates to the right jobs based on a set of skills and competencies will increase the A vendor management system can be a success of your recruiting process. useful tool for managing procurement of contingent workers, but organizations should Evaluating the Effectiveness of Recruitment also be prepared to use their career site and Strategies social media marketing to appeal to contingent workers and set up different 1. One method to determine which interview methods and vendor approval recruitment source is the most processes. appropriate to use for the company is to examine the number of applicants each recruitment source yields. 2. A second method for evaluating the 5. Analytics success of a recruitment campaign is to The use of analytics across talent consider the cost per applicant, which is acquisition processes helps deliver data-driven determined by dividing the number of decision-making and insights to identify areas of applicants by the amount spent for each strength and weakness, as well as reduce the strategy. cost of talent acquisition practices, identify problems and blockages in the process, and fill 3. Consider the cost per qualified vacant roles more quickly. Additionally, talent applicant. analytics can prove the effectiveness and ROI of your recruiting software investments. Recruitment-Source Effectiveness Internal vs. External Recruitment: 6. Robotic process automation Employees recruited through internal Robotic process automation (RPA) is an sources (e.g., referrals) tend to have increasingly popular technology that can higher tenure and better performance automate manual, repetitive activities. RPA compared to those recruited externally. bots are capable of performing a vast array of recruiting tasks that normally take several hours. Theories: RPA performs operations on a bulk scale that doesn’t require any level of human intervention. o Accurate Information: Rehires or referrals receive more accurate 7. Artificial intelligence job information. These range from smart talent platforms, o Applicant Type: Different sources such as Eightfold AI, to job-posting platforms, attract different types of chatbots and natural language processing applicants. (NLP). AI is also used to minimize bias in o Interpersonal Attraction: Referrals candidate identification, selection and hiring. lead to greater tenure due to similarity-based attraction. AI can perform intelligent activities, such as reviewing resumes for specific skills, Realistic Job Previews (RJP) characteristics or keywords. Combined with RPA, AI can add intelligence to high-volume  Purpose: Provides an honest assessment Purpose: Reviews applicant information of the job to help applicants understand (resumes, applications, tests) to select the role. candidates. Effectiveness: Reduces turnover, Evaluation of Written Materials: Provides increases job satisfaction and information on education, work history, performance; oral previews at the job and job performance, though limited by offer stage are more effective than self-selection of sources. written ones or earlier in the process. Employee Testing Expectation-Lowering Procedure (ELP) Purpose: Measures characteristics Goal: Adjusts applicants' expectations predictive of job performance using about job realities to prevent standardized tests. disillusionment. Reliability: Consistency of test results Example: Clarifying that no job is perfect (test-retest, parallel forms, internal and discussing potential job frustrations. consistency). Effective Employee Selection Techniques Validity: Accuracy in measuring what is Validity: Selection methods should be intended (content validity, criterion- valid (content, criterion, construct related validity). validity) and cost-effective. Types: Includes cognitive, mechanical, Legal Considerations: Should minimize motor, job skills, personality, work sample, legal risks, privacy invasion, and adverse and situational judgment tests. impact. Employee Selection Model Validity Generalization and Test Utility Criteria: Measures of job success. Validity Generalization: Test’s ability to predict performance in different settings. Predictors: Variables about applicants related to job success. Test Utility: Economic benefits gained from using screening tests. Correlation Coefficient: Measures the relationship between predictors and Employment Interviews criteria. Structured Interviews: Consistent questions based on job analysis, uniform Content and Criterion Validity scoring. Content Validity: Based on job analysis, matching tasks with required KSAOs. Challenges: Interviews can be biased and have low reliability and validity. Criterion Validity: o Concurrent: Test scores of current Structure Levels: employees compared with their ▪ Slightly structured – one criterion is met performance. ▪ Moderately structured – two criteria are met o Predictive: Test scores of applicants compared with future ▪ Highly structured – all three criteria met job performance. Combining Predictors Multiple Hurdles: Minimum scores Unstructured – none of the criteria are met required on each predictor. (Applicants are not asked the same questions and which there is not standard scoring system to score Compensatory Approach: High scores the applicants.) on some predictors can offset lower Statistical Models scores on others. Multiple Regression: Combines predictors statistically. Employee Screening  Serial-Panel-Group: Combination of the Multiple Cut-off: Minimum scores set for above styles. each predictor. Interview Mediums: Multiple Hurdle: Sequential use of Face-to-Face screening devices. Telephone Videoconference Unstructured Interviews: Written 1. Purpose and Focus: Maintain the interview’s purpose and keep questions Types of Interview Questions: relevant to the candidate's skills. Clarifier: Clarify resume/application details. 2. Minimize Deviations: Avoid straying from the topic; keep conversations minimal. Disqualifier: Determine if an applicant should be disqualified. 3. Interviewer Skill: Interviewers should be Skill-Level Determiner: Assess knowledge experienced and proficient to avoid and skills. stumbling during the interview. Past-Focused (Behavioral): Based on 4. Training: Proper training in conducting past experience (high predictor for high- unstructured interviews is crucial due to level roles). their complexity. Future-Focused (Situational): Hypothetical scenarios to gauge responses. Organizational Fit: Assess compatibility Interview Biases: with company culture. 1. Primacy Effect: Early information weighs more heavily than later information. Scoring Methods: Right/Wrong Approach: Answers are 2. Contrast Effects: An applicant’s judged as correct or incorrect. performance can be judged based on the performance of previous Typical-Answer Approach: Answers are candidates. compared to benchmark responses. 3. Negative Information Bias: Negative Key-Issues Approach: Points given for feedback is often given more weight each relevant part of the answer. than positive feedback. Predicting Performance: 4. Similarity Bias: Candidates similar to the References: Confirm resume details, interviewer in attributes like personality or check for disciplinary issues, and assess background may score higher. future performance. o Problems: Issues include leniency, Interview Styles: limited knowledge of the One-on-One: Single interviewer and applicant, and reliability. single applicant. Applicant Information: Training, Serial: A series of individual interviews. education, job knowledge, abilities, skills, prior experience, and personality. Return: Similar to serial, but with intervals between interviews. Rejecting Applicants: Send personalized, honest rejection Panel: Multiple interviewers questioning letters. one applicant simultaneously. Employee Placement: Group: Multiple applicants interviewed Definition: Assigning new employees to together. positions where they are likely to succeed.  Principles: 1. Match job requirements with qualifications; don’t adjust the job to fit the person. 2. Assign jobs according to the employee’s qualifications. 3. Inform employees about working conditions and job expectations. 4. Foster loyalty and cooperation. 5. Ensure placement is ready before the start date. 6. Be prepared for initial temporary placements and potential future changes. Benefits of Proper Placement: Improves morale, utilizes employee capacity effectively, reduces turnover and absenteeism, and enhances overall performance.