Yesterday, we heard from experts Lucia Erwin and Jack Tootson discuss how supply and demand influence HR. Today, we’ll hear how Erwin and Tootson apply Supply Chain Management concepts like Scarcity and Attrition to human resources.
Tootson, CEO at Global Performance Measurement Systems, Inc., and Erwin, CEO of Talent Strategyzer, Inc., offered their advice during a recent BLR® webcast.
Two Factors We Forget
Programs that function in reaction to requisitions often get tripped up by two factors, says Erwin:
Scarcity. Take cyber engineering, one of the hot roles today, as an example, Erwin says. It’s very tight for organizations needing that skill. To successfully meet demands in this area, you need to partner early; otherwise, there will be an impossible plan that demands nearly immediate hiring of scarce applicants without adequate compensation.
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Attrition. This could be from routine actions like retirement, or it could be losses of key players of any tenure. What’s causing the attrition? You need to know. Job market? New competitor? A side benefit of looking at attrition is that you may identify solvable problems. For example, at one organization, analysis of attrition showed that three leaders accounted for the higher attrition. When those managers were helped with management skills, the problem was eliminated.
One nice fact about lowering attrition—return on investment (ROI) can easily be shown, says Erwin. Also, when you are dealing with a short supply, it may drive the organization to do more retention and more development.
There is always a tendency to think, We can just go out and hire, but sometimes that’s not possible, and hiring managers need to know that, Erwin says.
External Supply (Labor Market)
Tootson offers the following key questions to ask in supply analysis:
|Internal Supply||External Supply||Supply Forecasting|
|What/where are the key talents of the workforce?||What workforce composition changes will impact availability of talent?||Can the organization attract individuals required with key skills?|
|Where do skill deficiencies exist within the current workforce?||How is the skill composition of the workforce changing?||Can the organization retain individuals required with key skills?|
|Where is the organization at risk for talent loss?||What do benchmark data reveal about industry and occupation trends?||Does the organization currently employ individuals with the skills needed to execute an organization’s objectives?|
|What is the demographic profile of the workforce?||What changes in economic conditions affect talent availability?||Can the organization develop required skills?|
|What is the productivity of the workforce?||What labor patterns impact changes in talent availability?||What talent is the organization at risk to lose?|
|Does the organization have the base skills required to develop key skills?||What legislation is pending that impacts workforce?|
Here’s one example of what a supply forecast might look like:
Workforce Supply Forecast
|Commercial & Strat Planning||3||.00||0||0||0|
|HR & Admin||14||.34||5||3||2|
|Commercial & Strat Planning||2||0||0||1||1||1|
|HR & Admin||0||0||0||9||6||4|
Anticipated Supply 2013 = Sum of Current Headcount – Anticipated Exits – Anticipated Retirements
Anticipated Supply 2014 = Sum of 2013 Anticipated Supply – Anticipated Exits – Anticipated Retirements
Anticipated Supply 2015 = Sum of 2014 Anticipated Supply – Anticipated Exits – Anticipated Retirements
Questions to Answer in Demand Analysis
Here’s Erwin’s checklist:
|What changes are anticipated over the next 2 years regarding:||How will these changes affect:||What is the planned organizational outlook for the future in terms of:|
|• Mission, functions, strategic and operational goals and objectives?
• Budget, trends, and patterns?
• Impacts of internal and external environment?
• Labor force trends?
• Shifting skills/competencies?
• Innovations in technology?
• Changes in organizational structure, including delayering, reorganizing, restructuring?
• Use of volunteers?
• Duration of projects and programs?
|• Volume, type, and location of work?
• Organizational structure and design?
• Mix of skills?
• Supervisor‐employee ratios?
|• Number of FTEs needed in the organization and skills and competencies of positions?
• Number and kinds of skills needed at each level of expertise?
• Number of supervisors and nonsupervisors?
• Number and types of teams?
• Diversity objectives?
• Developmental needs?
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