LISA – SU 4 WORKFORCE PLANNING
Forecasting techniques - Methods used to predict the number of workers required
Job-sharing - A full-time job divided into two or more part-time positions
Labour demand - the estimated number of workers the organisation will need in the future
Labour supply - The estimated future availability of workers with the required skills
Long-, middle-, and short-range planning
Long-range planning: planning five or more years into the future
Middle-range planning: planning two to five years into the future
Short-range planning: planning for the next one to two years
Management information system (MIS) - Database of employee information used to make
managerial decisions
Skills inventory - Database of biographical and job-related information on staff members
Workforce planning - The process of planning to ensure that the right people are in the right
role at the right time in an organisation
8.1

Introduction
Every organisation must be able to attract a sufficient number of job candidates who have the
abilities and aptitudes needed to add value to the company.

An integrated and holistic resource and workforce planning process ensures that the right people
are in the right roles to meet the current organisational profit plan.
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8.2.
Workforce planning as part of strategic organisational planning

Workforce planning is a systematic, fully integrated organisational process.

See Figure 8.1 where the strategic HR planning and strategic organisational planning model is
discussed.

Workforce planning is based on a forecast of future talent needs and an analysis of the current
supply of talent.

The process of workforce planning and recruitment should be closely linked to the business
cycle.
8.2.1 Workforce planning

Although workforce planning is an HR activity, it is critical for the success of the organisation
and it should align with the organisation’s plans and objectives.

See Figure 8.2 where the external influences on workforce planning are outlined.
8.2.2 The impact of good workforce planning

Good workforce planning eliminates surprises, smoothes out business cycles, identifies and
prevents problems early on, takes advantages of opportunities and improves the image of the HR
department.

See Figure 8.3 where an integrative model for successful labour recruiting to achieve goals is
presented.
8.3

Key areas of workforce planning
Workforce planning systems can be categorised into three basic focus areas, as seen below.
8.3.1 The talent and demand forecast

The talent forecast predicts the demand and supply of talent.

The forecast process is divided into four different areas.
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8.3.2

Trend projection and talent action plans
Talent action plans comprise three general activities:
*
Sourcing and recruiting an adequate supply of leaders and key talent
*
Identifying and grooming internal development and the supply of qualified leaders and
key talent
*
Forecasting the gap between talent needs and its availability.
8.3.3 The integration plan

The integration plan relates to the implementation of all the action plans in order to meet the
labour needs of the organisation completely. Refer to Figure 8.3 again.
8.4

Steps in the workforce planning process
Firms that do not conduct workforce planning may not be able to meet their future labour needs
(a labour shortage) or may have to resort to layoffs (in the case of a labour surplus).

Cascio and Aguinis (2005) state that HR and management must devise an inventory of available
knowledge, skills, abilities, and experiences of present employees in the organisation.
8.4.1

Forecasting labour demand
The first activity in workforce planning entails forecasting labour demand, that is, the estimated
number of workers the organisation will need in the future.

Forecasting techniques
Forecasting techniques can be categorised as quantitative and qualitative:

Quantitative methods are used more often, but have two main limitations:
1. They rely heavily on past data or previous relationships between staffing levels and other
organisational variables
2. Most of the quantitative techniques were created between 1950 and the early 1970s, when
the large firms of that era had stable environments and workforces
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
Qualitative techniques rely on experts’ (usually top managers) qualitative judgements or
subjective estimates of labour demand or supply

Subjective methods may be less accurate than those obtained through quantitative techniques

See also Table 8.1 where quantitative and qualitative techniques of labour forecasting are
illustrated.
8.4.2 Estimating labour supply

This activity entails estimating the availability of workers with the required skills to meet the
labour needs of the company in the future.

Labour supply may come from existing employees (internal labour market) or from outside the
organisation (external labour market).

Skills inventories and management information systems (MIS)
Typical information found in a skills inventory or an MIS includes for example:
*
Personal or bibliographical data
*
Language skills
*
Training and development programmes attended.
8.4.3 Implementation of the workforce plan

The results of the labour-demand forecast and labour-supply estimation determine the course of
action that must be planned.

The way in which the workforce plan is implemented depends on whether labour demand
exceeds labour supply, whether labour supply exceeds labour demand, or whether labour demand
equals labour supply.

See Table 8.2 where ways of implementing the workforce plan are illustrated.
8.4.4 Control and evaluation of the workforce planning system

This system guides HR activities that identify deviations from a plan and their courses.

Qualitative measures include, among others, the following:
*
Actual staffing levels against forecast staffing requirements
*
Actual personnel flow rates against desired rates
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*
Ratios of action programmes benefits to action programme costs.
THE END – SEE LISA NOTES PART 2 Employment equity
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