Planning

The planning process in staffing involves making forecasts of an organization’s future hiring needs and developing methods the organization can use to meet these needs. The process of planning involves a combination of forecasting labor needs, comparing these needs to the labor availabilities, and determining where gaps exist. After these gaps are identified, general plans for filling these gaps are enacted.

Beyond the process of developing objectives for the number of individuals to be hired, planning activities often take the demographic composition of the workforce into consideration. Attending to the demographic breakdown of the workforce is important for a number of reasons. One is to ensure that the company has employees who can understand the perspective of the populations the company serves. The second reason is to minimize concerns about Equal Employment Opportunity violations2. For both purposes, the current workforce can be compared to the demographic characteristics of other individuals who work in similar jobs.

Planning for the State of Washington: Forecasting Requirements and Availabilities

The Staffing Services Director, Daryl Perrone, has requested your assistance in the completion of an HR planning analysis for the 50 stores in two regional divisions in the state of Washington. After these overall goals are developed for the state, the policy will be disseminated across all 50 individual stores. Data from the individual stores will then be sent to the corporate offices for analysis and re-evaluation.

The basic model for planning includes (1) forecasting labor requirements, (2) forecasting labor availabilities, (3) conducting environmental scans, (4) determining gaps, and (5) developing action plans. These steps are described in Staffing Organizations. Conducting an adequate human resources selection plan will require you to take all of these steps.

Historical data from these two divisions have been presented in the transition probability matrix. Information on how to read transition matrices is provided in Staffing Organizations. The transition probability matrix was developed based on the historical staffing pattern for Washington over the past five years. A first stage of investigating staffing is to use the previous years’ staffing patterns as a preliminary forecast of labor requirements, the internal availability based on retention, internal promotions, transfers and demotions, and a determination of gaps by subtracting forecasted availabilities from future requirements.

2 It is important to note that a discrepancy between the current workforce and the available workforce is not sufficient to demonstrate an EEO violation.

Table 1.1 Markov Analysis Information
Transition probability matrix Current year
(1) (2) (3) (4) (5) Exit
(1) Store associate 0.53 0.06 0.00 0.00 0.00 0.41
Previous (2) Shift leader 0.00 0.50 0.16 0.00 0.00 0.34
(3) Department manager 0.00 0.00 0.58 0.12 0.00 0.30
(4) Assistant store manager 0.00 0.00 0.06 0.46 0.08 0.40
(5) Store manager 0.00 0.00 0.00 0.00 0.66 0.34

Forecast of availabilities Next year (projected)
(1) (2) (3) (4) (5) Exit
Current Workforce
(1) Store associate 8,500 4505 510 0 0 0 3485
Previous (2) Shift leader 1,200 0
(3) Department manager 850 0
(4) Assistant store manager 150 0
(5) Store manager 50 0

Gap analysis Next year (projected)
(1) (2) (3) (4) (5)
Year end total (column sum) 4505
External hires needed
(current workforce-total) 3995

Forecasting Labor Requirements

The Washington market is very stable for Tanglewood. Most stores have been in existence for 10 or more years, and were indirectly managed by either Emerson or Wood when they were first established. Because of this stability, the estimate for the coming year’s labor requirements is identical to the current year. So, for example, they currently have 1,200 individuals working as shift leader, and expect to need 1,200 individuals to work as shift leaders for the coming year as well.

Forecasting Labor Availabilities

One primary source of information for immediate labor availability at Tanglewood is their internal labor market. Table 1.1 shows that Tanglewood has used internal promotions to fill many openings for the department manager, assistant store manager, and store manager positions. For example, it is projected that 16% of shift leaders will be promoted to the rank of department manager, 12% of department managers will be promoted to be assistant store managers, and 8% of assistant store managers will be promoted to be store managers. However, it also appears that there will need to be considerable external hiring as well, since only 46%-66% of employees stay in the same position over a one year period.

To estimate a labor forecast, the proportion (percentage) of individuals for the next year is multiplied by the current workforce number. For the shift leader, there are 1,200 individuals in the position, of which, 50% will remain for the next year. This means that the projected availability is 1,200 × 50% = 600. Similarly, 16% of the shift leaders will be promoted to be department managers, so 1,200 × 16% = 192.

Conducting Environmental Scans

The environment for staffing managerial employees at Tanglewood in the state of Washington is fairly complex. Externally, there is a consistent supply of qualified individuals in the urban markets of Seattle and Spokane. Individuals from these urban areas often are transferred to small towns as they move up the promotion chain. However, retail is often seen as an undesirable market for recent college graduates. Many know of retail work experience, and see it (partially correctly) as requiring long hours, low pay, and frequent conflict with lower-level employees. While these factors lessen as individuals move up the hierarchy, many individuals are reluctant to put in several years in the shift leader and department manager positions to be promoted.

The labor market in the Pacific Northwest has been relatively “soft” in recent years, meaning that unemployment rates are high and it is usually difficult for individuals to find new jobs. This weakness in the labor market has made it somewhat easier for Tanglewood to find new candidates for the managerial positions, but recent forecasts suggest that expansion in the professional and managerial sectors of the labor market may reduce the number of individuals available for these jobs.

Internally, Tanglewood has relied on its experienced employees as a major source of talent. As noted earlier, the company promotes extensively from within. As a result, managerial employees often have significant experience with the company’s social environment and culture. This internal staffing strategy is seen as a real strength for the company, because the possibility of being promoted is believed to increase retention of lower level employees.

Determining Gaps

The current focus of staffing is to fill the vacant positions, although the organization would like to take steps to reduce the turnover rate for many of these jobs as well. During the planning phase targets are set for the number of individuals who need to be hired. The process of turning these estimates into actual employees will be covered in the recruiting phase. There are 1,200 shift leaders currently, so if 600 individuals stay, Tanglewood will need to hire 600 more. The calculation of gaps is demonstrated in Exhibit 3.9 in Staffing Organizations; refer to this when you are determining gaps for Tanglewood.

Developing Action Plans

Having developed a picture of the number of individuals Tanglewood will need to fill their positions in the coming year, there are several important decisions to be made regarding how to fill these gaps. The company’s philosophy for filling vacancies is a combination of tactics. Tanglewood has one managerial track that promotes sales associates to be shift leaders, then promotes shift leaders to be department managers, and so on up the managerial hierarchy. An alternative managerial track is bringing in either recent college graduates or individuals who have extensive experience in another store chain directly into the assistant store managerial position.

Regardless of where employees come from, the corporate staffing function endorses a strong commitment to developing long-range relationships with its workers. Many employees initially have difficulty adapting to the unique culture of Tanglewood, so the company is not happy to see experienced employees who have been socialized leave. There are also concerns that having too many employees come and go will dilute the company’s strong culture.

There are reasons why the company may consider alternative perspectives on the employment relationship in the near future. First, fluctuations in the economy have meant that the company carries excess employees during some periods of the year, and has a deficit of employees during other periods. There is some seasonal hiring for store associates (e.g., hiring temporary employees for the holiday season in December), but the managerial workforce numbers are typically fixed. Second, to preserve the company’s culture, some have suggested having all new managerial employees spend at least a little time in the Washington stores to get a sense of how the stores originally worked. These assignments would be short term in nature and would probably require a more contingent outlook for the employees they supervise.

Representation Concerns for the Flagship Store in Spokane

The problem of selection planning is made considerably more complex because of Equal Employment Opportunity (EEO) requirements that fall on organizations that do business with the federal government. Because several Tanglewood locations are near military bases or government offices which have expense accounts for general merchandise items at Tanglewood, all staffing must be done consistent with the OFCCP affirmative action requirements. In the current case, Tanglewood needs to use information from their staffing records to examine whether the company has a disparity in outcomes for different groups of employees. When the proportion of protected classes being hired or currently employed falls below the proportion in the labor market, this may indicate intentional or unintentional discrimination in hiring and promotions that will need to be addressed through affirmative action planning. There are also growing concerns within the organization that a combination of rapid growth and high turnover threaten to create real problems in terms of the demographic breakdown of employees at the organization.

Acting as part of a team of staffing professionals, you have been asked to analyze the hiring and promotion activities of Tanglewood as they relate to the issue of disparate impact. The first level of disparate impact analyses for the purposes of OFCCP reporting and affirmative action planning are always done at the establishment level. An establishment, for Tanglewood, is a single store.

This analysis will concern the corporate flagship store in Spokane, Washington. This is the largest location within the Tanglewood chain and serves as an example for all other

locations. The store has approximately 75% more employees than an average location, making for a total of 30 department managers, 42 shift leaders, and 300 store associates. There are five assistant store managers and one store manager. The primary concern for representation data is in the groups of department managers, shift leaders, and store associates.

To assess the problem of discrimination, data from the previous year’s employees stocks in Spokane were assembled. The data on the next page are broken into two tables. The first shows the company’s current employee availability data, and the second provides a template for comparing incumbency to availability.

Analyzing utilization of protected classes from the labor market requires comparing the availability of protected classes (i.e., the proportion of the available work force who are members of protected classes) to the utilization of protected classes (i.e., the proportion of those hired or employed who are members of protected classes) for each job. You can find additional information on this topic in Staffing Organizations.

In a stock analysis, data from EEO-1 reports conducted by the Equal Employment Opportunity Commission are used to determine how many people in a certain region are available to do the job (including those currently employed in similar jobs). The data for the current analysis comes from the job patterns for minorities and women in private industry tables, which were specifically designed by the government for the purpose of conducting EEO analyses. The most recent website for this information is below:

http://www1.eeoc.gov/eeoc/statistics/employment/jobpat-eeo1/

The appropriate data can be found through the following steps:
1) Go to the website above
2) Indicate that you want the 2015 tables
3) Indicate that you want data for States, by NAICS-2
4) Indicate that you want data for Washington
5) Indicate that you will select the industry of Retail Trade
6) The appropriate table should be displayed.

Store associates and shift leaders are considered, for the present analysis, as sales workers, while department managers are first/mid-level officials and managers.

The Procedure for Developing an Affirmative Action Plan

Tanglewood’s internal staffing policy as recently articulated from central management is to retain as close a correspondence between their current representation and the available workforce. The primary goal for this year is to focus attention on achieving better numbers for gender representation, but they would like to examine other demographic groups in the future.

The source for the external data in all cases is from the EEOC data described earlier. The source for internal data is the current workforce of the flagship store. To determine the availability for each job category, the raw statistics for percentage of female and minority available employees are multiplied by the value weight, and then these weighted statistics are added together within each job category. As such, the internal pool of potential shift leaders includes all current store associates, and the internal pool of potential department managers includes all shift leaders.

Table 1.2 Determining Availability
Raw Availability
Rate Value
weight Weighted
Statistics
Female Minority Female Minority
Store associates External 64.0% 28.8% 100% 64.0% 28.8%
Shift Internal 55.7% 21.0% 92.4% 51.5% 19.4%
Leaders External 64.0% 28.8% 7.6% 4.9% 2.2%
Total 56.3% 21.6%
Department Internal 52.9% 16.7% 65.7% 28.2% 11.0%
Manager External 37.8% 25.4% 34.3% 13.0% 8.7%
Total 47.7% 19.7%

The availability data are taken from Table 1.2 and then used for determining if some demographic groups are underrepresented in the workforce of the flagship store, and also for developing placement goals. A shortage exists if there is a discrepancy between the current workforce and the available workforce as calculated by the ratio of the current workforce divided by the current workforce. As shown in Exhibit 3.18 in Staffing Organizations, if the incumbency percent is below 80%, the organization is encouraged to establish a goal of moving their demographic representation in line with the available workforce. To estimate this proportion, the incumbency for females is divided by the availability for females, and the incumbency for minorities is divided by the availability for minorities.

Table 1.3 Comparing Incumbency to Availability and Annual Placement Goals
Female Incumbency Female Availability Incumbency percent?
Establish goal? If Yes, Goal
for Females Minority Incumbency Minority Availability Incumbency percent?
Establish goal? If Yes, Goal for Minorities
Store
associates 55.7% 64.0% 87.0%
No goal 22.3% 28.8% 77.4%
Set goal 28.8%
Shift
leaders 52.9% 56.3% 94.0%
Set goal 16.7% 21.6% 77.3%
Set goal 21.6%
Department
manager 31.5% 41.2% 76.5%
Set goal 41.2% 16.7% 19.7% 84.8%
No goal

Specific Assignment Details

For the store manager group, you will analyze the information and prepare a report showing the results of the Markov analysis and the EEO investigation. The Director asked you to address these questions in your written report:

1. Currently the organization expects that their forecast for labor requirements is essentially constant from the previous year. Based on this assumption complete the five stages of the planning process:
   a. Currently the organization expects that their forecast for labor requirements is essentially constant from the previous year. This means the forecast for next year will be taken as given.
   b. Fill in the empty cells in the forecast of labor availabilities in Table 1.1.
   c. Conduct an environmental scan. Based on the environmental data, what factors in the environment suggest Tanglewood might have difficulty filling their vacancies in the future?
   d. Compute year end totals for each job in Table 1.1 and do a gap analysis to determine where shortages will occur in the next year.
   e. Develop a preliminary statement of the action plan for hiring for Washington next year. This should be an overview of the number of individuals needed to meet projected staffing levels for various positions that can be given to store managers. Make sure that your recommendations take the strategic staffing levels issues from the introductory case into account.
2. Examine the percentages of employee representation across demographic categories for Tanglewood and the available labor market for Table 1.3. Are there any particular classes or jobs where the representation within Tanglewood appears to be out of line with the available workforce? What does the pattern suggest to you?
3. Based on your analysis and the affirmative action plan, do you think the company should engage in a specific strategy to change their recruiting and promotion practices? Do you think it is realistic for the company to try to meet their affirmative action goals in this process in a single year? What are the pros and cons of using internal promotions vs. external hiring to rectify the problems with gender and ethnicity representation in supervisory positions?
4. In addition to the specific targets for employee representation for the Spokane flagship location, Tanglewood wants to use this opportunity to establish estimates for the entire chain’s staffing policy regarding demographic representation of the workforce. How do you think individual stores can respond to overarching organizational objectives? Prepare a memo to be disseminated to the individual stores that gives a sense of your targets for the organization as a whole, and also gives the stores advice on how they can assist in narrowing any representation gaps you find through their recruiting, hiring, and promotion practices.