Information Database

One of the strategic goals of any Human Resource department is to be able to hire the right people at the right time.  Successful recruiting requires a staffing plan.  Some may think this is a game of chance or a skill that requires fortune telling.  In reality it is basic workforce planning.  Like other business planning, it requires you to look internally and externally to forecast your future staffing needs and to predict the availability of qualified candidates in the marketplace when and where you need them.

A simple way to think about developing a staffing plan is to use this three-step process:

1.   Define where you want to be in x number of years.  Will your company be growing or maintaining?  Will you be introducing new products or services?  How many employees will you need?  What knowledge, skills, and abilities (KSAs) will be required to meet your future business needs?  Do this analysis for one year out and for five years out and for other dates when you anticipate major business changes will occur.  Once you have a good picture of your future requirements, move on to Step 2.

2.   Analyze the current workforce.  What KSAs do your current employees possess?  Create a skills inventory of your current staff.  Look at your succession or replacement plans.  Get copies of your employees' development plans.  Ask your employees what they want to be doing in five years.  You may be surprised once you complete an analysis of the talent you have in your company. This is critical information to meeting your future goals.

3.   Conduct a gap analysis.  How do you get from where you are today to where you want to be?  How will you fill future vacancies?  Will you search internally, externally, or both? Where will you find the candidates with the KSAs you defined in Step 1?  Can current employees be trained to fill some of your future vacancies?  Will you need to consider offshore recruiting?  What will be the cost of your recruiting efforts?  Will you have the budget?

Analysis and Tools for Forecasting

Knowledge, Skills, and Abilities (KSAs)

Human Resources must work with its business partners to determine the KSAs that will be needed by the business in the short term (up to one year) and in the long term (up to five years).  Many companies already have strategic plans in place that project business goals five years into the future.  These strategic plans can help Human Resources determine the headcount and profiles of future workers that will be needed by the business.  This type of analysis can be subjective, and it is important to involve as many stakeholders as possible in the process to get a comprehensive view.

Turnover Rate

Another important factor to understand when predicting future staffing needs is turnover rate.  The following formula gives you turnover rate as a percentage of total employees at a given point in time:

Number of terminations/Total number of employees=Turnover rate

You can calculate turnover rate for your entire company, for specific jobs, job families, or departments in your company. External turnover rates are often published for geographic regions or industries or by size of employer and can be useful information. Use both internal and external turnover rates to help you predict your future turnover.

Regression Analysis

For those with statistical expertise, regression analysis can be used for forecasting future staffing requirements. 

Trend Analysis

This is a way of looking at changes and patterns over time. You can study employment trends to help forecast future employment markets. 

For example, many economic studies project that computer software engineers will be one of the fastest growing occupations over the next five to ten years.  If an analysis of math and computer science student enrollment in U.S. colleges does not match or exceed the increased market demand for software engineers, we can predict a shortage of software engineer candidates over the short and long term.  Armed with this knowledge, we can begin planning now for ways to fill our future software engineer openings.  

Changing Workforce

It is critical to understand labor market trends to be able to plan for the future.  Some examples include:

• Generational differences. Get to know the values and wants of the different generations: Matures, Baby Boomers, Gen-Xers and Millennials (Gen-Y).
• Cultural diversity. More and more workers are not native English speakers.
• Gender diversity. The majority of the future workforce will be women.
• Skilled-worker shortage.

External Analysis and Information Sources

The Internet has put almost all of the external information we need at our fingertips.  Government reports and surveys are some of the best sources for researching employment trends.  Industry surveys, professional association Web sites, newspapers, and magazines are also good sources of employment trend information.  Local chambers of commerce and other business organizations publish this type of information, as do college career centers.  Monster.com monitors labor trends and publishes updated employment information including its annual Employment Index on its Web site at http://intelligence.monster.com/section2457.asp.  The Society for Human Resource Management (SHRM) publishes an annual in-depth paper on employment trends on its Web site at www.shrm.org.

Online government sources for information on employment trends include:

• Occupational Outlook Handbook at http://www.bls.gov/oco/. This searchable guide includes basic information on how occupations are expected to grow or decline in the next five to ten years.
• Occupational Employment Statistics, US Bureau of Labor and Statistics at http://www.bls.gov/oes/. All kinds of useful information about employment.
• U.S. Census Bureau at http://www.census.gov/. Data from the last census.
• State Occupational Projections at http://www.projectionscentral.com/. Information on this site allows projected employment growth for an occupation to be compared among states. It also allows projected employment growth among occupations to be compared within one state. The database always shows ten years of projected growth, with updated data added about every two years.
• State Labor Market Information. Check your state's labor department for statistics on employment, wages, and industry trends.