WHAT IS PERSONNEL PLANNING?

Personnel planning is an important development in human resources

management. It has spread rapidly to nearly every size organization in almost
every kind of business.

The primary function of Personnel planning is to analyze and evaluate the human
resources available in the organization, and to determine how to obtain the kinds of
personnel needed to staff positions ranging from assembly line workers to chief
executives. Smaller companies put Personnel planning in the human resource or
personnel department. Some of the largest corporations have established separate
departments for this function.

WHAT ARE THE PURPOSES OF PERSONNEL PLANNING?

Personnel planning aims to reduce waste in employing people, lessen uncertainty

about current Personnel levels and future needs, and eliminate mistakes in staffing.

Its purposes also include avoiding worker and skills shortages, stopping the profit-
eroding effects of being over- or understaffed, preparing succession plans and
shaping the optimum future work force by hiring the right managers, technical
specialists and skilled workers in appropriate numbers.

WHAT ARE THE TRENDS THAT IMPACT PERSONNEL PLANNING?

A Personnel planner seeking to identify trends in human resource management

should include the following variables:

1. The state of the economy. The larger the

company's sphere of operations, the broader the
spectrum of economic activity to consider.

2. Demographics. The age and sex groupings of the

population and what may happen to them in the
future.

3. Employee losses or turnover. How will

retirements, deaths, promotions and resignations
affect the current number of individuals employed
at every level?

4. New skill requirements. What new skills will

be needed due to new technology markets or
products?

5. Obsolescence of current skills and its effects.

6. The status and direction of materials prices.

 7. The availability of materials--can they be cut
off by uncontrollable events?

8. Technological changes.

9. Social changes. What effects do upgrading of

educational backgrounds have on the willingness of
people to take menial or other types of lower
level jobs?

10. Labor costs. In which direction and how far will

they go? What are the alternatives?

HOW DOES A COMPANY ORGANIZE FOR PERSONNEL PLANNING?

While Personnel planning does not require formation of an independent

department in most companies, it does require a manager or executive responsible
for studying trends and for identifying and calculating Personnel requirements. The
responsible person, who may have other duties in the company, must know
company policy and be acquainted with its long-range objectives. He or she should
understand what's involved in training and career development, and should be able
to design career programs to improve basic capabilities, develop professional
competence and teach new skills.

The Personnel planner must organize in the following areas:

- Maintenance of a good data base of the

organization's human resources.

- Acquisition, retention and career development of

the company's high talent people, such as engineers,
scientists, and key managers and executives.

- Supervision of the design of various training

programs.

- Surveys of current economic and social conditions

and their trends.

WHERE DOES THE PERSONNEL PLANNER FIT INTO AN ORGANIZATION?

Companies with fewer than 100 employees usually assign the Personnel planning
function as an additional duty to a specific executive, such as general manager,
production manager or the personnel manager. Large companies employ a
Personnel-planning specialist and may create a separate department for the
function.
 The position of the planner is not as important as the qualifications of the
individual. The task is advisory and investigative. Whoever runs the planning
operation is a staff rather than line person and will not issue direct orders to other
managers.

WHERE DOES PERSONNEL PLANNING BEGIN?

Personnel planning begins with a clear understanding of the current Personnel

situation in the company. The first step is an analysis of current Personnel--
numbers, skills and skill levels. The second is the creation of a skills inventory.

HOW DO EMPLOYMENT APPLICATIONS CONTRIBUTE TO PERSONNEL PLANNING?

Employment applications, when properly constructed, can help build a database

for Personnel planning. Research starts with employment applications. The more
detailed the application, the more information the planner can gather.

From the employment application form, the Personnel planner can compile certain
information such as:

1. Number of secondary school graduates

2. Number of college graduates

3. Disciplines studied at colleges and types of

degrees earned

4. Listings of prior work experiences

5. Listings of types of work desired

WHAT INFORMATION SHOULD BE INCLUDED IN AN INVENTORY OF SKILLS

CURRENTLY AVAILABLE IN A COMPANY?

A well-designed skills inventory includes much information not directly related to

on-the-job skills and performance. Include many kinds of information for the start-
up of Personnel planning. Your organization may grow, shrink or have changing
needs. It's easier to gather information at the beginning rather than to re-work it at
a later date.

Include the following data in your skills inventory:

Name, address, telephone number Date of birth

Current position Skill level

Years (months) with company Education

 Marital status Dependents and their
ages

Salary history Seminars and

training completed

Disciplinary actions Date of retirement

Future assignments Future assignments

(company planned) (employee
preferences)

Willingness to relocate Language abilities

Restrictions on assignments Hobbies

Published works Patents obtained

Special qualifications Unusual combinations

of high-level skills

For each group of employees, gather as much information in your skills inventory
as possible. Some companies supplement the information gathered from the
employment application by asking employees to fill out comprehensive personal
history files after they've been on the job for awhile. Add new items as they seem
necessary. Be sure to keep the inventory up-to-date as changes are made. And in
all cases maintain only that information permitted by federal and state law.

WHAT ARE THE STEPS TO DEVELOP HUMAN RESOURCE DATA FOR FUTURE
PERSONNEL NEEDS?

Organizing the data requires a certain amount of cross-filing and tabulating. In a

small organization, this can be done manually, though a personal computer will
serve to make organizing, updating and accessing data easier.

Large companies use their central data processing systems to store human
resource data and write programs to accomplish tasks the Personnel planner
desires. Among the data processing capabilities the planner should have are
abilities to sort data relating to the length of service, pay grade, educational level,
disciplinary background, marital status, and number of dependents. Other
classifications are possible, especially when the data is gathered and stored by
computer. The Human Resources Data Sequence Checklist (7-01) graphically
depicts the data gathering and organization sequence.

HOW CAN OCCUPATIONAL CODES BE DEVELOPED TO HELP ORGANIZE AND ACCESS

EMPLOYEE INFORMATION?
 An occupational code, which is a numerical designation for each type of job,
focuses on the qualities of each individual and permits planners to see at a glance
not only the skills of each individual, but the level of competence and other data.

Most planners do not need the precise designations of an occupational code that
the government has devised, though you can use such a system if available.
Usually, a simple alphabetical list of skills will serve the purpose of listing individuals
with the same qualifications under one heading.

For instance, a partial listing might look like this:

- Assembler, electrical

- Assembler, mechanical

- Machinist

- Mechanic, fork lift

- Operator, drill press

- Operator, milling machine

List the names of each person possessing a skill on the appropriate skill card, or
store on a computer. List those with combinations of skills, too.

WHAT ARE THE EFFECTS OF TURNOVER ON PERSONNEL PLANNING?

Turnover creates unnecessary expense and reduces efficiency. Productivity

drops. When a planner identifies high turnover in a specific department, the quality
of training and supervision in that department should be looked into. As a part of
the human resources function, the planner would contribute to the decision on what
steps should be taken to remedy the turnover situation, such as training, pay and
incentive improvements, and the like. The human resources manager would then
go to management with the problem of turnover and make the combined
recommendations.

It's also important to determine exactly why workers, supervisors or managers

leave. Every departing employee should have an exit interview and your company
should maintain a record of the reasons for leaving. You should ask individuals who
quit to fill out an Exit Interview Attitude Survey.

Plans to reduce turnover are an important part of a Personnel planner's job. The
success in the task of reducing turnover goes a long way to insuring that a company
has the right number of persons with the right skills to fulfill the company's needs
and make it a successful organization.

WHAT USES DO PERSONNEL PLANNERS MAKE OF TURNOVER FIGURES?

 Planners use turnover figures to pinpoint departments where turnover is occurring
and to discover its causes. For instance, the planner may find that poor supervision
is an important cause of turnover. If so, he or she can take steps to have something
done about the quality of supervision in the affected area.

Age is also a factor in turnover. Older employees tend to be more stable than
young workers. Overqualified employees are very unstable and entry level workers
are likely to quit soon after they are hired.

Among executives, a high turnover rate among the younger ones often indicates
that something is wrong with the way the company manages its career
advancements. Personnel planners should bring these matters to the attention of
top management with recommendations for corrective actions.

HOW DO CHANGES SUCH AS AUTOMATION AND COMPUTERIZATION AFFECT

PERSONNEL PLANNING?

When planners examine company records, they should learn whether the
introduction of new machines, methods or materials have altered the numbers of
people with certain skills. Such information is important for forecasting future
requirements.

If the introduction of a computer-controlled machine, for example, results in the

elimination of machine operators, these skills should be eliminated from the
inventory of needed skills. They should be replaced, of course, with those needed
to run the computer-controlled machines and with specialists skilled in electronic
maintenance.

As planners uncover such changes and trends, they can concentrate on the new
skills needed and no longer consider those that are not. Turnover figures also affect
training programs. The planner examines them to find out how well or poorly such
programs are serving the company's objectives.

WHAT IS THE ROLE OF THE PERSONNEL PLANNER IN CAREER PLANNING?

The Personnel planner usually has a distinct advantage over other managers and
executives when it comes to career matters. It is essential for successful execution
of the job that the planner be very clear and up-to-date about the organization's
objectives.

The objective of career management from the company's viewpoint is to ensure

the availability of qualified successors for every important position. Managers and
supervisors want to get ahead, earn good salaries and gain new opportunities. Only
rarely can these individuals clearly define what getting ahead means to them.

The planner, though, knows what sort of person should be in a specific job, or as a
backup for a specific person. Through skillful career guidance, the planner has the
leverage to encourage supervisors and managers to prepare for advancement.

HOW DOES THE PERSONNEL PLANNER PREPARE FOR FORECASTING FUTURE

PERSONNEL REQUIREMENTS?

Practical Personnel forecasting should generally be limited to five years or less.

Society and technology change too rapidly to permit accurate forecasting for longer
periods of time.

The planner begins by studying the company's operational plan in detail to

determine its objectives regarding:

- Capital investment in buildings and new machinery

- Proposed changes in product design

- Proposed introductions of new products

- Changes in materials to be used

- Changes in sales volumes forecast

In addition to these major influences on future Personnel requirements, the

planner considers turnover rates, retirements, internal promotions, and effects of
improved supervision. He or she must also consider the learning curve, that is, how
long it takes for qualified personnel to reach full output after any changes have
been made.

HOW DOES THE PERSONNEL PLANNER ESTIMATE THE NUMBERS OF PEOPLE AND
THE SKILLS THE COMPANY WILL NEED?

Estimates of the company's economic activity, usually prepared in the marketing

or budgeting area, form the basis for the planner's calculations. He or she first
determines the relationship between how many and what kinds of people the
company requires to produce the current volume of product.

There is not a linear relationship between increases in volume and Personnel

requirements. An increase of 50 percent in annual production will not necessarily
require a 50 percent increase in managers. It might, though, require a 50 percent
increase in entry-level workers, depending upon their productivity levels.

The Personnel Requirements Planning Form--Short Term, is used by planners to

estimate the numbers of people and skills a company will need within the next year.
The Personnel Requirements Planning Form--Long Term, is used for periods beyond
one year. When using the worksheet, a planner discusses actual needs with various
managers. He or she also gets input from top management. The planner enters on
the worksheet a consensus, tempered by personal knowledge and experience, of
everyone's best estimates.
 Forecasting high-level personnel needs is directly related to the accuracy of the
company's plans, particularly its long-range ones. The planner must make
allowances for promotable individuals within the company, as well as the need to
recruit managers from outside.

Requirements for high-level personnel do not appear as quickly as for production

people. The business can grow substantially before it becomes necessary to create
new areas which require managers or new divisions or groups headed by general
managers. A planner must take these lags in the timing of personnel requirements
into account.

WHAT ROLE DOES THE PERSONNEL PLANNER PLAY IN SUCCESSION PLANNING?

Every company should have a succession plan that identifies a qualified

subordinate who is ready to replace each key manager or executive. While the
planner has no authority to select successors, he or she should, with the help of top
management, prepare a succession chart that does name subordinates who can
step up when a superior departs.

The Succession Chart (7-05) should, of course, be kept strictly confidential.

Advance publication is likely to demoralize managers who find themselves passed
over.

The names above each job title are the incumbents. The names below the line
are the prospective successors. A more complete chart would extend further to
show the succession at more levels, especially in a large company. To be useful,
the succession chart must be kept up-to-date.

HOW DOES PERSONNEL PLANNING HELP COPE WITH SKILL SHORTAGES?

Rapid advances in technology cause serious mismatches between the jobs that
are available and the number of people with the necessary skills to fill those jobs.
In addition, rising levels of education have brought with them rising expectations
among employees at all levels. As a result, some workers will not accept training or
positions that they believe are not beneficial to their careers.

By analyzing tasks, the Personnel planner often finds that a company is not
achieving maximum efficiency in its use of a certain type of talent. Some jobs are
held by individuals who have more advanced skills or training than is needed.
Sometimes the task can be done by a lower-level worker, rather than, say, a
university educated employee. The planner should bring this situation to the
attention of managers who have the authority to make the necessary changes and
thus relieve what seems to be a skills shortage.

Another approach which the planner might use would be to redesign jobs.
Reducing boredom and monotony, and increasing comfort, often increases
productivity. As a result, positions for which skills are in short supply may not
require more personnel, as more productive and skilled individuals produce more.

One company, faced with a shortage of skilled warehouse workers, built

automated warehouses. That reduced the number of workers needed while
increasing efficiency in the warehousing operation. Other options include finding
machines that can do the work; breaking down skilled jobs into less skilled
components; or modifying the product to eliminate the need for the skill that is in
short supply.

WHAT IS INVOLVED IN ADMINISTRATIVE CONTROL REGARDING A PERSONNEL

PROGRAM?

The planner must monitor the system on a continuing basis to ensure that it gets
results. Your Personnel planner will benefit from clearly expressed interest in the
program from top management. Such recognition gains cooperation throughout the
organization.

Whatever actions are taken in Personnel planning that affect the skills or
experiences of workers, office employees, supervisors or managers, must be
recorded. All such data must be made part of each individual's personnel record.
They must also be entered on the planner's skills inventory. Only when this is done
can the planner know the nature and number of personnel and skills available.

Regular reports from department heads play a part in administering the Personnel
planning program. Information the Personnel planner should receive on a regular
basis includes:

- Absentee rate

- Turnover rate

- Hard-to-fill jobs

- Names of exceptional individuals and their skills

- Requests for training programs

- Individuals who have been trained in certain skills

but are not working at the skill in which they are
most proficient

Monitoring the program allows the Personnel planner to compare what was
planned with what is actually happening. Thus, monitoring provides an important
form of administrative control.