Management Consulting/MS-23 IGNOU Questions


Q-1 Explain the various methods of human resource supply in an organization you are familiar with. Discuss the employee turnover analysis. Describe the different techniques for supply management.

5. Explain the various methods of human resource supply in an organization you are familiar with. Discuss the employee turnover analysis. Describe the different techniques for supply management.



1.Corporate  VISION

2. Corporate  Mission

3. Corporate  Objective

4. Corporate  Strategy

5.Corporate  Organization  Policy/ Budget  Guidelines.

6. Corporate  HR  objective/ strategy

7. Corporate  Industrial  Relations   Policy

8. Corporate  Sales  forecasts  

9. Corporate  Product  Plans
10. Corporate  Production forecasts.
HR    Planning  includes


1.Assessment / Audit  of  the  current  manpower  profile

and  also

-normal turnover,
-staff  movements  planned
-succession planning








These  include

-Recruitment/ Selection  PLAN
-Induction / Orientation PLAN
-Training  / Developement  PLAN
-Compensation  PLAN
-Salary  administration  PLAN
-Payroll  Administration  PLAN
-Performance  Appraisal  PLAN
-Performance  Management  PLAN
-Industrial  Relations  PLAN
-Promotions  PLAN [ IF  ANY ]
-Terminations  PLAN
-Transfers  PLAN
-Staff  amenities. PLAN
-retraining  plan
-early retirement  plan
-redundancy  plan
-changes in  workforce utilization  plan
-career  path  plan
-succession  plan.
-personnel  and  career  plans



-as  the  economy  grows/declines, the  demand  for  HR resources
changes  not  only  in  quantity   but  also  in  quality/ types.

-social  pressure  to  provide the right environment  for  employees.

-political  pressure  to employ  local  population, irrespective
 of  skills/ knowledge.

-legal  challenges  to  recruitment /  compensation  on   
 discrimination .

-technology  changes  means  getting  right  type of  people
or  provide  the  right  type  of training.

-competitive  pressure  to  get  the  right  talent at the  right

-CORPORATE  strategic  planning  seeks  strategic  HR  planning.

-BUDGET  constraint  put  pressure  on  HR  to get  the
best  resources  for  the  least.

-sales / production  increases  in  business, puts  pressure
on  HR    to  recruit  more.

-sales / production  decreases  in  business, puts  pressure
on  HR    to  rationalise  recruitment.

-new  venture means  demand  for  new  type of  skills/ knowledge.

-acquisitions /  mergers  means  rationalization  of  HR.

-Organization  development   means  HR  implementing  new
structure, new  culture, new  systems  etc.

-Job  redesign  means  HR  implementing  new
 methods, new   process, new  systems  etc.

-Globalization  means   managing  HR  diversity, new  culture
change, new  training  etc.

-HR    challenges /  difficulties  include  
*managing  retirement
*managing  voluntary  retirement  schemes
*managing  terminations
*managing  leave  of  absence.
*managing  part time  workers/ causals.
*managing  layoffs


-staff  skills  inventories
-management  inventories
-replacements  requirements
-transition  requirements

-labor  market  supply
-community  attitude
-demographic  trends

-shorter  weeks
-virtual  organizations.
1.Corporate  VISION

2. Corporate  Mission

3. Corporate  Objective

4. Corporate  Strategy

5.Corporate  Organization  Policy/ Budget  Guidelines.

6. Corporate  HR  objective/ strategy

7. Corporate  Industrial  Relations   Policy

8. Corporate  Sales  forecasts  [  3 or 5  ]

9. Corporate  Product   Plans [ 3 or 5   ]
10. Corporate  Production forecasts. [ 3 or 5  ]

AS  PART  OF   HR  PLANNING ,   review the  following
1.The  impact  of  technological  change on task needs.
2. Variations in the  efficiency, productivity, flexibility  of  labor  as  a
result  of  training, work study  organizational change, new motivations, etc.

3. Changes  in  employment practices [ e.g. subcontractors  or  
    outsourcing  etc ]
4.Other  variations due to  new legislations like new health requirements,
   safety  requirements etc.

5.Changes  in  government policies   like  tax/ tariff etc
6. Labor  demand  and  supply .

7. Skills   levels   availability

What should  emerge from  this  analysis / reviews  is a   "thought out"   
and  logical  staffing  demand  schedule for  varying dates  in the future
which  can then  be  compared  with  the  crude  supply   schedule.
The  comparison will then  indicate  what steps must be taken to
achieve a balance.

-informal  internal  surveys.
managers  prepare  their  own estimates based  on  workload.
-formal  external  surveys.
planners  survey  managers, using  questionnaires  or  
or  focused  discussion.
-delphi  techniques
solicit  estimates from  a  group  of  managers, until  the
estimates   converge.
extending  past rates  of  change  into  the  future.
matching  employment  growth with , say,  sales.
-statistical  analysis
-planning  and  budgeting  systems  
based  on  strategic  and  corporate  plannings/ budgeting.
-new  venture  analysis
making  comparisons  with similar  operations.
-computer  models
using  multiple  variables.
In  THIS   company,  HRM  is part  of  senior management.
HRM  makes  contribution  to the  development  of
-corporate  mission  statement
-corporate  objectives
-corporate  strategy.

The senior management  team  or TOP management would
consists  of
-ceo  or  managing director
-corporate planning  manager
-finance manager
-marketing manager
-manufacturing manager
-sales manager
-supply chain manager
-HR  manager

STEP 1[a]
TOP  management  would
-evaluate  the  current  [ last 12 months] performance  against  the
objectives / target set previously, which includes  return on investment,
profitability , etc  and  also  the  performance of various  departments
like  marketing, sales, HR, manufacturing, etc etc.

STEP 1 [b]
TOP  management will  also  evaluate the current  mission,objectives,
strategies and  policies.
STEP   2[a  ]
MD  will take  the summary  of  the evaluation of the current
performance  to  the  board  for  review.

STEP  2 [ b  ]
Based  on  the  review  plus  the  external environmental  factors,
the  board  will  make decisions  on  
-new  mission  statement
-new corporate  objectives
-new corporate  governance

STEP   3 [ a   ]

TOP  management  will  scan  and  assess the  company's
external  environment  --political/ economic/social/ technology.
to  determine  the  strategic  factors  that  pose   as  

STEP   3 [   b  ]

TOP  management  will  scan  and  assess  the  company's
internal  environment  --structure/ culture/resources  etc     
to  determine  the  strategic  factors  that  pose   as  

STEP  3[ c ]
TOP MANAGEMENT  will  analyze  the  the  strengths / weaknesses
of  the  organization  and  pinpoint  the problems  areas that needs
attention  and  the  strengths  that  could  be exploited.

Based  on  the  above analyses, TOP management  will generate,
evaluate, and  select  the  best  strategic  factors.

STEP   5
TOP  management  will  review  and  revise [ if  necessary ] the
mission statement and  corporate objectives.

TOP  management  will  generate and  evaluate strategy alternatives
and  objectives.

This  final  corporate  mission statement, objectives and  strategies
becomes  the  foundation information  for  the  various  departments
to  work  out  their  departmental  objectives/strategies/plans.

After  working  out  their  respective  objectives/strategies/plans
and  the  budgets ,  the  departmental  managers send  their
respective  information  to  the  TOP  management  for

On  receiving   the  approved  package  from  the  TOP  management,
the  departmental  managers  develop  the  implementation plan.

STEP 10.

NOW  you  have  mission/objectives/strategies/plans/budget/schedules.



IN  case  of   HR,  which  is  a  department  by  itself,
MUST  discuss with  other  departments  of  their
expectations/ intentions  on  HUMAN  RESOURCES.

This  final  corporate  mission statement, objectives and  strategies
becomes  the  foundation information  for  the  HR  department
to  work  out  your  departmental  objectives/strategies/plans.

Discuss  with  the  various  other departments  like sales/ production/
distribution/accounting/  IT  etc  about  their  requirements
-for manpower
etc etc

Once  you  get  their  departmental  requirements,  HRM  develops

-staff  skills  inventories
-management  inventories
-replacements  requirements
-transition  requirements

-shorter  weeks
-virtual  organizations.


HR    Planning  includes


1.Assessment / Audit  of  the  current  manpower  profile

and  also

-normal turnover,
-staff  movements  planned
-succession planning








These  include

-Recruitment/ Selection  PLAN
-Induction / Orientation PLAN
-Training  / Developement  PLAN
-Compensation  PLAN
-Salary  administration  PLAN
-Payroll  Administration  PLAN
-Performance  Appraisal  PLAN
-Performance  Management  PLAN
-Industrial  Relations  PLAN
-Promotions  PLAN [ IF  ANY ]
-Terminations  PLAN
-Transfers  PLAN
-Staff  amenities. PLAN
-retraining  plan
-early retirement  plan
-redundancy  plan
-changes in  workforce utilization  plan
-career  path  plan
-succession  plan.
-personnel  and  career  plans

The elements  in  HR  department  budget  would  vary  with
-company  policy
-budget  process
-company  accounting  system
-nature of  the business operation

HERE  is  a  broad  set  of   guidelines.

-recruitment/ selection [ internal/ outsourcing ]
-PLACEMENT contractors [external ]
-salary/ wages
-training/ development [ includes  induction/ orientation]
-staff benefits
-staff  amenities
-workplace  facilities
-workplace safety [ OHS]
-salary  contingency
-workers  compensation
-staff  communication [ includes newsletter/ intranet ]
-labor relations [ legal/ investigations]
-HR administration
-HR travels
etc etc.
These   plans  will  help  to  bring  supply  and  demand  into  equilibrium,
not  just  as  a  one-off   but  as a  continual workforce  planning
exercise  the  inputs  to  which  will need  constant  varying  to reflect
the  actual  as  against  predicted  experience  on the  supply  side
and  changes in  production actually  achieved as  against  forecast
on the  demand  side.

The information gathered from external environmental scanning and assessment of internal strengths and weaknesses is used to predict or forecast HR supply and demand in light of organizational objectives and strategies. Forecasting uses information from the past and present to identify expected future conditions. Projections for the future are, of course, subject to error. Changes in the conditions on which the projections are based might even completely invalidate them, which is the chance forecasters take. Usually, though, experienced people are able to forecast with enough accuracy to benefit organizational long-range planning.
Approaches to forecasting human resources range from a manager’s best guess to a rigorous and complex computer simulation. Simple assumptions may be sufficient in certain instances, but complex models may be necessary for others.
It is beyond the scope of this text to discuss in detail the numerous methods of forecasting available, but a few of the more prominent ones will be highlighted.
Despite the availability of sophisticated mathematical models and techniques, forecasting is still a combination of quantitative method and subjective judg- ment. The facts must be evaluated and weighed by knowledgeable individuals, such as managers and HR experts, who use the mathematical models as a tool rather than relying on them blindly.
Forecasting Periods HR forecasting should be done over three planning periods: short range, intermediate, and long range. The most commonly used planning period is short range, usually a period of six months to one year. This level of planning is routine in many organizations because very few assumptions about the future are necessary for such short-range plans. These short-range forecasts offer the best estimates of the immediate HR needs of an organization. Intermediate and long-range forecasting are much more difficult processes. Intermediate plans usually project one to five years into the future, and long-range plans extend beyond five years.

Forecasting the Need for Human Resources (Demand)
The main emphasis in HR forecasting to date has been on forecasting organizational need for human resources, or HR demand. Forecasts of demand may be either judgmental or mathematical . Even when mathematical methods are used, human judgments are also needed to confirm the conclusion of the mathematical models.
The demand for employees can be calculated on an organization-wide basis and/or calculated based on the needs of individual units in the organization. For example, to forecast that the firm needs 125 new employees next year might mean less than to forecast that it needs 25 new people in sales and customer service, 45 in production, 20 in accounting, 5 in HR, and 30 in the warehouse. This unit breakdown obviously allows for more consideration of the specific skills needed than the aggregate method does.
Forecasting human resources can be done using two frameworks. One approach considers specific openings that are likely to occur and uses that as the basis
for planning. The openings (or demands) are created when employees leave a
position because of promotions, transfers, and terminations. The analysis always begins with the top positions in the organization, because from those there can be no promotions to a higher level.
Based on this analysis, decision rules (or “fill rates”) are developed for each job or level. For example, a decision rule for a financial institution might state that 50% of branch supervisor openings will be filled through promotions from customer service tellers, 25% through promotions from personal bankers, and 25% from new hires. But forecasters must be aware of chain effects throughout the organization, because as people are promoted, their previous positions become available. Continuing our example, forecasts for the need for customer service tellers and personal bankers would also have to be developed. The overall purpose of this analysis is to develop a forecast of the needs for human resources by number and type for the forecasted period.
Forecasting Availability of Human Resources (Supply)
Once the need for human resources has been forecasted, then their availability must be identified. Forecasting the availability of human resources considers both external and internal supplies. Although the internal supply may be easier to calculate, it is important to calculate the external supply as accurately as possible.
EXTERNAL SUPPLY The external supply of potential employees available to the
organization needs to be estimated. Extensive use of government labor force population estimates, trends in the industry, and many more complex and interrelated factors must be considered. Here are some of the factors that may be considered:
-Net migration into and out of the area
-Individuals entering and leaving the workforce
-Individuals graduating from schools and colleges
-Changing workforce composition and patterns
-Economic forecasts for the next few years
-Technological developments and shifts
-Actions of competing employers
-Government regulations and pressures
-Factors affecting persons entering and leaving the workforce
Estimating internal supply considers that employees move from their current jobs into others through promotions, lateral moves, and terminations. Also, it considers that the internal supply is influenced by training and development programs, transfer and promotion policies, and retirement policies, among other factors. Internally, succession analysis is one method used to forecast the supply of people for certain positions. It relies on replacement charts,which are succession plans developed to identify potential personnel changes, select backup candidates, promote individuals, and keep track of attribution (resignations, retirements) for each department in an organization.
A transition matrix, or Markov matrix, can be used to model the internal flow of human resources. These matrices simply show as probabilities the average rate of historical movement from one job to another.
For a line worker, for example, there is a 20% probability of being gone in 12 months, a 0% probability of promotion to manager, a 15% probability of promotion to supervisor, and a 65% probability of being a line worker this time next year. Such transition matrices form the bases for computer simulations of the internal flow of people through a large organization over time.
COMPILING THE HR PLAN With all the data collected and forecasts done, an organization has the information it needs to develop an HR plan. Such a plan can be extremely sophisticated or rather rudimentary. Regardless of its degree of complexity, the ultimate purpose of the plan is to enable managers in the organization to match the available supply of labor with the forecasted demands in light of the strategies of the firm. If the necessary skill level does not exist in the present workforce, employees may need to be trained in the new skill, or outside recruiting may need to be undertaken. Likewise, if the plan reveals that the firm employs too many people for its needs, a human resource surplus exists.
Human resources forecasting involves projecting labor needs and the effects they’ll have on a business. An HR department forecasts both short- and long-term staffing needs based on projected sales, office growth, attrition and other factors that affect a company’s need for labor. In addition to forecasting the number and type of workers you’ll need, HR planning includes analyzing the various costs and administrative work that go along with adding workers or downsizing.
Organization Chart
One of the most basic forecasting tasks for a human resources manager is the creation and maintenance of a company’s organization chart. If your business uses a flat organizational structure consisting of a few key employees who work directly with you, it’s a good idea to create a chart that shows how your company will be organized a year or two down the road. You might begin adding departments, such as accounting, marketing, sales and human resources, each of which requires a department head and multiple employees. An organization chart helps you hire proactively and avoid ending up with employees who don’t fit in to your future organization.
Production and Scheduling
If you make a product, your labor needs change as sales rise and fall. Your human resources manager should keep in close touch with your sales manager to be aware of any spikes or declines in sales that affect your labor needs. This prevents falling behind on order fulfillment or paying idle workers. A simple example of labor forecasting is a restaurant that has nights with many bookings and large parties and other nights when few diners make reservations. The manager forecasts the restaurant’s wait staff, bar and kitchen needs. At a factory, the sales, production and human resources managers work together to address seasonal spikes, large orders or the loss of a major customer or retailer.
Human resources forecasting helps you avoid long-term holes in your staffing needs by keeping on top of which of your employees might be retiring, leaving or asked to leave. Using this information, your HR manager plans to fill these holes with internal staff or prepares for a quick recruiting effort. As you receive the results of your staff forecasting, prepare your coordinators to move up to manager positions one day and your managers to make the move to directors, if possible. Lower-level staff can’t fill some positions because they require specific degrees or certifications, but some positions might best be filled by internal employees. Add employee training to your human resources efforts to prepare key staff to rise within the organization as staff members need to be replaced.
In addition to forecasting labor needs, human resources forecasting helps you plan budgets based on your future staffing levels. For example, demand forecasting might show a need for more seasonal workers. An HR review might determine the best way to handle this is with part-time workers or paying overtime to current employees. If your labor needs won’t change next year, you might still have increased employee costs based on annual raises and benefits increases. Your HR manager forecasts your personnel costs each year to help with your budgeting.

HR Demand Forecasting

Human Resource Planning
Human Resource Planning
•   Objective and Benefits of HRP
•   Human Resource Planning at Different Levels
•   HRP Process
•   HR Demand Forecasting
•   HR Supply Forecasting
o   Succession Analysis
o   Markov Analysis

Forecasting human resource demand is the process of estimating the future human resource requirement of right quality and right number. As discussed earlier, potential human resource requirement is to be estimated keeping in view the organisation's plans over a given period of time. Analysis of employment trends; replacement needs of employees due to death, resignations, retirement termination; productivity of employees; growth and expansion of organisation; absenteeism and labour turnover are the relevant factors for human resourced forecasting. Demand forecasting is affected by a number of external and internal factors.

Job analysis and forecasting about the quality of potential human resource facilitates demand forecasting. So, existing job design must be thoroughly evaluated taking into consideration the future capabilities of the present employees.


Human Resource Demand Forecasting depends on several factors, some of which are given below.
•   Employment trends;
•   Replacement needs;
•   Productivity;
•   Absenteeism; and
•   Expansion and growth.
There are number of techniques of estimating/forecasting human resources demand:

(a) Managerial Judgement
(b) Work Study Technique
(c) Ratio-trend Analysis (d) Econometric Models
(e) Delphi Model
(f) Other Techniques

(a) Managerial Judgement: Managerial judgement technique is very common technique of demand forecasting. This approach is applied by small as well as large scale organisations. This technique involves two types of approaches i.e. 'bottom-up approach' and 'top-down approach'. Under the 'bottom-up approach', line mangers send their departmental requirement of human resources to top management. Top management ultimately forecasts the human resource requirement for the overall organisation on the basis of proposals of departmental heads. Under the Top-down approach', top management forecasts the human resource requirement for the entire organisation and various departments. This information is supplied to various departmental heads for their review and approval. However, a combination of both the approaches i.e. 'Participative Approach' should be applied for demand forecasting. Under this approach, top management and departmental heads meet and decide about the future human resource requirement. So, demand of human resources can be forecasted with unanimity under this approach.

(b) Work-Study Technique: This technique is also known as 'work-load analysis'. This technique is suitable where the estimated work-load is easily measureable. Under this method, estimated total production and activities for a specific future period are predicted. This information is translated into number of man-hours required to produce per units taking into consideration the capability of the workforce. Past-experience of the management can help in translating the work-loads into number of man-hours required. Thus, demand of human resources is forecasted on the basis of estimated total production and contribution of each employee in producing each unit items. The following example gives clear idea about this technique.

Let us assume that the estimated production of an organisation is 3.00.000 units. The standard man-hours required to produce each unit are 2 hours. The past experiences show that the work ability of each employee in man-hours is 1500 hours per annum. The work-load and demand of human resources can be calculated as under:

•   Estimated total annual production = 300000 units
•   Standard man-hours needed to produce each unit = 2 hrs
•   Estimated man-hours needed to meet estimated annual production (i x ii) = 600000 hrs
•   Work ability/contribution per employee in terms of man-hour = 1500 units
•    Estimated no. of workers needed (iii / iv) = 600000/1500 = 400 units
The above example clearly shows that 400 workers are needed for the year. Further, absenteeism rate, rate of labour turnover, resignations, deaths, machine break-down, strikes, power-failure etc. should also be taken into consideration while estimating future demand of human resources/ manpower.

(c) Ratio-Trend Analysis: Demand for manpower/human resources is also estimated on the basis of ratio of production level and number of workers available. This ratio will be used to estimate demand of human resources. The following example will help in clearly understanding this technique.

Estimated production for next year = 1,40,000 units
Estimated no. of workers needed
(on the basis of ratio-trend of 1: 200) will be = 700

(d) Econometrics Models: These models are based on mathematical and statistical techniques for estimating future demand. Under these models relationship is established between the dependent variable to be predicted (e.g. manpower/human resources) and the independent variables (e.g., sales, total production, work-load, etc.). Using these models, estimated demand of human resources can be predicted.

(e) Delphi Technique: Delphi technique is also very important technique used for estimating demand of human resources. This technique takes into consideration human resources requirements given by a group of experts i.e. mangers. The human resource experts collect the manpower needs, summarises the various responses and prepare a report. This process is continued until all experts agree on estimated human resources requirement.

(f) Other Techniques: The other techniques of Human Resources demand forecasting are specified as under:

(a) Following the techniques of demand forecasting of human resources used by other similar organisations
(b) Organisation-cum-succession-charts
(c) Estimation based on techniques of production
(d) Estimates based on historical records
(e) Statistical techniques e.g. co-relation and regression analysis.

HR Supply Forecasting
Human Resource Planning
Human Resource Planning
•   Objective and Benefits of HRP
•   Human Resource Planning at Different Levels
•   HRP Process
•   HR Demand Forecasting
•   HR Supply Forecasting
o   Succession Analysis
o   Markov Analysis

Human Resource supply forecasting is the process of estimating availability of human resource followed after demand for testing of human resource. For forecasting supply of human resource we need to consider internal and external supply. Internal supply of human resource available by way of transfers, promotions, retired employees & recall of laid-off employees, etc. Source of external supply of human resource is availability of labour force in the market and new recruitment.

external supply of human resource depends on some factors mentioned below.
•   Supply and demand of jobs.
•   literacy rate of nation.
•   rate of population
•   industry and expected growth rate and levels
•   technological development.
•   compensation system based on education, experience, skill and age.
The most important techniques for forecasting of human resource supply are Succession analysis and Markov analysis.

succession analysis

Once a company has forecast the demand for labour, it needs an indication of the firm's labour supply. Determining the internal labour supply calls for a detailed analysis of how many people are currently in various job categories or have specific skills within the organization. The planner then modifies this analysis to reflect changes expected in the near future as a result of retirements, promotions, transfers, voluntary turnover, and terminations.

Demand forecasting helps in determining the number and type of personnel/human resources required in future. The next step in human resource planning is forecasting supply of human resources. The purpose of supply forecasting is to determine the size and quality of present and potential human resources available from within and outside the organisation to meet the future demand of human resources. Supply forecast is the estimate of the number and kind of potential personnel that could be available to the organisation.

Estimating Internal Labor Supply for a Given Unit

The above figure illustrates that internal supply forecasting can be estimated based on the following:
(a) Current Staffing Level
(b) Projected Outflows This Year
(c) Projected Inflows This Year


Markov Analysis—transition probability matrix is developed to determine the probabilities of job incumbents remaining in their jobs for the forecasting period.

The technique is named after Russian mathematician Andrei Andreyevich Markov,

A transition matrix, or Markov matrix, can be used to model the internal flow of human resources. These matrices simply show as probabilities the average rate of historical movement from one job to another. Figure 2-12 presents a very simple transition matrix. For a line worker, for example, there is a 20% probability of being gone in 12 months, a 0% probability of promotion to manager, a 15% probability of promotion to supervisor, and a 65% probability of being a line worker this time next year. Such transition matrices form the bases for computer simulations of the internal flow of people through a large organization over time.

you are familiar with. Discuss the employee turnover analysis. Describe the different techniques for supply management  

Discuss the employee turnover analysis.
The employee turnover rate indicates the rate at which your business hires and fires employees. A low employee turnover rate suggests that you have a good work environment that allows you to retain your employees. A high employee turnover rate not only signifies possible problems in the office, but may also cost your business financially. This is because you have to spend more on advertising job vacancies, interviewing candidates and training new employees.
Step 1
Check your company's human resources records to find the number of employees your business has at the end of a period of time. Also determine the number of employees the company lets go over the same period of time.
Step 2
Divide the number of employees terminated by the number of employees at the end of the period to obtain the employee turnover rate. Multiply this figure by 100 to express it as a percentage. For example, assume your company has fired 50 employees over the year and employs 300 staff members at the end of the year. The company's employee turnover rate would be 16.67 percent ([50/300] X 100).
Step 3
Compare your employee turnover rate with the national average employee turnover rate. For example, the Missouri Small Business and Technology Development Centers reports the national average rate to be 14.4 percent per year. Compared to the national average, therefore, 16.67 percent is a slightly high turnover rate.
Step 4
Compare your company's employee turnover rate with the average rate in your industry or your area. Various industries have different average employee turnover rates. As such, you may have a normal level of employee turnover even if it seems high when compared to the national average. For example, the hospitality industry may have a higher employee turnover rate, especially in areas where tourism activities are seasonal.
•   For a more accurate analysis, you may choose to calculate a separate employee turnover rate for the various categories of employees. Divide your employees into high performers, average performers and poor performers. Focus on minimizing the turnover rate amongst the high performers and maximizing the turnover rate amongst the poor performers because retaining them may cost you money.
Industry Variations
Turnover can vary greatly from industry to industry. For example, turnover in the fast-food industry can be as high as 50 to 75 percent, and fast-food restaurants may build high turnover into their cost calculations. The U.S. Bureau of Labor Statistics reports that average yearly turnover in all industries is close to 32 percent. Public sector organizations are also affected by turnover. For example, a study by the National Commission on Teaching and America's Future found that the national teacher turnover rate, as of 2008, was almost 17 percent. High teacher turnover causes schools to spend scarce resources on finding and training new teachers and can reduce the effectiveness of the school.
Factors Affecting Turnover
High turnover tends to occur in jobs where employees view themselves as undervalued. Low pay is one factor, but turnover also increases when employees feel they are not treated with respect and where there is a lack of teamwork, or where management is viewed as arbitrary and overly demanding. A lack of flexible work scheduling can also cause employees with families, especially women, to leave a job. Turnover can also increase when there is a change to the corporate structure, such as a merger or a major organizational restructuring. Jobs where there are high levels of stress or injury, such as police officer, child-care worker and construction worker, may also have higher level of turnover.
Costs of Turnover
Costs associated with employee turnover include covering the vacancy, advertising the position and training new hires. The loss of experienced employees can also lead to a "brain drain," which can make your company less competitive. In addition to these obvious costs, there are hidden costs of employee turnover. These include stress on existing staff who have to cover the position, lower productivity and reduced customer service. In offices with high employee turnover, staff morale may be low, as employees view the business as a career dead end or a depressing place to work, and this can also affect productivity.
Reducing Employee Turnover
If your business has a high rate of employee turnover, consult staff to find out what they makes them unhappy. Train management to deal appropriately with staff grievances and discipline. Consider incentive programs, such as productivity bonuses or offering employee stock options. Providing more flexible work hours and conditions may also prevent staff, particularly those with young children, from leaving.

Describe the different techniques for HR supply management  

Forecast Human Resource Supply
Human resource planner must consider both the external supply (employees available for hire in the organization’s geographic workforce) and the internal supply (the organization’s current employees) of personnel.
External supplies of personnel are important for two reasons. First, the normal attrition of employees through voluntary turnover, retirement, illness, death, and discharge may require the organization to look to employment agencies, colleges and universities, and other sources to replenish lost personnel. Second, organizational growth and diversification creates the need to use external sources to obtain additional numbers and types of employees.
The internal supply of personnel is influenced by changes that occur to employees over a period of time as the result of training and development programs, promotion policies, and job-related experiences that contribute to the shifting of personnel within the firm.
It is important for human resource planners to anticipate and pinpoint changes in personnel supply. Various methods are available for doing this. A relatively straightforward method is presented in Figure 3-1.

Although human resource planning is concerned with the having an adequate number of employees to fill positions within the organization, it is equally concerned with providing the right type of person for the job.
Another point must be mentioned is Human Resource Information Systems (HRIS). It provides a means of collecting, summarizing and analyzing data germane to human resource management. Information requirements associated with the personnel function are numerous. And personnel reporting requirements of governmental legislation can be time-consuming, expensive, and cumbersome endeavors without an HRIS.
Specific uses of an HRIS in assessing personnel supply include the following:
a.        Examining the capability of current employees to fill projected vacancies within the organization.
b.        Pinpointing positions whose incumbents are expected to be promoted, retired, or laid off.
c.        Delineating specific jobs or job classes that have unusually high rates of turnover, discharge, absenteeism, and performance or discipline problems.
d.        Examining the age, racial, and sexual composition of various jobs.
e.        Anticipating recruitment, selection, training, and development needs to ensure the timely placement of qualified persons in job vacancies.
C.     Reconciliation of Human Resource Supply and Demand
Reconciling supply and demand is largely a matter of planning, timing, and use of various personnel-related programs to achieve the desired results.

Succession Planning
Succession and replacement planning involves preparing specific candidates (current employees) to eventually succeed present job incumbents who expect to leave or be transferred, promoted, or retired in the near future. The key to succession planning is to develop an accurate profile of the requirements needed to fill the job (using job analysis information), select a candidate who appears to meet the requirements of the job or who has the potential to become qualified for the job, and take specific steps to prepare the candidate to fill the anticipated vacancy through training and development programs. Figure 2-3 illustrates a management replacement chart.
Management Development Programs
In order to ensure that current employees have the special skills necessary to assume managerial positions in the future, organizations have created programs to develop such skills. These management development programs take advantage of a variety of training opportunities, both internal and external to the company.
Internal Recruitment and Staffing
Organizations may wish to fill vacancies with current employees. Often a company will allow any current employees to apply for a job opening elsewhere in the firm. These openings are advertised within the organization and may be applied for by any employee who feels qualified.
External Recruitment and Staffing
Predicted human resource shortages can be filled by recruiting people from outside the firm to apply and take positions within the company. Typically this allows the firm to take advantage of large numbers of applicants in order to select the most well qualified.
Promotion Policies
Promotions typically create an opening at a lower level as the employee moves up to the higher position. The qualified employees may be located through internal recruitment or selected from a list of those considered ready by the company. Management development and skill training programs can be coordinated with promotion policies to ensure that employees are prepared for promotion.
Layoffs, Alternative Work Schedules, and Recruitment Policies
Layoff, retirement policies, and the use of alternative work schedules all represent potential means of reconciling personnel supply and demand.
Layoff and retirement policies are typically used to reduce the number of employees.
Alternative work schedules (flexitime, a 4-day, 40-hour week, part time work, overtime, shortened workweeks) can increase the flexibility of the organization to meet temporary shifts in personnel needs. Overtime can help the company avoid hiring additional employees, shortened workweeks part time work, and other work schedules can help the company avoid layoffs.
Skill Training Programs
Human demand and supply can be balanced by using skill training programs to prepare employees to perform certain tasks or jobs. The use of it may partially or totally eliminate the need to recruit new employees from outside.
Possible advantages of training current employees to fill new and more rewarding vacancies include improved morale, reduced uncertainty regarding employee reliability and performance, reduced turnover, and lower recruitment cost.
Temporary Workers, Contract Workers, and Employee Leasing
The methods discussed previously all deal with individuals holding more or less permanent positions with the company. There are alternative methods of reconciling personnel supply and demand using individuals with only a temporary relationship with the firm. During periods of high product or service demand, some organizations use temporary employees, the X-mas season is an example.
Contract workers are used when special skills are needed on a limited basis or limited amount of time.
Employee leasing is a relatively new human resource planning activity. Rather than hire workers itself, a firm leases employees from a leasing company. The leasing company is responsible for hiring, record keeping, disciplining, paying and terminating the employees. The company signs a lease for a specific period of time, requiring the leasing firm to provide workers and perform most personnel support activities for them. This allows the firm to reduce its personnel support staff and avoid the many reporting responsibilities that accompany the hiring or termination.
3.3  Summary and Conclusion
In this part we discuss the following aspects of human resource planning.
         What is Human Resource Planning
         The process of human resource planning includes the forecasting of the demand and supply
         The techniques to forecast human resource
         The methods to reconcile personnel demand and supply
Effective human resource planning systematically predicts human resource needs and ensures that the necessary adjustments in recruitment, selection, training, and other personnel functions are made.

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Leo Lingham


management consulting process, management consulting career, management development, human resource planning and development, strategic planning in human resources, marketing, careers in management, product management etc


18 years working managerial experience covering business planning, strategic planning, corporate planning, management service, organization development, marketing, sales management etc


24 years in management consulting which includes business planning, strategic planning, marketing , product management,
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