Step 2a: Define Your Overall Staffing Model Process

To define staffing strategies and plans for each staffing issue, you will need to develop a staffing model that includes a definition of staffing requirements (in terms of both skills and staffing levels), a projection of staff availability, and the calculation of specific gaps and surpluses for each of your planning periods. At the core of the strategic staffing process is a fairly traditional quantitative model that defines required staffing levels (demand), identifies available staffing (supply), and calculates the gaps between supply and demand (net needs). Figure 5-2 shows this process at its simplest.

The simple (and often used) process shown in Figure 5-2 is rarely appropriate. It applies only when there are no changes in available staffing between “now” (whenever current staff availability was determined) and “then” (that point in the future for which demand has been calculated). In most companies, many actions that affect staff availability will occur between now and then (especially when you consider that my broad definition of staffing includes all movement into, around, and out of an organization). People will leave the organization through turnover, through retirement, and for other reasons. Those who stay may change jobs, be promoted, or be redeployed. New people may join the organization. There is simply no way to account for these actions in the simplistic model described in Figure 5-2, so a different version of the model is necessary.

A better process for defining staffing gaps and surpluses is one in which you first define how many people you have now, then use that information as a foundation for projecting the number and types of people you think will be available at the point for which requirements have been defined. To do this, you need to make assumptions regarding the losses, additions, and movement that you think will occur between “now” and “then.” By using this technique, you can compare supply and demand at the same point in time and get a meaningful estimation of staffing gaps and surpluses. Figure 5-3 shows what this process looks like.

You will still start by determining future requirements (both required skills and required staffing levels) at a particular point in time (“demand then”), but in this version of the process, the supply side has two steps. Once you have determined demand, you then define the current staffing levels and capabilities, just as you did in the traditional approach depicted in Figure 5-2. What follows is different, however. Next, you make specific assumptions about the staffing actions that you think are likely to occur between now and then. Make your “best-guess” assumptions about the number of people you think will make any kind of staffing move (e.g., leave voluntarily, retire, be promoted, be redeployed, or be hired). Once you have made (and documented) these staffing assumptions, you apply them to the current population to see what staff will be available if all these staffing actions actually take place. Take the following steps:

• Subtract from your current population the number of people you think will leave each job category (e.g., through voluntary turnover, retirements, and other planned losses).
  
  
• Add in the number of people that will be hired into each job (or added from sources not included in your model).
  
  
• Account for promotions and other movement (e.g., redeployment) by subtracting that number of people from the jobs they are leaving and adding them to the jobs they will be entering.
  
  

Chapter 9 includes a specific example of what these calculations might look like. Once you have applied all your assumptions, you will end up with a “snapshot” or forecast of the numbers and types of employees that will be available at that point in the future (“supply then”), given that all the staffing actions you assumed really do take place.

Now compare “supply then” to “demand then” and calculate staffing gaps and surpluses. Finally, define the staffing actions needed to eliminate these gaps and surpluses. This process usually entails a revision of the staffing assumptions you made initially. For example, if you assumed that some hiring would take place, but there are still some gaps, you may need to hire even more people. Alternatively, you may need to promote or redeploy additional people to meet that need. Conversely, there may be surpluses in jobs where the number of people you assumed would be hired or promoted was greater than the number actually needed. In these cases, you might need to reduce the number of people you assumed would be hired or promoted. In other cases where there are surpluses, you may need to assume that more people will leave than you projected in the first place (e.g., through layoffs or early retirement). In the end, your objective is to create a set of staffing assumptions (actions) that most effectively matches supply and demand.

While this approach is certainly better than the first one (because it factors in the staffing changes that will occur between now and then), it too can be improved. The problem with this version is that it is iterative in nature: You make assumptions regarding the staffing actions that are needed and then test those assumptions to see if in fact the staffing gaps and surpluses are eliminated. If they are, you have arrived at a good solution. If, however, there are still differences between supply and demand (a scenario that is quite likely), you must revise your staffing action assumptions and recalculate the gaps and surpluses. It may be necessary to repeat this process (perhaps many times) until an acceptable solution is reached. Thinking of it another way, the staffing “assumptions” that you make when using this particular approach are often just guesses. You guess at a solution, try it, and if it is not correct, you guess again—and just keep guessing until you arrive at an acceptable solution. For example, you may not know the actual number of people that need to be promoted from one job to another, so you guess at that number (calling it an assumption, of course), plug in your guess, and see if you were right. If you weren’t, you need to revise your promotion assumptions (in fact, guessing again) until you get supply to equal demand. While you will eventually arrive at the right answer, the process is very iterative and is not very efficient.

By making a relatively small change in our model, we can largely eliminate the guesswork. The difference lies in the nature of the assumptions that are made. This third, “best” version begins the same way as the second version (see Figure 5-4). With this approach, you start by defining “demand then” and “supply now,” just as you would have done in the previous processes. This time, however, you make assumptions only about the staffing actions that you really can’t control—that is to say, those staffing actions that are likely even if you do nothing. You might wish to think of these actions as those that will happen no matter what you do. Usually, these “uncontrollable” actions include:

• Voluntary turnover

• Normal retirements

• Seniority- or tenure-based promotions

• Completion of hiring plans that are already in motion (e.g., openings that will be filled during the period by candidates who have accepted offers but have not yet started work)

• Returns or losses resulting from planned leaves of absence (e.g., because of military service or health-related issues)

Create your first version of “supply then” by considering only uncontrollable actions like these. At this point, specifically do not make any assumptions regarding other staffing actions. Compare this preliminary “supply then” to “demand then” to determine the preliminary gaps and surpluses that result.

Now you can begin to define the “controllable” staffing actions that you will take to eliminate these gaps and surpluses. Consider at this point all of the various types of staffing actions that you can choose to implement in order to eliminate the preliminary gaps and surpluses you just identified. Controllable staffing actions are all those that happen because you make them happen—they would not happen otherwise. Controllable staffing actions include virtually all:

• Hiring

• Promotions

• Transfers and redeployments

• Planned staff reductions

• Use of temporary or contingent staff

• Use of overtime

• Planned losses

Each of these staffing actions is a specific move that is made in an intentional way to meet a particular need that has been identified. The advantage of this approach is that it completely eliminates the guesswork (and thus all the iterations) that is part of the second approach described previously. For example, rather than guessing how many promotions to a particular job will be needed, first determine the number of openings that will be created as a result of uncontrollable actions and then decide how many of those openings can and should be filled through promotion. Similarly, don’t estimate the number of new hires at first. Instead, use this technique to figure out how many openings are expected, then determine how many of those openings can and should be filled with new hires. In fact, this technique allows you to identify talent surpluses from which employees might be redeployed, eliminating the need for some hiring or promotion. With this process, there is no need to guess, test, and guess again until you arrive at an acceptable solution. Instead, you get that solution in a single iteration. All these controllable staffing actions form the basis of your near-term staffing plans and thus should be carefully documented. Table 5-1 includes a list of typical controllable and uncontrollable staffing actions.

Table 5-1. Examples of Uncontrollable and Controllable Staffing Actions.

Staffing Action	Uncontrollable	Controllable
Recruiting	Positions for which candidates have accepted offers but are not yet working Positions for which candidates are being actively considered and the openings will be filled in the planning period	Any opening for which specific candidates have not been identified Openings that have been “approved” but for which no candidate will be placed Most openings that are to be filled by implementing the staffing plans you are preparing
Promotions, transfers, and other internal movement	“Lock step” promotions (e.g., those defined by labor agreements) Seniority- or tenure-based promotions that are not at the discretion of management Any move where an employee has been selected but not yet placed (assuming that the placement occurs during the planning period in question)	Any opening for which specific candidates have not been identified Most openings that are to be filled by implementing the staffing plans you are preparing
Losses	Voluntary turnover Normal retirement Temporary/contingent staff whose contracts will expire during the planning period	Early retirement programs Termination for cause Layoffs or reductions in force Temporary/contingent staff whose contracts will be terminated prematurely

In summary, it is typically most effective to adopt an overall approach to strategic staffing that takes into account the staffing actions that are anticipated between the current time and that point in the future for which demand has been calculated. The efficiency of the process can be improved (and the guesswork eliminated) by first considering the uncontrollable staffing actions and then determining the mix of controllable staffing actions needed to eliminate the resulting gaps and surpluses.