The Big Book of HR, 10th Anniversary Edition

By Barbara Mitchell and Cornelia Gamlem

2023 First Place winner for Adult General Nonfiction from the National Federation of Press Women

Finalist, Career Book Category, 2022 Next Generation Indie Book Awards.

The complete guide to human resources processes, issues, and best practices by two of the most seasoned and respected HR professionals.

Managing people is the biggest challenge any organization faces. It’s a challenge that has grown even more difficult over the past decade. Since The Big Book of HR was first published, we’ve seen dramatic changes in the workplace and the workforce. This 10th anniversary edition incorporates discussions and reflections on these changes and examines new and emerging trends useful for any business owner, manager, or HR professional, with the most current information to get the most from their talent—from strategic HR-related issues to the smallest tactical details of managing people.

The Big Book of HR, 10th Anniversary Edition includes up-to-date information about:

• The challenges of remote and distributed workforces
• Diversity, equity and inclusion
• Workplace harassment and its prevention
• Changing technology and its impact on every facet of people management
• Pay equity and its effect on transparency in compensation
• Benefits that meet the needs of a multigenerational workforce
• State and local laws that are addressing societal changes
• Gamification and other training strategies

• Language: English
• Publisher: Career Press
• Release date: Jan 1, 2022
• ISBN: 9781632657411

Barbara Mitchell

Barbara Mitchell is an author, speaker, and human resources consultant. She is the coauthor of The Big Book of HR, The Essential Workplace Conflict Handbook, The Conflict Resolution Phrase Book, and The Essential HR Handbook. Most of her HR career was spent with Marriott International. Barbara is managing partner of The Mitchell Group and an innovative career transition coach.

Book preview

Praise for The Big Book of HR

I am pleased to see such a robust resource that will help guide human resource professionals in their human capital investment. This book provides a human capital framework for areas in selecting and retaining top talent, employee engagement programs, and total rewards. These types of programs will help drive the strategy and mission of the organization, lead to a highly engaged/committed workforce, and significantly improve overall performance and profitability.

—Angela Galyean, vice president for human resources, Intelsat

In this comprehensive book, the authors provide readers with a wealth of information, stories, resources, and discussion questions to guide you through the wonderful world of human resources. Mitchell and Gamlem are respected experts in HR and have generously shared their knowledge and experiences in this valuable new book.

—Sharon Armstrong, author of The Essential Performance Review Handbook, The Essential HR Handbook, and Stress-Free Performance Appraisals

"To attain wisdom you must first learn the language of your audience. Next you must walk in their shoes, cut down a few trees in the forest, and blaze a new trail on your own. Finally, you need to simplify and just know where that 5¢ washer needs to go to keep the Rube Goldberg contraption running well. The Big Book of HR, like it's two authors, rises to and even transcends all three levels."

—Gerry Crispin, SPHR, cofounder, CareerXroads

"I am excited about this new edition of The Big Book of HR—a comprehensive HR management guidebook. Offering practical and useful tips to put knowledge into practice, this is a ‘must-have' for managers of all levels. I'm recommending it for use in my organization."

—Judy Perrault, CEO, Mindbank

"The Big Book of HR is a great HR reference book that covers virtually all areas of the human resources field—a one source of relevant information. The chapters include everything from the legal aspects of the employment relationship to the core function of HR, which is attracting and developing talent for the organization. It is a practical guide that is easy to follow and provides solid recommendations on how to lead an HR organization for the benefit of the enterprise it supports. If I could only have one HR book on my shelf, this would be the one.

—Gus Siekierka, vice president and chief HR officer, CSC (retired)

"HR Professionals: buy it, read it, rely on it, and you will never regret it! Although there are lots of books on HR, The Big Book of HR is the best guide for an HR practitioner out there. Regardless of whether you are new to the profession or tenured, The Big Book of HR will become a reference companion to your daily work. Throughout the book, it is extremely clear that Mitchell and Gamlem are seasoned professionals in the industry. Their ability to break down the concepts and apply them to situations an HR professional will come across daily ensures that this book will be well-worn and dog-eared. I was very impressed by the way they conveyed ‘insights' or ‘things to be aware of ' that most practitioners only learn through trial and error. I wish I had this book when I was starting out! The book also allows you to lean on leaders in the HR profession as if they are sitting at the desk beside you."

—Sarah Rajtick, senior vice president of human resources,

American Truckers Associations

"The Big Book of HR is both a great reference book and a training tool. I would recommend this as a ‘must-have' for HR professionals. For those who are developing talent, this is an excellent tool to test knowledge and teach core competencies."

—Janet N. Parker, executive vice president for corporate HR, Regions Bank (retired)

Other Books by These Authors

Barbara Mitchell and Cornelia Gamlem:

The Essential Workplace Conflict Handbook

The Conflict Resolution Phrase Book

The Manager's Answer Book

They Did What? Unbelievable Tales from the Workplace

Barbara Mitchell and Sharon Armstrong:

The Essential HR Handbook

If you enjoy this book or enjoyed any of our other books, we would be honored if you'd post a great review on Amazon or Goodreads. Mention something that you really liked about the book(s) and why. The most impactful reviews are short and succinct.

To all of the HR professionals and leaders who

stepped up in 2020 during the pandemic

and brought the profession to great heights.

This edition first published in 2022 by Career Press, an imprint of

Red Wheel/Weiser, LLC

With offices at:

65 Parker Street, Suite 7

Newburyport, MA 01950

www.careerpress.com

www.redwheelweiser.com

Copyright © 2022 by Barbara Mitchell and Cornelia Gamlem

All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without permission in writing from Red Wheel/Weiser, LLC. Reviewers may quote brief passages. Previously published in 2017

by Career Press, ISBN 978-1-63265-089-4

ISBN: 978-1-63265-194-5

Library of Congress Cataloging-in-Publication Data available upon request.

Typeset in Minion Pro

Printed in the United States of America

DR

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www.redwheelweiser.com/newsletter

Disclaimer: The Big Book of HR is published only as an informational guide. Readers should keep in mind that although it is designed to provide accurate and current information on employment law compliance issues as of the date of publication, the information contained herein is general in nature and is not intended to be relied upon as legal advice. Laws and regulations are not static, and they frequently change. Neither the information in this book, nor any information found on the internet, should be a substitute for legal advice. The resolution of each circumstance encountered by readers should ultimately be determined on a case-by-case basis, depending upon the particular facts, and legal counsel should be sought as appropriate.

Acknowledgments

During our journey in writing this book, we had many friends who helped us to bring it to completion.

We can never express enough gratitude to some special contributors: Susan Devereaux, who edited and formatted the manuscript for us. Susan's insights and great questions helped us write what we hope is a highly readable book. Our valued colleague and friend Jennifer Whitcomb, who wrote the coaching chapter for us.

Thanks to our literary agent and friend, Marilyn Allen, of the Allen O'Shea Agency for her help and advice. You continue to encourage us every step of the way and are always there when we need you.

We cannot forget the booksellers who see the value of our books and display them on the shelves of both brick-and-mortar and virtual stores. We are especially grateful to Cal Hunter who gave this book wonderful exposure by putting it in the window of Barnes & Noble on Fifth Avenue in New York, NY.

Erik Gamlem has kept our social media efforts on track, always assuring that our blogs and tweets are posted and that all of our platforms, especially LinkedIn, are up to date.

Shout out to Michael Pye, associate publisher at Career Press, an imprint of Red Wheel/Weiser, for his continued support and confidence in us since we wrote the first edition of The Big Book of HR.

A special thanks to our families for unconditional love and support always.

Finally, we want to thank and acknowledge you, our readers. Leaders cannot lead without followers. Authors cannot write without readers.

Contents

Introduction

Chapter 1: Introduction to HR

Chapter 2: HR and Technology

Section 1: Talent Acquisition

Chapter 3: Workforce Planning . . . Succession Planning

Chapter 4: The Legal Landscape of Employee Rights

Chapter 5: Job Analysis and Descriptions

Chapter 6: Strategic Recruitment

Chapter 7: Interviewing and Hiring

Chapter 8: Employee Onboarding

Section 2: The Employee Experience

Chapter 9: Employee Engagement

Chapter 10: Employee Retention

Chapter 11: Flexibility and Work

Chapter 12: Employee Rewards and Recognition

Section 3: Total Rewards

Chapter 13: The Legal Landscape of Compensation

Chapter 14: Compensation: An Introduction

Chapter 15: Developing a Salary Structure

Chapter 16: The Legal Landscape of Employee Benefits

Chapter 17: Employee Benefits

Section 4: Employee Development

Chapter 18: Promotions and Other Internal Movements

Chapter 19: Assessing Employee Development Needs

Chapter 20: Best Approaches to Developing Employees

Chapter 21: Coaching as an Employee Development Strategy

Chapter 22: Performance Management

Section 5: Employee Relations

Chapter 23: Employee and Labor Relations

Chapter 24: Workplace Harassment

Chapter 25: Diversity, Equity, and Inclusion

Chapter 26: Risk Management

Chapter 27: Ending the Employment Relationship

Conclusion: Emerging Trends and Challenges

Appendix: Additional Resources

Notes

Bibliography

Index

INTRODUCTION

1

Introduction to HR

HR—human resources—is the function actively involved in setting strategy around the people who do the work that moves organizations toward the achievement of their missions, visions, and goals. HR professionals and executives are advisors to leadership who develop strategic workforce plans that link to the organization's strategic plan to ensure that the right people are on board so that the firm can meet its objectives. HR partners with line management to provide development opportunities to maximize the potential of each and every employee. HR advises management on total rewards programs (compensation and benefits) and rewards and recognition programs designed to minimize costly employee turnover and to maximize employee engagement and retention.

The year 2020 brought significant changes and challenges to organizations and the HR function. How we work was disrupted by the COVID-19 pandemic, and HR met and led those challenges, many of which are discussed in detail throughout the chapters in this book. During 2020, under the guidance of HR, organizations increased flexibility, mainly by managing remote workers; adjusted benefits; created safe workplaces where remote work was not possible; and implemented productivity and listening tools. Amid the digital transformation that took place, HR led human-centric leadership in their organizations, an approach requiring leaders to listen to their employees and then take time to understand and discuss underlying problems, welcome new approaches, and create growth opportunities for employees. They shined the light on the employee experience and showed that the HR profession is bold, innovative, and noble at its core.¹

It was not by chance that HR leaders did such an exemplary job. They were able to do so because they were business leaders, people who understood the economics of business—how the organization is funded if it is a nonprofit or how it makes money if it is a for-profit organization. They knew how to read and understand a profit and loss statement, create and manage a budget, and understand profit centers. They were versed in marketing, finance, and other operational areas of the business.

If you are just starting your HR career and want to set yourself apart and add value, you can:

Actively participate in discussions around your organization's business objectives.

Ask the right questions to help your organization meet its goals and achieve its mission.

Find a way to do things more efficiently by partnering with other leaders in your organization.

Determine how people and processes contribute to the bottom line.

Communicate effectively to be able to influence other leaders.

Think strategically by anticipating challenges and resolving potential problems.

Lead change initiatives and manage costs related to employees.

Demonstrate your proficiency in all of the HR-related functions covered in this book.

Exhibit trust. In addition to always keeping your word, this includes always providing a feedback loop to employees and managers. Never leave people hanging, even if the feedback is bad news.

Always act in an ethical fashion and protect the organization.

You may be an HR professional just starting out or further along in your career, a manager, or a business owner without HR support who needs to gather information on how to hire, develop, or fire an employee. This book is intended for anyone who works with people and who wants to maximize the impact employees have to ensure the success of the organization.

How to Use This Book

The Big Book of HR has 27 chapters and is organized into five sections. Although there are strong links between HR practices, for the most part, each chapter deals with one topic or one function and is designed to stand alone. Where doing so makes sense, we refer you to other chapters in the book for more information or to the appendix, which is filled with additional resources. In some cases, we refer you to a website for additional information.

Before we begin introducing the functional areas of HR, we discuss HR and technology in Chapter 2. Technology is an overarching function impacting every aspect of human resources.

Section 1: Talent Acquisition (Chapters 3–8)

Section 1 explains how you get started to determine what kinds of employees and what number of employees your organization will need to meet its strategic goals and objectives. We look at the legal issues around the rights of employees before discussing the recruiting process, including where to find candidates, how to interview and select the best applicant, how to make a job offer, and then how to welcome new hires successfully into your organization.

Section 2: The Employee Experience (Chapters 9–12)

Section 2 explores the critical areas of engaging your employees so that they are as productive as possible and then retaining them for your organization. Both of these functions have major impact on your bottom line. This section looks at the role flexibility plays in the retention process and also gives you information on how to craft rewards and recognition programs that will work for your organization.

Section 3: Total Rewards (Chapters 13–17)

Section 3 looks at the legal issues around compensation and benefits, then introduces the basics of compensation and pay systems and ways to ensure pay equity. It leads you through the steps to develop a salary structure and then discusses the increasingly complex but critical area of employee benefits.

Section 4: Employee Development (Chapters 18–22)

Section 4 delves into the critical importance of providing development opportunities for your employees by working through the process of determining your organization's needs. It looks at the many ways to provide development, including training and mentoring, and the positive impact coaching has in your employee development strategy. Finally, it discusses performance management, looking at traditional approaches and the recent focus on feedback.

Section 5: Employee Relations (Chapters 23–27)

Section 5 examines many areas of employee relations—a positive culture and policies, communications, and investigations—and labor relations. It then looks at the special topics of workplace harassment and diversity, equity, and inclusion (DEI) before discussing risk management and ending the employment relationship. Each of these topics has a huge impact in the life cycle of employment.

Appendix: Additional Resources

This section has supplemental information to help your organization manage your human resources processes and maximize productivity.

What's New in the 10th Anniversary Edition

The field of human resources and people management is hardly a static one. So much has changed since the first edition of The Big Book of HR was first published in 2012. Many of those changes are incorporated in this edition and are summarized below. You will be able to spot new information by looking for the following symbol:

Section 1: Talent Acquisition

There is nothing more important than having the right people in the right places to move your organization forward. Since your employment brand is increasingly important in hiring the best talent available, this section is expanded. Anyone who is part of the talent acquisition process should receive training to ensure the brand is maximized. Some new topics that are included are mobile recruiting, performing preemployment assessments, and training managers to interview. Finally, this section includes an expanded discussion about onboarding leaders.

Section 2: The Employee Experience

Since 2012, the ways work is accomplished and where it is accomplished have shifted dramatically. This edition places an increasing emphasis on the employee experience and the importance of creating a culture where employees feel value. The chapter titled Flexibility and Work highlights the changing landscape of working, along with success factors and challenges for working remotely. Chapter 12 disusses emerging issues in employee rewards and recognition, including peer rewards, and use of gamification.

Section 3: Total Rewards

Minimum wage increases, pay inequity, paid leave, and wage transparency are increasing concerns being addressed at the state and local level, as are changes to the Fair Labor Standards Act made by the Department of Labor. Guidance and tips on conducting pay equity audits are included in this section. This edition takes a closer look at finding and using salary survey data from both traditional sources and newer available sources. Since compensation is such a lingo-centric world, a glossary of select compensation terms has been added. With changes in the workforce and the way we work, there are new expectations and an increasing demand for new and emerging benefits. Benefits for a changing workforce is a new topic, along with guidance and tips for communicating benefits as technology and communication platforms change.

Section 4: Employee Development

One of the most significant employee experience components is employee development. Technology has greatly impacted learning and development. Microlearning opportunities provide just-in-time training to a workforce with an increasingly short attention span. New training options such as podcasts and YouTube videos, along with gamification, are also discussed. Reskilling the existing workforce and training for a gig economy are new topics in this edition. A chapter on promotions and other internal movements is new for this edition. Workforce and workplace changes have impacted performance management, so discussions focus on outcomes and ways to manage the performance of remote workers.

Section 5: Employee Relations

Critical to sound employee relations practices is determining the facts when there has been an allegation of wrongdoing. In this edition, we've added a discussion on conducting investigations. The #MeToo movement resulted in a renewed focus on harassment and its effective response. A new chapter on workplace harassment is also included. Diversity, equity, and inclusion have taken on prominence in organizations. Thus, a chapter is devoted to this topic, focusing on developing a diversity initiative.

2

HR and Technology

If there was any winner in 2020, it was technology. We saw a digital shift happen at lightning-speed when workers were sent home to work because of the pandemic. This shift highlighted the important role technology plays in organizations, especially within the HR function.

The last 20 years of HR technology focused on efficiency, accuracy, accessibility, and transparency, things like compliant and updated payroll systems, or self-service and mobile access to HR information and transactions, or access to learning and training material. Looking to the future, we know workplaces and the way work is accomplished will change. HR leaders will be invested in making the workplace better and in ensuring that employees are engaged and supported, and technology, specifically artificial intelligence (AI), will likely play a pivotal role.¹

How does HR use technology? Maybe a better question is this: What do we not use it for? HR uses technology throughout the entire employee life cycle. We advertise open positions on our organization's website. We post positions on social media sites. We research prospective employees' credentials on sites like LinkedIn. We interview candidates on various platforms. We maintain a skills inventory electronically. We use it in workforce and succession planning. Technology allows us to provide an amazing number of learning and development opportunities for our staff members. Technology keeps us connected and provides us collaboration tools to use when working remotely. We use it to manage compensation programs and benefits administration. And those are just a few of the ways HR uses technology.

The world of technology is ever changing, and new technologies continue to emerge. It is critical that HR professionals keep current in what is available and what is to come so that they can influence their information technology (IT) counterparts to be on the lookout for new products that can help HR add value. Some of the products that impact HR include:

Scheduling apps for recruiting.

Video conferencing apps, including meeting and collaboration apps.

Applicant tracking systems.

Client servers.

Cloud storage platforms.

Mobile recruiting.

Gamification apps

Artificial intelligence.

Artificial intelligence is the simulation of human intelligence in machines that are programmed to think like humans and mimic human actions.

While AI has applications that are very useful in HR, keep in mind the human factor in HR and do not get so invested in AI that you lose the personal touch. Here are some ways that AI is potentially useful in HR:

AI can support efficiencies in talent acquisition by creating a more candidate-driven process as opposed to a recruiter-driven process. Using AI-based tools allows candidates to apply online and take an assessment immediately and potentially receive a tailored, online interview focused on targeted questions. This process allows an organization to have a group of finalists to interview, either through a video platform or in person. Efficiency is improved, more qualified and diverse candidates are identified, and cost per hire can be reduced.²

The ability of AI-related tools to randomize and anonymize resumes and applications allows recruiters and hiring managers to assess candidates on their qualifications, thus eliminating unconscious bias. This capability can support an organization's DEI initiatives.³

Employee benefits and benefits administration are greatly aided by artificial intelligence through the use of interactive decision support tools, as discussed in Chapter 17, Employee Benefits.

Another word of caution: AI depends on algorithms, and algorithms can be faulty. It is therefore important for humans to be in the loop to work in partnership with AI to ensure fairness and accountability.

Data and People Analytics

Organizations need reliable data to make good decisions about what is important both to the organization and to its people. To maintain its strategic edge, HR needs to use analytics and data to drive everything related to its employees. Our world is becoming increasingly data dependent, and HR has a good opportunity to capture and analyze data.

HR can use data analytics, for example, when doing workforce and succession planning. This is often accomplished through skills inventories, assuming that employees are providing the information and updating their profiles. The next challenge is having the effective tools to search these inventories to identify the broadest range of skills available.⁴

Additional examples of how HR uses analytics here include analyzing:

Attrition data and trends.

Cost per hire data.

Productivity per recruiting source or recruiter.

Engagement survey findings.

Employee development and learning outcomes.

People data and analytics are moving beyond improving HR processes to understanding workforce capacity and capability as well as the worker experience. Going forward, organizations will need to aggregate and analyze data across not only the employee life cycle but also through employee experiences. This process is going to require the capture and analysis of behavioral data through, for instance, email traffic and badge data. Hopefully, this shift will lead organizations to a more agile, worker-centric approach to the future of work.⁵

Data Management, Privacy, and Security

When it comes to data management, HR has advanced from managing databases of names, addresses, and payroll information. More data is available about learning, engagement, wellness, and how employees are working, but it is critical for that data to be secure, especially if that data is spread across different tools and platforms. The problem is exacerbated by the proliferation of data, cloud solutions, and the vendor solutions in the marketplace.⁶

The HR–IT Relationship

HR professionals have certainly become savvy about using technology but need to constantly upgrade their skills. There is an increased understanding about what technology can do and its importance. Both HR and IT came away from the year 2020 with a greater appreciation for the other and a recognition that their functions needed to be aligned.

As the digital transformation continues and as remote work becomes more common, employees will need to be supported. Supporting them requires collaboration between HR and IT and a shift in focus. The operating model must be around the total workforce (employees and contractors), with a holistic view on talent and a centralized model around data and insight strategies.⁷

David Ulrich, professor at the Ross School of Business at the University of Michigan and management consultant, was asked by Human Resources Executive how HR leaders can best evaluate the tools flooding the market. He offered simple questions to filter the new HR-related apps. First, focus outside in. To what extent does this new digital technology connect its solutions to external customers and investors? If the app does not increase value in the marketplace, move on. Second, build on previous work. Does the new technological innovation build on, complement, and extend previous work? Digital innovation with no roots in the past will not likely have fruits in the future. Third, deliver on strategy and goals. How will the technology enable strategic choices? Technology is a means to an end—it enables strategy.⁸

Challenge to HR Professionals

Most of our workforces are more tech-enabled than ever before, and employees' expectations for high-quality technology support is increasing. Consequently, HR needs to focus attention on maximizing technical support. This attention will increase HR's value in the organization as it works to propel the organization to fulfill its mission.

Big Ideas

Artificial intelligence is becoming increasingly important and can be beneficial in many ways. Nevertheless, maintaining a high-tech and high-touch philosophy is important to keep the human in human resources.

Data and analytics are important to decision-making. Having good data is increasingly useful as organizations analyze employee experiences and move to be more agile as they approach the future workplace.

Data management and the security of employee information are among the biggest challenges HR leaders will continue to face, especially as more technical solutions emerge.

Strong bonds must exist in organizations between HR leaders and IT leaders, with each gaining a greater appreciation for the other and a recognition that their functions need to be aligned.

SECTION 1

TALENT ACQUISITION

3

Workforce Planning . . . Succession Planning

Baseball legend Yogi Berra said, If you don't know where you are going, you'll end up someplace else. Organizations also have to know where they are headed to be successful. One of the key components of strategic business planning is workforce planning.

Any strategic business plan deals with resource requirements, and, just as financial requirements need to be addressed, a well-crafted strategic plan needs to ensure that the appropriate people with the right skills are available to accomplish plan goals and objectives. Smart organizations include HR in the their strategic planning process so that there is an easy transition from strategic planning to workforce planning. If you are not included in your organization's strategic planning process, consider talking with your CEO or other key players in your organization to inform them of the value you bring to the strategic planning process. After all, the best strategic plan will be ineffective without the right people in the right places with the right skills to carry it out—or, as Jim Collins put it so well in Good to Great, having the right people on the bus.¹

If you are not successful in being included in the strategic planning process, you will need access to the plan to be able to do a workforce or HR plan that links to the strategic plan.

An increasing number of savvy organizations are seeing the value of a well-crafted workforce plan. The growing interest is being sparked by several factors, including talent shortages, an aging workforce facing retirement, and increased productivity that requires different skill sets. As more organizations include workforce planning in their business processes, the need for strong business analytics has emerged. Several companies provide technology solutions to help collect the required data. Some provide stand-alone analytic tools, including Workday, SAP, Visier, and many more.

As HR seeks to add value to organizations, workforce planning offers a way to accomplish that by presenting a holistic view of the current organization and a window into future needs.

Workforce planning is the process an organization uses to analyze its current workforce in light of what is projected over the length of the strategic plan. Is the organization in growth mode, and, if so, what skills are needed to meet the demands of an expanded business, and where will the new jobs be located? Is the organization going to need to downsize or outsource positions? If so, can any of the affected employees be trained to take on new responsibilities? These are just some of many issues included in a workforce plan. Workforce planning requires leadership, a clear vision, mission and strategic objectives, and the involvement of a significant number of participants including leaders and managers. It is an inclusive process that draws together finance, operations, human resources, marketing, and other key functions.

Workforce planning focuses on developing information that can help an organization make good decisions for both the short and long term with the realization that plans, no matter how well thought out, may need to be revised to meet the changing business climate. Therefore, plans need to be evaluated often and revised as needed.

To be successful, any workforce plan must be carefully grounded in the culture in which it will be utilized. In other words, there is no cookie-cutter approach to workforce planning; each one is unique.

A well-crafted workforce plan also provides managers with a better understanding of the strengths and weaknesses of their people. Workforce planning requires all participants to open their minds to the limitations and the possibilities and to consider issues around succession management (see Succession Management as a Workforce Planning Tool, later in this chapter).

Workforce planning allows the organization to build a longer-term context for short-term decision-making to predict the future. It includes an inventory of all current and future positions and focuses attention on positions that are key to the organization's success and/or positions that are hard to fill and, therefore, will take more time to recruit.

Some people see workforce planning as only a staffing tool for anticipating hiring needs, but it can also be a critical tool for determining employee development and succession needs. Successful organizations conduct regular and thorough workforce plans so that staffing needs can be measured, employee development needs can be assessed, and contingent workforce options can be utilized to create a fully functional workforce that is able to meet the organization's business requirements.

Tips for Effective Workforce Planning

Designate a team lead from the HR department to manage the process.

Involve finance, marketing, and operations leaders in the process.

Find a senior executive to champion the process.

Identify key stakeholders and involve them in the planning process.

Coordinate the plan with the strategic plan, succession planning, and career development initiatives.

Ensure workforce planning is an ongoing activity and evaluated frequently.

A strategic plan charts the future with broad mission-related targets and milestones; a workforce plan translates strategic thinking into concrete actions in the areas of workforce staffing and training needs. When an organization successfully aligns human resources activities with organization strategies, activities fit strategically and reinforce each other. This strategic fit produces consistency and ensures that HR-related activities will reinforce the organization's business strategy.

HR functions impacted by the strategic plan include:

Staffing.

Compensation.

Benefits.

Employee experience.

Employee engagement.

Retention.

Succession management.

Employee development.

Management development.

Leadership development.

Step-by-Step Process to Develop a Workforce Plan

Step 1: Analyze the Current Workforce

The first step in the workforce plan looks at the current workforce—its skills and demographic makeup, including race, gender, and age. Age may be a particularly important factor to consider if the organization has a significant number of people moving toward retirement age