Newsletter May 2006

Developing personnel strategies with a vision

- More examples how to use for the workforce forecast -

In our newsletter from December 2005 we have already shown how you can predict the demographic change using the workforce forecast. With this technique you can get a forecast of your workforce’s age structure so that you can intervene early.
Which further predictions you can get using the workforce forecast, we will explain with two more examples. Note, that these are predictions under the assumption that the trends of the past will continue in the future. This is of course not necessarily true. But you can at least learn whether it is desirable to intervene in order to get something changed or to try to keep it as it was.

1. Evaluating your appraisal system

Appraisals are usually made periodically to assess the achievement goals and the general performance and skills of employees. The results are used for various purposes: career development, bonus payment, etc.
If you want to know whether your appraisal system suits your objectives, it has to be evaluated. To see whether the system accomplishes the requirements in the future you have to get an idea about the future trend of your appraisal results. Maybe there will be need for action, because the appraisal results are not dynamic enough but deadlocked, for instance because the highest level will never be reached or because employees with a poor result never have a chance to improve due to the tasks they are given. It also might be necessary to compare the results within regions, divisions, employee groups and so on. Which trends are noticeable and are they desired?
With workforce forecast you will get such information. Assuming the process of appraisal does not change the former data will be analysed and extrapolated to the future. The extrapolation bases on the calculated probabilities to be appraised on a higher, on the same or a lower level per criteria. So there are preconditions that the criteria are appraised on multi-level scales and the appraisal catalogues always stays the same. Another assumption is that the data base is big enough to get valid results.

2. Assistance for restructuring your workforce

At the moment many companies are redesigning their organisational structure - very often the purpose is to reduce the headcount. For this purpose important to know not only which contract type employees have today but also which they will have tomorrow. The as-is state is quickly reported. But how does it look in the future? How many of the today’s inactive employees (e.g. employees on parental leave) will return to an active employment and if yes, when will they do so? You can make assumptions or get clarity with the help of a workforce forecast to avoid unattended surprises. A customer recently said that they did not count with so many female employees returning from maternity protection / parental leave back to work. They weren’t aware of the fact that in the eastern part of Germany the proportion of working mothers is still higher than in the West.
This clearly shows that evaluating changes of employment status by using further distinctive features like the region can be of use. So you should first identify all criteria concerning the redesign and if necessary consider them in your forecast. Only then you will get a detailed allocation for the future to base your planning upon. Such long-term planning is particularly important in countries, where legislation and culture encourage long-term employment (such as Japan, Scandinavia or Germany) and where no American style hire-and-fire culture prevails.
How an allocation of different groups of a criterion can look using a customer program in SAP® HR you can see in the following figures. They contain the allocation in two successive years. Disproportionately huge accumulations in groups are displayed orange or red. Via export to Excel further evaluations are possible.


Fig. 1: Allocation of employees per parameter (left) and parameter value (above) in the year X


Fig. 2: Allocation of employees per parameter (left) and parameter value (above) in the year X+1

Could we give helpful suggestions to you? In which context would the workforce forecast be helpful for you? Write us your comments to kontakt@iprocon.de.We are also happy to answer your questions.

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