Abstract
The purpose of this paper was to analyse Kroger’s workforce planning model. The analysis revealed that the company uses the strategic workforce planning model to meet its labour force needs. The model has enabled the company to recruit and retain the right number of employees.
In addition, the model allows the company to hire only individuals with the right skill set. As a result, the company has avoided the costs associated with having excess employees. Kroger’s competitiveness has also improved because its employees have adequate skills and knowledge.
Nonetheless, the model fails to address the unique labour force needs of its numerous business units. This weakness is attributed to the fact that workforce planning is done at the corporate rather than unit level. Therefore, the company should conduct workforce planning at the unit level to ensure that its labour force needs are addressed effectively.
Introduction
Workforce planning refers to the “systematic process of identifying and addressing the gaps between the labour force of today and the human capital needs of tomorrow”. Effective workforce planning is central to the success of a business because it helps managers to forecast and address company-wide staffing needs.
This involves identifying and addressing the internal and external challenges that might limit access to the desired skill set. Workforce planning also helps managers to deploy employees and organise work effectively to achieve the strategic objectives of their companies.
Generally, staff expenses account for nearly 40% of operating costs in most organisations. In addition, nearly half of the employees are often assigned knowledge-intensive roles that directly influence the profitability of their companies. Therefore, failure to use an effective workforce-planning model can adversely affect the performance of a business.
It is against this background that this paper will analyse the workforce planning process/ model used by Kroger. The first part of the analysis will provide a detailed description of the workforce planning processes that are currently being used by the company. This will be followed by an assessment of the strengths and the weakness of the model. The second part of the paper will provide recommendations to improve the company’s workforce planning processes.
Current Workforce Planning Processes
Kroger uses the strategic approach to workforce planning. The company has chosen the strategic approach in order to ensure value improvement and reduction in labour costs. The company’s workforce planning cycle consists of five major steps, which include the following.
Setting Strategic Direction
The first step in workforce planning at Kroger involves aligning labour force needs to the company’s strategic intent. The aim of this step is to help the company’s managers to gain a clear understanding of why workforce planning is needed.
In this respect, the company’s vision and mission statements provide a broad framework for identifying the number of employees and skills that are required by the company. In addition, the company’s business plan is often reviewed to determine the expected changes in the company that will necessitate reorganisation or expansion of the workforce (Kroger, 2014).
The management explains the business plan to the workforce planners to ensure that its objectives are taken into account during the labour force planning process. Thus, reviewing the business plan allows the workforce planners to align Kroger’s human capital to the expected level of performance in the company.
Workforce Analysis
After defining the strategic intent of the company, the managers conduct a detailed workforce analysis to determine the existing human capital and how it will change in future. This means that the company’s human resource managers and the workforce planners identify the number of employees in various departments and positions.
They also determine the expected effect of labour turnover and retirement on the workforce. In particular, they forecast the future workforce needs in the company (Kroger, 2014). Thus, the main purpose of the workforce analysis is to enable the managers to identify the weaknesses or the gaps in the existing labour force.
Generally, the outcome of the analysis often indicates whether Kroger has a shortage or surplus human capital. The analysis also helps the company to determine the skills and competencies that it must acquire and retain to achieve its strategic objectives.
Developing Action Plans
The third step involves developing action plans to close the gaps identified during the workforce analysis. Kroger’s action plans cover several areas, which include recruiting/ succession planning, training/ staff development, downsizing, and technological enhancements.
Recruitment action plans are used by the company to address labour shortages. For instance, Kroger often recruits new associates whenever it opens a new store to avoid staff shortages. Moreover, it uses succession planning to fill key positions that are likely to fall vacant due to foreseeable situations such as retirement (Kroger, 2014).
Kroger usually resort to downsizing because of two main reasons. First, the company normally reduces its workforce to avoid losses during economic downturn or recessions. Second, mergers and acquisitions always lead to downsizing in the company.
In this case, the number of employees is reduced to eliminate unnecessary positions in the company. “Staff training and development initiatives are used by the company to close the skill and knowledge gaps in its workforce” (Kroger, 2014).
This strategy enables Kroger to access the expertise that would be difficult to acquire through recruitment because of the high competition in the labour market. Oftentimes, Kroger resorts to technological enhancements to deliver services that can be provided at a low cost through automation.
For instance, the company is increasingly replacing its customer care representatives with computer-based online customer relationship management systems (CRM). This helps the company to reduce labour costs while enhancing the quality of customer service.
Implementing the Action Plans
At this stage, Kroger’s managers focus on implementing the strategies that have been selected to address the identified workforce needs. This involves allocating adequate human and financial resources to implement the action plans.
For instance, during downsizing, the company hires a trained psychiatrist to provide counseling services that help the affected employees to cope with the effects of losing their jobs. In addition, the company provides funds to compensate the employees for losing their jobs.
Coordination is an integral part of implementing workforce action plans at Kroger. Specifically, the managers have to create cross-functional teams that work together to avoid the bottlenecks that are likely to prevent the implementation of the identified action plans (Kroger, 2014).
For instance, the recruitment team often includes a HR specialist and an expert from the department where the vacancy to be filled exists. In this case, effective coordination between the HR team and the departments that require new staff ensures that only the right individuals are employed.
Monitoring and Evaluation
The last stage in Kroger’s workforce planning cycle involves reviewing the progress of the implementation of the action plans. At this stage, the company evaluates the achievements in the process of implementing its workforce plan.
The outcome of the monitoring and evaluation process helps the company’s managers to modify the workforce plan by changing its objectives or adopting new strategies to implement it (Kroger, 2014). As a result, the company is able to develop timely solutions to the challenges that are likely to compromise the effectives of its workforce plan.
Analysis of the Current Workforce Planning
Strengths
The strengths of Kroger’s workforce planning process/ model include the following. First, the workforce planning process enables the company to maintain the right labour force size. Specifically, matching the existing human capital with the projected workforce needs has enabled Kroger to hire the right number of individuals in the right roles. Having the right workforce size helps the company to avoid the costs associated with hiring excess employees.
In addition, it has helped the company to avoid staff shortages that often arise due to the failure to identify and address medium-term and long-term workforce needs. Second, strategic workforce planning has helped the company to maintain the right shape of its workforce.
In this case, the right shape refers to the desired ratio of administrators to professionals, experienced staff to new hires, and managers to employees. The right shape has been maintained through identification and elimination of duplicated roles. The resulting improvement in efficiency in decision-making processes allows the company to respond to market needs in time.
Third, the company’s workforce planning process has helped it to hire employees with the right skills. This has been achieved through linking business strategies and objectives to action plans that address issues such as training and recruiting staff.
Access to adequate talent is a source of competitive advantage because it facilitates innovation and delivery of high quality customer services. Kroger’s customer loyalty and brand image have improved tremendously because of the expertise of its employees.
Finally, the strategic approach to workforce planning has led to improved productivity at Kroger. In this case, high productivity is attributed to the advanced skills of the employees, which enable them to achieve or surpass their performance targets.
Weaknesses
The weaknesses of Kroger’s workforce planning processes include the following. First, the company’s approach to workforce planning ignores the importance of labour force segmentation. The workforce plan is often developed and implemented at the corporate level.
This means that Kroger has a one-size-fit-all workforce plan that is implemented in all its subsidiaries and business units. In this respect, the workforce plans are often very big, which makes their implementation to be very cumbersome.
Furthermore, the effectiveness of the workforce plans is limited because the managers standardise the strategies that are used to address the company’s labour force needs. As a result, the workforce planners fail to take into account the unique and dynamic workforce needs of the various operating units and subsidiaries of the company.
Second, the company’s workforce planning model mainly focuses on head counts rather than the quality of the human capital. In particular, the action plans that the company uses to satisfy its labour force needs focus only on recruitment and deployment of employees.
Thus, the model ignores the potential impacts of organisational culture and organisation design on its workforce planning efforts and needs. This has led to a situation where the company’s managers in different countries have varied understanding of what the right workforce size means and how it should be achieved.
This often leads to conflicts that prevent the implementation of the workforce plan in a seamless manner. Finally, the company’s workforce planning processes tend to be organisation-centric rather than employee-centric. Although the planning model ensures that the company has the right workforce size, it fails to address employees’ needs such as adequate pay.
The resulting increase in labour turnover makes it very difficult to predict short-term and medium-term changes in the workforce. Consequently, workforce planning becomes very difficult and ineffective.
Recommendations
Kroger should focus on workforce segmentation in order to effectively plan for its labour force needs. This means that workforce planning should be done at the business unit level by supervisors to allow the company to develop tailor-made solutions that address the unique labour force needs of its divisions or subsidiaries. In this respect, the various steps of workforce planning should be improved in the following ways.
Identifying the Issue Drivers
Workforce planning should “begin with a clear definition of the nature and scope of the personnel issues that have to be addressed at the unit level”. A comprehensive internal and external environmental scan should be conducted to identify the factors that are likely to influence workforce planning at the unit level.
The internal environmental scan should involve examining the potential effects of changes in budgetary allocations and the financial performance of the company on the workforce. In addition, the effects of expected changes in the company’s mission or business model on its labour force should be identified.
In the external environment, the issues that should be considered include political factors such as an affirmative action that promotes employment of particular groups in a given country. Moreover, regulations in the labour market and the demographic characteristics of the population should be reviewed.
The environmental scan will enhance the planning process by enabling the company to identify the factors that are likely to influence the evolution of its labour force in the short-term and long-term.
Workforce Analysis
Currently, workforce analysis at Kroger focuses only on determining the number of employees in the company and the skills that they possess. The workforce analysis can provide valuable insights if its scope is expanded by examining employee demographics and expected changes in workload.
Assessing personnel demographics will shed light on the level of diversity in the company. For instance, the planners will be able to know the gender, age, and ethnic composition of the workforce. As a result, it will be possible to incorporate policies or measures that facilitate compliance with diversity requirements in the workforce plan.
Kroger’s workforce planners use the company’s business expansion plan as the main source of information concerning the expected changes in workload (Kroger, 2014). As a result, they ignore the changes in workload that often arise due to modification of tasks or introduction of new ways of executing various business processes.
In this respect, the workforce planners should review various roles/ positions to determine how their evolution will affect workload. This will improve the accuracy of the information concerning the number of employees and the skills that are required to achieve the company’s strategic objectives.
Strategy Development
The scope of the action plans that Kroger uses to achieve its workforce objectives should be expanded to improve their effectiveness. Apart from facilitating talent acquisition, the action plans should provide a framework for staff development and implementation of retention programmes. This can be achieved by developing action plans that cover five key areas namely, staffing, infrastructure, organisation design, organisational culture, and risk management.
Staffing action plans should have unit-wide strategies to facilitate recruitment and retention of the desired talent. Moreover, they should have redeployment strategies that allow the company to use the knowledge, skills, and competencies of its employees fully. Succession plans should be developed to help the company to create an internal pool of employees who can easily fill key management positions.
In addition, the staffing action plans should facilitate employee performance management. Specifically, they should define the unit-level standards and expectations for assessing employee performance. This will enhance workforce planning by ensuring that the company retains only the employees who are able to achieve the desired performance level.
Infrastructure refers to the action plans that are developed to enhance employee retention. The workforce planners should “develop position-specific job classifications to ensure that employees are assigned duties and responsibilities that match their skills”.
Moreover, the action plans should have a performance-based reward system that enhances staff retention by providing adequate remuneration. Since the company’s employees belong to labour unions, action plans that address disputes concerning collective bargaining agreements should be developed and implemented.
The company’s workforce planning efforts can only be effective if action plans that facilitate organisation design are developed. The organisation design strategies should facilitate reorganisation of work at the unit level. This will help supervisors to distribute professional and subordinate staff effectively to eliminate obstacles that may reduce employee performance at the unit level.
The workforce planners should develop action plans that align the company’s human capital to its organisational culture. The rationale of this strategy is that a workforce that does not have a clear understanding of the company’s organisational culture will hardly be able to demonstrate the expected behaviour patterns.
In this case, the workforce planners should identify the values that guide employees’ performance in the company. As a result, it will be possible to establish the core behavioural standards that have to be met in various business units. The behavioural standards will help the company to develop action plans that facilitate recruitment of people who can easily adapt to its organisational culture.
According to Deagle (2009), an effective workforce plan should have a change management action plan to align employees’ behaviours to organisational culture. This means that Kroger’s workforce plan should have strategies that will enable managers and supervisors to influence employees’ attitudes towards change in the company.
An effective workforce plan must also have strategies for managing the risks that are likely to have negative effects on the wellbeing and performance of employees. In this respect, the risk management action plans should define the procedures that employees are expected to use to respond to accidents such as fire outbreaks. In addition, they should provide training opportunities to equip employees with adequate skills to address workplace violence and safety hazards.
Strategy Implementation
The process of implementing the company’s action plans should be improved in the following ways. First, the workforce planners should focus on winning the support of key managers in the company before implementing the action plans. The managers are likely to allocate adequate financial resources to facilitate the implementation process if they support the workforce plan.
Moreover, winning the support of managers will avert the resistance that the workforce planners are likely to experience during the implementation process. The roles and responsibilities of the employees or managers who are involved in the implementation process should be defined clearly. Each member of the implementation team should understand the expected deliverables and how they should be achieved.
For instance, the succession planners should know the procedures that have to be used to identify and mentor a candidate for an executive position. The implementation process should also have a clear timeline. Furthermore, the performance measures that are to be used by the workforce planners must be defined clearly.
This will enhance the evaluation process by providing objective criteria for assessing the achievements of the workforce plan. Generally, the workforce plan should be implemented alongside the company’s strategic plan. The rationale of this strategy is that it will enable the company to adjust the workforce plan consistently to reflect the changes in its strategic plan.
Evaluating the Workforce Plan
The workforce plan should be monitored continuously and evaluated on a regular basis to ensure achievement of the desired outcomes. The company should conduct quarterly evaluations to identify and address the weaknesses of the plan in time.
Apart from determining the strategies that work and those that do not, the evaluation process should identify emerging workforce issues in the company. This will enable the planners to incorporate the solutions to the emerging issues in the existing action plans, thereby saving the costs associated with developing a new workforce plan in future.
Conclusion
Kroger uses the strategic workforce-planning model to ensure that it has enough employees. The company’s workforce planning process is characterized by five stages. These include setting the strategic direction, workforce analysis, developing action plans, implementing the action plans, and monitoring/ evaluation.
The main strength of the company’s workforce planning model is that it facilitates recruitment and retention of the right number of employees. This helps the company to minimize labour costs while increasing productivity. The model also improves the company’s competitiveness by ensuring that it has employees with the skills that are required to achieve business objectives.
The main weakness of the model is that workforce planning is done at the corporate rather than unit level. Thus, it hardly resolves the unique personnel needs of the various operating units in the company. In this respect, workforce segmentation should be incorporated in the planning process to allow the planners to develop action plans that address the unique needs of each business unit.
In addition, the scope of the action plans should be expanded by including strategies that address the effects of organisation design and organisational culture on workforce.
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