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[Music] so we start on top with HR strategy and planning so my first question is we going to talk about a company strategy yeah you will hear this term multiple times during studies in your career strategy the question here is how is a company's strategy related to it our strategy this question must sound very weird to you yeah what does that mean huh uh going to talk about this as part of an HR strategy which company functions should be of highest priority you talk about the question what which which is more important research search and development Marketing sales what is of highest importance yeah that's a really key question and then the next question is can we predict or in other terms can we plan how many people of what kind a company needs in uh the upcoming years of course there are some methods and i' would like to share with you some of the most important methods okay but let's start with the first question here are some strategies or sometimes we also name it strategic priorities the question is what is of highest priority for a company uh what I've shown you here are five different strategies and I try to assign companies where we know or at least I think that this should be the strategy of this particular company again what is strategy What is strategy sorry a plan a plan it's about the future longterm plan it's a long-term plan a strategy is not about what I do tomorrow a strategy is about what I do in the upcoming years 5 10 15 years right so strategy is always long term and it's in the future but there's one important aspect which I want you to see whenever we talk about strategy there is a management thinker who said strategy means to say no huh I mean that's true strategy means to say say no strategy means to be focused yeah a company cannot be a leader in quality in innovation in price in the brand in global presence in everything companies cannot be the best in everything that's not possible you know because resources are limited once you can't be the best in everything price quality uh uh present print and so on you must Focus okay and the question for a company is always where do we want to be strong is it we want to deliver the most Innovative products yeah like like apple or BMW or companies like Ros pharmaceutic IAL they really differentiate themselves through Innovation if you ask the CEO chief executive officer foran for of these companies what is of highest importance for our company for your company so that you will be there still in five or 10 years yeah the strategy is the answer at Apple I would say because we will exist in 5 years because we are more enough ative than the others okay they will not say because we produce products which are cheaper than those of the others no it's not about price it's about Innovation while here look at those companies Red Bull Red Bull is not about Innovation not at all I mean this guy who who founded this company he really worked long a couple of years to really Define this Essence which makes up the Red Bull but then it's it stopped changing like like Coca-Cola yeah it's not about Innovation it's even not about price I mean it's terribly expensive Red Bull yeah it's simply about the brand brand brand brand brand means the people know us the People Like Us and the people they have very clear associations with without without with the name with the logo and everything there's a clear promise in the market that people understand so you compare Red Bull with r yeah whole different priorities price there are companies out there say well we will exist in five or 10 years will still exist because why because we will make it to offer products and services at the cheapest possible price okay it's not about Innovation yeah Aldi is not about Innovation not at all it's the opposite stick to things don't change things yeah changing things is is expensive yeah uh so Aldi is about price only yeah Ry it's about price only then some companies differentiate themselves against their competitors through design say well we are not the cheapest one we are not very Innovative but we have the best design in the world full stop yeah or the right one quality Luft henser why should somebody use Luft henser because because of falling because people say you fly with lansar compared to flying with rir hey lansar German reliability they are in time good service yeah it's about quality it's not about price it's not about Innovation it's not about the brand it's the same with General Electric they focus so much on quality yeah Zero Tolerance with regards to Quality quality Quality quality we produce the best possible quality or IWC shos yeah watches it's about quality of course the best design in the world but it's about quality uh you buy this watch one time in your life and the upcoming generation they will can use it it's not damageable it's perfect precise yeah expensive yeah so what I want to show you here is whenever we talk about strategy it's about the question what is of highest importance for the company's future yeah and again compare the different brands uh like Ryan a Lua same same industry but different priorities here's the question is there a possibility that a company has to have like two of these topics to be like the best there is yeah uh I I have one example Apple yeah it's really Innovation and design it's both but is it necessary price but is it necessary that they have Innovation and design no it's not necessary okay but that also reflects the the the the minds of the executives yeah I mean Steve Jobs um he was crazy about design yeah totally he love the design yeah he would said the biggest problem with Microsoft is they have no taste that's must look good must look sexy magic design uh that was Steve Jobs the other founder Steve was it was about Innovation this company of these two guys well the building blocks of Apple having the new technology brought into the best design and this combination that was the ultimate strategic priority of apple and it was never priz yeah or other things okay of course don't get me wrong it's not that companies that focus on in inovation don't take care about brand price design quality of course BMW they take they have designers but it's it's if you ask a executive at BMW why should somebody buy BMW and not Mercedes they will never ever say because of the design so say yes the design of all car is perfect but that's not the ultimate reason yeah if it's about design yeah then your should buy an OD I don't know so the first point is that you understand this term strategy you can have entire lecture about strategy but that's enough for us now uh the question now is companies have strategies and these are just some terms that relate to this um company like like BMW of course they have certain strategic challenges how can we come up with a competitive e vehicle electronic vehicle how can we cope with the Chinese competition yeah how can we become more uh uh efficient yeah uh to protect the climate yeah uh we talked about strategic priorities it's about business objectives where want what do we want to be in the next 10 years what is our market share in the next 10 years how is the profit revenue and what are our competitive advantages or in other terms what do we want to be better than the others what is our vision where do we want to be in the future these are just some terms around this term strategy yeah you see it's about the future it's about challenges priorities so this is one thing the question now is what does that mean for the people okay so I give you an example look at the deut Telecom yeah German telecommunication company this company was formerly uh owned by public yeah was a monopolist and it happened like like with every monopolist they really had a lousy quality really it was bad then deuts telekom become became a a normal company yeah that needed to compete against others and they defined a clear strategy 10 years ago also D Telecom said our strategy is we will provide the best service in our industry best service at the lowest price full stop quality price now question to you a company like d Telecom like any other telecommunication company if they want to deliver the best possible Quality Service quality what does that mean for the employee H they have to work better they have to work better what does that mean long huh long okay yeah longer working hours longer working hours better education better education think think think in easier terms yeah you enter a sales shop of Telecom motivation motivation how do you see motivation benefits benefits incentives incentives Works think about very simple things if Telecom wants to deliver best possible quality the people must be friendly H they have to have a smile on their face they must respond fastly yeah if you enter a telecom shop they must be well informed about their products and their services they must be able to cope even with the most difficult client yeah so these are very simple competencies yeah saying thank you yeah please okay knowing the customer knowing the product if a company wants to deliver best possible quality that means that the people have certain competencies like good knowledge friendliness empathy all these things you know and then the question is if you want to have this because it's necessary to to translate this strategy into success what should we do in HR another example a similar example even worse Chan 20 years ago driving with a train that was a mess yeah um well there was no thank you thank you for choosing do thank you for traveling with thank you for traveling there was no thank you no please nothing that was really worse yeah when the train finished the message was Alice oen that's wrong it means Al Al Al all out you know there was a German term used by the D Jaan people uh it was not the Gest you were uh F huh a logistic case so it's really worse so the de band really did a lot to say well we want to compete in the market we have to increase our service quality so that means for the people that they have to be motivated to be friendly they have to be able to be friendly yeah they want be friendly they can be friendly very simple during the uh World Championship in soccer the T said well we have a lot of thousands millions of foreign guests driving in our train and so the people in the train or ambes must be able to speak English and since then you hear this message thank you for traveling with thean before 2006 there was no English message started from 2006 with a world championship that meant so the messers we have to have employees which are able to speak English that meant on AE are s such Human Resource Management that they had to train 50,000 people in speaking English okay now you see the linkage and this is just one simple example here is a strategy here's the question what does that mean for the people what do we have to do to have these employees which we have to have at the end of the day so your exercises really for the preparation of the exam take any company you like yeah McDonald's Google uh T C I don't care and think about what is the strategy of this company and if this the strategy of the company what does that mean for other people and if this is what it means for the people what must HR have to do in terms of training development recting maybe layoffs or other things sorry but may I ask you to shut the window okay got it question does it have to be a company that went from bad to from bad to good like no no no it it applies for any company in the world when I think of midsize companies here in the black forest for many companies they have very specific challenge strategic challenge they have to expand to Asia for instance if this is a strategy to to expand to grow to follow your customers that means that employees must be able to work on a global basis that's much more than just talking and speaking language Intercultural skills and so on yeah doing business in China yeah to to ensure this you must do something in HR you can always apply this this this this logic it's it's quite simple now there is a next idea which is really important before we come to the next idea about how to translate a strategy into an HR strategy uh here you see uh an overview of the most common functions in companies yeah probably you know about most let let me let me say some comments about product management this is a function where people think about the products in the future or the existing products yeah in a company like proon gamble for instance you have hundreds of products uh and for every product there's somebody who is responsible for this toothbrush yeah okay so product management is about thinking what should we do in the future which products will will uh be successful in the market which are demanded so on and then we have R&D which means means research and development for research and development there you primarily find scientists yeah um in BMW you have a huge R&D department they do research about how to build engines which are more efficient than the past ones you or in the pharmaceutical industry you have a lot of researchers okay and then beside yeah how must the product look like and then production planning how do we produce it where do we produce the product yeah um and then the actual production engineering where the products are produced and then we have marketing okay some would say marketing must be at the beginning we don't care marketing the four piece what is the price of the product um how to promote the product and all these things and then of course sales yeah have to sell the product not only doing marketing communicate but to sell it distributed yeah and for the bigger clients we have something which we call a key account management key account manag a key account key account is very big important client yeah and there are key account managers taking care for the relationship to these very important clients and then we have service and support you have problems with your car okay call the service and support department hotline call centers and there are some functions which support these core functions quality management yeah uh it controlling accounting you know better what that is HR of course facility uh my U public relations Communications purchase yeah and purchase they take care of purchasing products material uh production machines materials Logistics and above all we have management now I don't care whether or not you understand these different functions yeah my question is what is the most important function don't say HR it's definitely not research and devel research and development yes of course research and development is the most important department because if they don't do well I mean you cannot be Innovative you will not come up with latest products you cannot compete with Innovative products yeah so R&D is the most important function do you all agree well actually this is different like uh if we came if we went back to the strategy then we will see that for r b R&D are nothing because it's not needed actually is needed to something else maybe marketing so I think it just depends on the company mhm so it's not like there is no function that I can say that this is the most important F no no no nope not for me sir yes you don't have the Red Bull without yeah actually but a function is something that works not only for one time that works all the time oh you're right you think you can get rid of this particular function yeah I would say marketing is quite important because even if you have the most useless product in the world if you have the right marketing the right commercial sell anything yes so if you have the best product in the world yeah if you don't have a proper marketing you lose yeah of course yeah or even if you have a lousy product with a good marketing you still can uh you still can win yeah yes of course marketing is the most important function you suffer it's about in like a timetable like the importance of the single yeah single like Rd the life ccle of a product different functions become that's interesting it's very different do like this yeah at some point R&D is the most important but then if they got that job then that job well production most important so [Music] it's yeah which is the most uh you also can say it's a silly question because every function is important if a function is not important it wouldn't be there and can you imagine a company like BMW without design can you imagine a company like BMW without it no without purchase no you have to have all these function it's a silly question to think about what is the most important they all important that's a perspective but uh you can also say it could be that everything is of equal importance so there must be something which is more important than than the rest I guess we could categorize the core functions as being vital and not so vital um research and development obviously is vital if you don't have a seed let's say or you need to start with something and you can live without marketing your product's going to suck it's not going to sell but you're still going to have something to sell so I guess research and development in my opinion definitely STS the chain of importance and continues on with other things that we may or may not live with Okay good very good I agree I think even for marketing we need to do research first like uh which is our Target group and all like what type of product do we need to deliver to them and first comes R&D and marketing yeah but without even the only socalled supportive functions like it R&D couldn't even start that's right working that that's why it is the most important function because with it with it you take care for the let's say the nerve system of a company yeah shut down it and the company will stuck yeah well I would say another most important function is the production because if you don't to sell thank why would you need Mar and everything else anything absolutely you have a wonderful R&D wonderful marketing hey somebody has to produce this stuff yeah if you don't have production manufacturing uh um assembly you can forget about theace somebody has to produce this car yeah and this is where the the value is created in the production not on the paper and not on the ad it's in the production you're right that's why production is the most important function totally confused now uh let's stop this here uh I think you you really got a point okay it depends on a strategy yeah and this is something I really want you to see we spoke about strategy different strategic priorities there is a company which is which is uh which is focused on Innovation if Innovation is the Strategic priority of a company which function is the most important one R R&D if it is print which function design marketing marketing if it is price sales product purchase purchase right if you can purchase material and the Machine cheap price low price then you can sell your products at a low price yeah absolutely if you look at Aldi they must have a strong purchase Department yeah the best purchases in the world maybe okay so this is something which I want you really to to understand and and this leads me to this last slide for today and you must understand this slide it's key what we spoke about in the last half an hour was there are functions in companies which are of high strategic relevance and there are functions which are of low strategic relevance again what does that mean you focus on Innovation Innovation is your highest priority then R&D is of highest strategic relevance while the others are of lower strategic relevance you have to have these you have to have it you have to have Logistics and all these things maybe but it's not so important yeah or in other terms the question is really where do you have to have maybe the best people in the market in R&D or in marketing in design and production where do you have to have the best people and where do you have to have good people this is this Dimension and I really want you that I give you a name of a company a well-known company it was a question in an examp by the way yeah the question was something like yeah what might be a key function at ODI which function at ODI is of highest priority please argue we have to understand this strategy then what is important to this company and then tell which function is of highest importance this is something you should be able to doity yeah quality for instance whether it's right or wrong you have to be able to argue okay so that I can see that you have understood this idea so there is the other dimension which is Talent availability availability of where in the labor market arites market yeah how easy is it to find somebody for purchase how easy is it to find somebody for R&D for marketing yeah so these circles here they represent functions right so as you can see now there are some functions which are on the right side maybe on top and those are functions which are absolutely critical for the company at the same time the availability of people is low on top yeah it's hard to find people for this for this function while the function is absolutely critical r r is focusing on Innovation creating the newest inovative product in the pharmaceutical industry and they focus very much on oncology yeah it's about cancer for R it's very hard to find oncologists really scientists which are specialized on oncology cancer but it's important for us so this function then is here on the right side it's a key function all functions on the right side are keyy functions strategically important function uh and here in my example the function would be on top that's a totally different story for Human Resource Management than having a function here yeah where the function is necessary not of highest importance and at the same time it's easy to find people for this function how come it's say High and a left bottom corner High availability it's a little bit misleading yeah High availability is there are a lot of people in the labor market yeah the function is easy to be filled it's easy to recruit people because there are a lot of people out there who want to welome there is a second dimension which is Talent availability what does that mean um you know it's it's a different it's it's it's it's functions differ with regards to how easy it is to get people right look at a company like let's say let's take a CH one Aldi yeah you all know Aldi how difficult is it to hire an cashier Cas it's easy yeah you post an ad you collect the applications you make a choice CH it's done it's easy because there are enough people out there who need a job okay and there are enough people who are enough qualified for a job like this now we learned last time that in a company like this in a Discounter purchase department is of high strategic relevance uh how hard is it to hire one of the best purchase managers for a company like this it's incredibly difficult okay so don't be confused here when I say Talent availability high that means that there are many people out there which you can hire it's easy while Talent availability low on the top of the picture means that there are in there are not enough people out there so that a company can fill their precisions okay so now when we combine the these two dimensions and you look at these circles these circles represent functions you will find functions there minor strategic relevance they are they are necessary yeah no doubt about it they are necessary but they are not of high strategic relevance like the Cashers right they are necessary it's easy to find people for a functions like for a function like this now when we look at the other side the right hand top side you find function there which are of high strategic relevance they are really important for a company not only necessary they are critical you not only have to have good people on these functions you maybe need to have the best people really good people and at the same time it's very hard to find people for these functions so now here is a third dimension in this picture which is indicated by the size of the circle what does that mean the bigger the circle the higher is the future quantitative Workforce demand the demand for employees uh if the circle is high as big it means that this company in this particular function will need to hire a lot of people in the upcoming years if the circle is small that means that but this company will only hire a few people in the upcoming years okay that leads us to a second very important concept look at the circle on the left hand top side this is a big one big circle significant quantitative Workforce demand at the same time the availability of talent is very very limited in the labor market okay uh I give you a typical example look at hospitals at least in Germany or in the Western Industries in hospitals it's quite hard to hire nurses yeah it's really hard working conditions are not so attractive uh compensation is low but at the same time most hospitals have a huge quantitative Workforce demand so once you have this huge quantitative demand at the same time it's hard to meet this demand then we name such a function a so-called bottleneck function bottleneck function germanas fun okay why is this important whenever I work with a company as a consultant I always start with this picture always yeah because this gives me a good understanding about where the company stands yeah I see uh where is the biggest pain where is the need because you can imagine recruiting for a function like this one on the on the uh bottom left hand side recruiting for this function is quite easy while recruiting for such a function on the right hand top side is quite hard yeah and you have to do different things um here for those functions on the on the left hand bottom side you just use ads while for those functions which are hard to be filled and where you have a significant demand you have to do different things you just don't don't just uh use ads you you have to do a lot of things we'll talk about this in the upcoming sessions right even compensation is different compensation for a non-critical function is different than compensation for critical functions maybe for critical functions you need to pay a above Market average while for the others you pay Market average or maybe below so this exercise has a lot of implication for everything we do in HR right so this was the first step understanding what are our bottleneck functions and what are our key functions yeah this is a starting point now HR planning starts from here H uh important question is how many people do we need in the future how can we really tell how many Engineers we need in the future how many managers we need in the future how many Cashers do we need in the future how much purchase experts do we need in the future and the question is can we really anticipate how many people we need in the future this is related to HR planning right yeah uh question to you is it possible really to say how many people we will need in the upcoming years is that possible yeah please I think it would be difficult because you never know whether the environment the compan in is change yeah absolutely so you don't know about the environment and how it will change how will the market change yeah Market will determine the growth maybe revenue and everything so yes I would agree other thoughts s can have roughly information about what would you need because um as an HR Manager or someone who's working in this company that's working on a strategy then you're supposed to know what are the goals that you want to achieve yes and based on that you can roughly know what would you need maybe not specifically but still you can have an idea yeah I would agree so the point here is even though we can't can't predict the future precisely we have a goal yeah we have objectives Revenue growth or whatever so once we have a goal once we have an objective the next question is to achieve these goals how many people do we need on which function right so the first step and this is a very important step for many companies is to look at their age structure and this is a this is a a example um what you can see here is how many employees or managers do we have of which age right uh here I made difference between the employees uh the cray bars and the managers the red bars so question to you when you look at this picture what does that picture tell us most of the people in charge are relatively old the people are relatively old especially the managers they will soon retire and then there's not enough uh they not enough managers to replace them wonderful yeah what we can tell from this picture now now look five five five years into the future or 10 years into the future you can exactly tell how many managers how many employees will retire huh that's a that's an easy game or you can easily make such an AG structure analysis and you can easily tell what will happen in the upcoming years so this is point one is there anything else from which we can determine the future demand so one thing is we will lose people because of retirement is there anything else where does demand come from what does lead to demand consume consume what does that consumption that means that people need things and so companies have to supply them and so the companies have demand for like for labor and then they need the unities so you have you have you have a plan for future Revenue right and maybe you you have uh you anticipate certain growth you will grow in the future if you say well we will grow in the upcoming years by 5% every year then we have a Workforce demand yeah so the second thing as you pointed out exactly is growth what [Music] else change in the mega sorry change in the mega like may need STS enable to work with the new technology and know okay I would say this belongs to to growth yeah future developments things we're going to do in the future will lead to some growth yeah man maybe glob the the the globalization in future will create further demand yeah globalization could mean that you want to enter new markets yeah in other terms that means growth yeah okay Improvement so that we don't need any people technological improvements absolutely think about telecommunication industry yeah for instance today totally different technology than in the past you have to have totally different people in the future than you had in the past because they deal with totally different Services they deal with totally with different Technologies right I think here we will need to hire more um employees than even managers even though that the chart says that we still have employees but not a lot of managers because people are going to promote from one stage to another so probably we will have a lot of uh new people who we prepare to be managers but not m not normal employees so demand of employees is going to be like higher okay so sometimes you you look at the ratio of employees and managers yeah and maybe that does not really fit to what you really want so you have to adjust ingly yeah right let me add some other points one thing is turn over you lose people people quit their job do you know as a company do you know how many people will quit the job next year you don't exactly know it but but you can guess it from the past yeah you can guess you have a turnover rate once you know that in the past you always lost 5% of your Workforce probably you will lose 5% in the future more or less okay so this picture is a summary of what we just spoken about and it's a little bit more more differentiate differentiated uh in the middle of this picture you see one layer of a company yeah one hierarchical layer and let's focus on this when I look at this layer let's say this is middle management to put it simply middle management and the question is how many people do we need in middle management in the upcoming years and we ask ourselves where does the demand come from we said that okay there is growth the company will grow you say it will grow by 5% every year that will determine the workforce demand ingly we have losses yeah people retire and we know how many people will retire in the upcoming years that's an easy game we will have turnover people will leave the company voluntarily and we we we can guess how many people Rel but also we have promotion promotion out of this layer to the next layer okay and that's it that's it so you can say it's promotion it's retirement it's turnover it's growth yeah and uh at least from an academic perspective I must say uh it's quite easy to calculate something like this in practice it's not so easy because many companies do not have the dat data for doing something like this you know uh we will talk about HR controlling in in the in the next course uh but to give you just the kind of impression if you if you ask a company how many 30 mm screws do you have on stock they can tell you the exact number okay they have systems uh Supply Chain management system they can tell you the exact number if I ask a company um how many people do you have some companies really struggle don't even know how many employees they have yeah that's true um if you ask how many sales managers do you have they struggle really so so this is a this is a kind of visionary view yeah but again if you just take some some numbers if you take future retirement if you take former turnover and you anticipate that turnover in the future will be the same once we have growth you can have at least a rough guess about the future Workforce demand which can look like this this is really a very simplified example of how strategic workforce planning can look like okay so this is uh the the Strategic perspective very high level very general relates to the company as such now let's look at the more at a more operational level okay uh and here is a list of some major workforce planning methods um I will not go through these methods now but want to show you two examples and once we have had a look at these examples you will immediately understand what these methods really mean so this is example number one a company okay so here in the lines we have different years yeah and in the second column from the left hand side we have the revenue of this company so in 2003 we have 6 million in Revenue 2012 we have around 12 million okay in the next column you see the number of sales people I have to be more precise you find the term here FTE FTE is a very important term in HR controlling it means as indicated below fulltime equivalent should know this term what is a fulltime equivalent uh I give an example and you will immediately see if you have two employees working part-time let's say 50% yeah both work half a day so to speak then you have two employees but you have one full-time equivalent okay good so from a controlling perspective we think in terms of full-time equivalent and we don't care about how many people uh these are okay so here's the number of sales FTE and from there we can easily calculate the revenue per sales FTE this is simply Revenue divided by the number of sales people sales FTE to be more precise okay then we have also other people uh people that are not related to sales so you can see from this picture that this is probably a sales company they primarily sell okay so then we have the total number of FTE which is simp ly um the number of salese added uh by by by the others and the number of manages what can we do with these numbers we can do some things yeah I show you um the question now is now we are in 2012 and the question is how many people will we need in 2013 yeah in the future we can tell from this number that there is a kind of fixed ratio uh which tell us that the average revenue per sales person per sales FTE is around 200,000 okay when we look at the revenue growth in the past we can see that Revenue growth is about 8% every year and to put it simply we simply anticipate that in next year we will grow by 8% again maybe there are reasons to say well it's more or less depending on the market okay but we simply tell from the past how things going to be in the future okay so if Revenue growth is 8% then Revenue in 2013 will be around 13 million okay and now from this ratio average revenue per sales after te we can tell that that we will probably need 65 sales FTE now we have 6D so we need five additional FTE that's easy okay that's a very simple statistical method to anticipate the future there are some more things uh in this picture um look at the the number of managers the right hand column uh we can tell from this numbers that there is a span of control in this company which is around seven span of control what does that mean it's a number of managers uh um it's the number of employees divided by the number of managers to to to put it very simply yeah it's the span of control tell us how many employees report to one manager okay so if the span of control is is low then each manager has to take care only about a few people if span of control is is Big managers have to deal with a lot of people in their team what is better small small okay why because it's easier to communicate yes it's easier to communicate yeah easier to to treat the people fairly yeah mhm what is the down yeah it's expensive though there are so many managers oh yes it's expensive you have a lot of managers if you have a small span of control you need to have a lot of managers and as we learned we should have less yeah um what is the other downside of a of a small span of control more managers right too many teams too many teams many teams that means that the coordination between these teams is going to be really hard going to be a mess yeah dealing with a lot of teams also the hierarchy yeah you have a lot of hierarchical levels once you have a small span of control right many levels yeah and uh that means that communication from the bottom to the top yeah is is much more hard than having limited levels yeah once the distance from the bottom level to the top level is is smaller okay so there is no there is no uh clear answer which is better small span of control or big span of control okay here we have seven so we can tell uh from the number of required people how many managers we need in 2012 we had 11 managers um next year we're going to have probably 85 people so we have to have one manager more very simple very very simple okay next example the question here is how many people do we need to run a Italian restaurant Pizzeria okay and that's a real question and in a in a in a recent exam I asked the question how many people do you need to run a McDonald's restaurant yeah there was one student who said well I know it I work there it's 12 this is not what I expect you know it's uh I don't care how many people work in a McDonald's restaurant I I care whether you can really calculate this can you guess it and when we talk about workforce planning from a professional point of view I want you to see that that you can use some methods yeah that you can work with some assumptions to calculate this number okay uh so let's simply do this by using a method which is named the task analysis so the first thing is what we do is we we we we have some assumptions some really simple assumptions and here my assumption are we have 200 guests per day okay I don't know whether this is valid reliable or not just let's simply assume this okay we have three guests per table on average so we have 67 tables per day the restaurant uh opens 15 hours a day and I assume that every guest on average has two trinks so from there I I can easily tell how many times we have to do which task and we have some core tasks 67 times we have to prepare a table 67 times we have to take an order because I assume that every guest will eatting Pizza we have to we have to prepare 200 pizzas really 67 times we have to chat with the people 67 times and we have to prepare 400 trinks now the next step is I simply uh look at how much time do we need per task so how much time does it need to prepare a table I would say 2 minutes how much time does it take to take an order 3 minutes prepare a pizza 4 minutes it's it's not the total time for preparing a pizza it's really only the the work time yeah maybe 4 minutes and so on um so multiplying the the number of tasks by by the duration per task uh will lead us to the right hand column duration in hours so 2 hours preparing table 13 hours for preparing pizza and so on so in total 28 hours but people in a Italian restaurants they they not only do the core tasks they do some additional tasks they have prags question is whether this is a task but happens right we have break some administrative tests counting the money and so on right uh miscellaneous things 20% just just guessing so on top to the 28 hours we have we have 10 hours in total 38 hours working hours per day are eight hours per FTE so to speak which lead us to Total 47 fulltime equivalent simply 38 hours divided by 8 so if you ask me how many people do you need to run a Italian restaurant this is the answer now there are probably two reactions yeah some of you might say wow now I understand that makes totally sense know some of you might say sorry that's uh no restaurant works like this it's much more complicated uh these assumptions are wrong you can't tell that that you have 200 guests in a day you have some days where you have 100 and other day you have three 300 so you can't assume that that two drinks per guest I mean sorry if you have a lot of students in the restaurants probably more so you can say well this is this is this is crap probably the truth is somewhere in between yeah it's much better than just guessing yeah if you ask an director how many people do we need for running an Italian restaurant say I don't know uh eight four I don't know let's say six no oh nobody would rely to say on this HR Director but as soon as you as you use some assumptions some calculations will lead to two certain numbers uh on top of this you can say well we assume this what knowing that this is not really precise so to be safe just just add 20% on this and then we're going to be safe okay in practice you do workforce planning like this you do it when you plan the workfall demand for projects you simply look at what will be the task how much time do we need for this task and then you come to a to an answer now let me flip back to to this small boring slide we have talked through all these methods the first one are the leading indicators what is that a leading indicator is a fixed ratio between performance and the workforce demand right it's uh we have so many employees there is a span of control which says that we have seven employees per manager if we have 70 employees we have to have 10 managers it's a fixed ratio or as indicated here some universities have a fixed ratio of how many professors do we need per student or how many students do we have per Professor okay or how many nurses in a company uh in in a hospital uh per per an amount of patients okay Trend analysis uh we had this example where we had a look at Revenue development in the past and we simply anticipate that the future going to be the same we look at the trend at the past and anticipate that in the future will be the same and from there we can tell the future demand the Italian restaurant example was about task analysis looking at the task analyze uh how much time the different tasks will require and from there we calculate um the workforce demand a final one is conclusion by analogy um if you really build a McDonald's restaurant on the creen field you not always start uh on scratch you know you you know it's it's it's it's we already have set up a lot of McDonald's restaurant we knew from the past uh from other cities how many people we need so probably we will need the same amount of people here yeah okay you just tell from other cases from other companies uh how many people you need okay most importantly I want you to understand the top three methods