The case

The QueenswoOD Division of the International Aerospace Corporation is engaged in the design and manufacture of Type IA 104, a subsonic transport AIrcraft with a number of unusual features. It participated in the design with European members of the corporation and is responsible for the construction of the fuselage, including the tail plane. Two prototypes have been completed and the flight test programme is well advanced. Simultaneously, a comprehensive series of laboratory tests is BEIng carried out. The result of the test programme has been a large number of design modifications. The impact of these modifications tends to be on the final fuselage assembly stage, although they also affect the sub-assembly and detail fitting work at earlier stages.

Queenswood is building 55 fuselages. The main build programme has been phased over four years, although there will be further work on final modifications in the fifth year. Work has almost been completed on 10 fuselages, though these will have to be modified in the light of the test results. The programme for the remaining 45 has been prepared.

There is currently a fair amount of production work on other smaller projects, most of which is likely to be phased out over the next tHRee or four years.

Projections of workforce requirements for the manufacture and modification of the 55 fuselages have been prepared by the production planning department. They were based on assumptions of the hours required to complete each stage of the fuselage build. The projections extend over the five-year building programme and cover the main production areas, namely the tool room, the machine shops, the sub-assembly departments and the final assembly department. The workforce projections differentiated between the main departments, although sub-assembly and final assembly fitters are usually interchangeable. Detail fitters are more specialized.

The forecasts of requirements for skilled fitters in the detail and assembly shops are shown below.

Skilled fitters – five year projections

These projections were given to the hr manager responsible for resourcing. He made five further calculations:

1. Deficits or surpluses of fitters on the IA104 project, comparing current year’s requirements with the number available in the previous year, assuming that the projected requirements had been satisfied in the previous year.

2. Surpluses of skilled fitters on other projects.

3. Overall net deficits and surpluses, taking into account projections for both IA 104 and other projects.

4. The projected reduction through labour wastage in the total number of fitters required in both the IA104 project and the other projects, assuming all requirements have been met and using the following current annual labour turnover figures:

final assembly: 32 per cent;

sub-assembly: 14 per cent;

detail: 11 per cent.

5. Overall net deficits or surpluses as calculated above, having allowed for wastage.

The outcome of these calculations is shown in the table below.

Skilled fitters – forecast deficits and surpluses

The task

As the HR Manager, decide what should be done about these forecasts.


Long-term projections of this kind can only give a broad indication of the likely trend of events. Over-elaborate analysis, and this one is tending in this direction, will produce theoretical results that will almost certainly be confounded when, inevitably, the assumptions upon which the planners based their forecast change.

At Queenswood, the projections rely on four major assumptions:

1. That the production tiMetable will be achieved. But the ominous information from the initial test programme – that there will be a number of design modifications – suggests delays are likely.

2. That the planners’ estimates of production hours are accurate. But BATch production time accuracy is difficult to achieve, especially when design changes are probable.

3. That the production programme for other projects will be maintained. But it is difficult to forecast demand in an industry such as aerospace, which is so dependent on government policies (more than one government in this case) and on specific orders for highly distinctive products, and which is invoLVed in batch production. Demand forecasts in mass production consumer goods industries can be much more accurate, though even they will be affected by unforeseeable changes in taste, purchasing power and competition.

4. That the labour turnover figure will remain constant. But this is unlikely to happen, especially if management takes action to improve retention rates.

These problems illustrate the considerable influence of contextual factors in workforce planning.

However, long-range forecasts in the context of this case are not completely invalidated. The figures have simply to be treated with caution and further analysis of the raw data is always fruitful if only to alert management to potential problems that can be dealt with in good time as updated forecasts become available. Workforce planning is a continuous exercise. The picture is always changing, and workforce planners must keep closely in touch with those who produce the basic data on activity levels as well as labour supply and demand factors.

At Queenswood there are a number of things the HR manager can usefully do with the raw figures. First, he can identify the stress points by analysing the overall impact of deficits and surpluses. This would result in the following figures:

result in the following figures

Assuming some interchangeability between assembly and detail fitters, these figures show that there are serious deficits in the first two years and a big surplus in year five. To deal with the large intake of fitters required in the next two years it is necessary to study the availability of skilled labour locally and nationally in order to plan a recruiting campaign. Plans also need to be made to keep more detailed fitters employed or to obtain additional sub-contract work. The importance of securing extra contracts to secure the employment of fitters from year five onwards would need to be stressed.

Recruitment may not be the only answer. The numbers required are considerable and the turnover of fitters imported from elsewhere is likely to be high. The possibility of reallocating work at present classified as skilled to semi-skilled fitters could be investigated. This could raise problems with the union, but if these can be overcome, which experience has shown can be done, it might be possible to locally recruit semi-skilled fitters, even unskilled people with potential, the supply of whom is more assured, and give them specialized training in the company’s basic training workshop. This means that precise specifications would have to be produced of the sort of people who are likely to complete training successfully and achieve the standards required quickly. Aptitude tests would have to be obtained, developed and validated to guide selection decisions.

The fluctuating nature of the demand in different departments suggests that requests from managers for additional workers should be vetted carefully. There is a natural tendency for line managers to go on recruiting to meet present demands, without regard to problems of surplus people and without considering reallocating people or transferring them between departments. In these circumstances, HR has a duty to monitor requests for people to ensure that management takes account of these points.

The labour turnover figures upon which the forecasts are based need more careful analysis. There is obviously an acute problem in the final assembly department, where the average rate of 32 per cent is more than twice as high as in the sub-assembly shop. The possible causes of high turnover need to be identified by conducting leaving interviews and other studies. One possible reason for high turnover in final assembly is that this is the area where expansion has been most rapid, resulting in a high proportion of people recruited from other parts of the country who may have experienced housing and separation difficulties. Survival rate analysis should show the true picture.

Another possible reason for higher turnover in final assembly is the different pattern of production there compared with the two other departments. Final assembly is at the end of the line. Delays and mistakes made at earlier stages accumulate there. Modifications are likely to have most impact during the final assembly programme. The result will be unstable conditions of work, fluctuating bonus earnings (particularly difficult for those living away from home) and frustration all round. The environment in the sub-assembly and detail shops is likely to be more stable, which will increase the probability of retaining people. If investigations confirm that these are important factors in increasing turnover, then consideration can be given to reducing instability in final assembly or amending the bonus scheme to smooth out unpredictable fluctuations.

Thus, although the projections of requirements cannot be treated as if they were engraved on tablets of stone, they can at least form the basis for a revealing analysis that should point the way to action. This case, which is based on an actual situation, therefore illustrates how HR can and should be aware of the impact of business and operational matters in order to provide strategic advice on how these affect crucial HR practices (eg delivering the skilled people required to meet business and production targets) and what should be done to improve them.