Walmart’s Human Resource Planning

Forecasting. Walmart’s human resource management forecasts its workforce needs to ensure
capacity to address changes in consumer demand. While other forecasting methods and
techniques are also used, these three are the most notable at Walmart:
1. Bottom-up approach
2. Trend analysis
3. Delphi method

The bottom-up approach analyzes human resource needs starting at the lowest level of the
organizational structure. Walmart’s human resource management objective for this approach is to
ensure that all levels of the organization have adequate employees based on HR needs at the
frontline (e.g. hourly sales employees). The company starts forecasting HR needs of frontline
employees. Walmart’s HR managers then proceed to analyze HR needs at the next higher level of
the organizational structure. This human resource management approach ensures that all human
resource needs at the lowest levels of Walmart’s organizational structure are supported through
an adequate number of employees at the upper levels of the organizational structure.

On the other hand, trend analysis is used in human resource management to predict future HR
needs based on current needs. For example, Walmart analyzes the series of recent HR changes
and uses this information to extrapolate future HR needs. A current trend that shows an increasing
demand for human resources indicates a larger workforce requirement in the future. Walmart’s
human resource management uses trend analysis to determine HR needs along with the
company’s global expansion.

In addition, the Delphi method forecasts future HR needs based on expert opinion. Walmart’s
human resource management uses the Delphi method to ensure adequate human resources in
establishing new brands, stores or other facilities. For example, HR experts can opine about the
HR needs in opening a new Walmart store of a certain size. The company’s human resource
management applies the Delphi method to estimate the number of employees needed in each
type of job, such as supply chain jobs, inventory jobs, and sales jobs.

Surplus & Shortage of Employees. Walmart faces minimal concerns about the shortage
of employees, especially sales personnel. The company receives a continuous influx of applicants
for sales positions. However, Walmart experiences HR surplus when aggregate consumption
declines. Such surplus is a challenge to human resource management because it translates to
lower HR cost-effectiveness. Walmart uses the following approaches to determine HR needs and
prevent surpluses or shortages:

1. Sales performance analysis

2. Turnover rate analysis
3. Gap analysis
Walmart’s human resource management changes recruitment efforts based on changes in sales
performance, which is an indicator of HR needs. Turnover is the rate at which Walmart’s human
resources leave and/or are replaced. Turnover, together with the rate of recruitment, is an
indicator of changes in the size of the company’s workforce. Walmart’s human resource
management ensures that the recruitment rate is commensurate to the turnover rate. If the
turnover rate is lower than the recruitment rate, Walmart’s workforce increases in size. An
increase in workforce size usually happens when the company expands or opens new stores. In
addition, Walmart’s human resource management uses gap analysis to determine the gap
between HR needs and actual HR capacity. A significant gap means reduced HR cost-
effectiveness or inadequacy in meeting organizational needs. Walmart uses gap analysis to
decide on changing recruitment efforts. The company has a gap allowance or threshold. When the
HR gap exceeds the threshold, Walmart’s human resource management increases or decreases
recruitment efforts. P.T.O.
Balancing Supply and Demand. Walmart balances HR supply and demand by
adjusting the compensation strategy and recruitment efforts. These adjustments are based on
trends in internal human resource demand and the rate of applicant entry. Thus, the firm’s human
resource management uses the following approaches to balance HR supply and demand:

1. Changes in recruitment
2. Changes in compensation

Changes in recruitment are Walmart’s main approach to balance HR supply and demand. The
company’s human resource management changes the recruitment rate to address workforce
requirements. Walmart can easily adjust its recruitment efforts without significantly impacting
financial performance. In prioritizing changes in recruitment to balance HR supply and demand,
Walmart’s human resource management minimizes changes in the firm’s compensation strategy.
On the other hand, changes in compensation are also used to prevent an imbalance in HR supply
and demand. Walmart’s compensation strategy is designed to minimize HR expenditure. This
strategy agrees with the company’s cost leadership generic strategy. When HR supply becomes
inadequate, Walmart’s last resort is to increase wages. Theoretically, higher wages attract more
applicants. Walmart’s human resource management uses this second approach to effectively
compete in the labor market.