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Llnklng Lmployer's SLraLegy
Lo lans
Llnklng Lhe Company's SLraLeglc
lan Lo Lhe P8 lan
Human Resource Forecasting
Process of projecting the organization's
future HR needs (demand) and how it will
meet those needs (supply) under a given set
of assumptions about the organization's
policies and the environmental conditions in
which it operates.
Without forecasting cannot assess the
disparity between supply and demand nor
how effective an HR program is in reducing
the disparity.
orecasLlng as a arL of Puman 8esource lannlng
DLMAND
ICkLCAS1ING
SUL ICkLCAS1ING
ueLermlne
organlzaLlonal
ob[ecLlves
uemand
forecasL for
each
ob[ecLlve
AggregaLe
demand
forecasL
uoes aggregaLe
supply meeL
aggregaLe
demand?
Co Lo feaslblllLy analysls sLeps
Choose human
resource
programs
LxLernal programs
-8ecrulLlng
-LxLernal selecLlon
-LxecuLlve
exchange
lnLernal programs
-romoLlon
-1ransfer
-Career plannlng
-1ralnlng
-1urnover conLrol
lnLernal supply forecasL LxLernal supply forecasL
AggregaLe supply
forecasL
no
?es
1here are several Lechnlques use for
forecasLlng
1 Managerlal !udgmenL
2 1rend Analysls
3 8aLlo Analysls
4 ScaLLer loL
3 CompuLerlzed orecasL
6 Work SLudy 1echnlque
7 uelphl Lechnlque
8 8egresslon Analysls
9 LconomeLrlc Models
conL
10 nomlnal Croup 1echnlque
11 P 8 8udgeL and lannlng Analysls
12 Scenarlo orecasLlng
13 Workforce Analysls
14 Workload Analysls
13 !ob Analysls
emand Forecasting
nformation
Organizational and unit strategic
plans
Size of organization
Staff and Managerial Support
Organizational design
onsiderations in Establishing a
Forecasting System
How sophisticated
Appropriate time frame
Subjective versus objective
forecasting methods
System Sophistication
Organizational size
large organizations require more complex forecasting
systems and likely to have the required skilled staff
Organizational complexity
complex career paths and diverse skill requirements
lead to more complex forecasting systems
Organizational objectives
the greater the gap between current HR situation and
desired HR situation the more sophisticated the
system
Organizational plans and strategies
the complex the plans are the more complex the
forecasting system
Forecasting Time Frame
epends on degree of environmental
uncertainty
Factors creating uncertainty (shortening
time frame)
many new competitors, changes in technology,
changes in social, political and economic climate,
unstable product demand
Factors promoting stability (longer time
frame)
strong competitive position, slowly developing
technology, stable product demand.
Subjective VS. Objective Forecasting
Objective is inappropriate when:
Lack expertise to use objective methods
Lack the historical data or HR data base
is inadequate
Forecasting horizon is too long for the
available objective method
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Managerlal !udgmenL
1o modlfy forecasL based on facLors eg enLerlng
lnLo a new markeL
ulfflculL Lo Lake a longLerm perspecLlve when
markeL condlLlons change dramaLlcally
orecasLlng P8 needs
Managerlal !udgmenL
1hls Lechnlques ls very slmple ln Lhls manager slL
LogeLher dlscuss and arrlve aL a flgure whlch would
be Lhe fuLure demand for labor 1he Lechnlque may
lnvolve a 'boLLomLoLop' or 'LopLoboLLom'
approach
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orecasLlng P8 needs
1rend analysls
1he sLudy of a flrm's pasL employmenL needs
over a perlod of years Lo predlcL fuLure needs
8aLlo analysls
A forecasLlng Lechnlque for deLermlnlng fuLure
sLaff needs by uslng raLlos beLween a causal
facLor and Lhe number of employees needed
Assumes LhaL Lhe relaLlonshlp beLween Lhe
causal facLor and sLafflng needs ls consLanL
1rend Analysls
MeLhod whlch forecasL employmenLs requlremenLs
on Lhe basls of some organlzaLlonal lndex and ls one
of Lhe mosL commonly used approaches for
pro[ecLlng P8 demand
1 8uslness acLor Annual volume of Sales (nu)
2 1oLal number of Lmployees
3 Compare Lhe roducLlvlLy 8aLlo
4 CalculaLe Puman 8esources demand
3 orecasLed Puman 8esource 8equlremenLs
8aLlo Analysls
AnoLher approach 8aLlo analysls means maklng
forecasLs based on Lhe raLlo beLween
1 Some causal facLor (llke sales volume)
2 1he number of employees requlred
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orecasLlng P8 needs
ScaLLer ploL
A graphlcal meLhod used Lo help ldenLlfy Lhe
relaLlonshlp beLween Lwo varlables
Slze of PosplLal number of
(number of 8eds) 8eglsLered nurses
200 240
300 260
400 470
300 300
600 620
700 660
800 820
900 860
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ueLermlnlng Lhe
8elaLlonshlp 8eLween
PosplLal Slze and number
of nurses
Forecasting HR Needs
5cottet plot
ScaLLer loL
A graphlcal meLhod used Lo help ldenLlfy Lhe
relaLlonshlp beLween Lwo varlables A scaLLer ploL ls
anoLher opLlon P8 planner can use scaLLer ploLs Lo
deLermlne wheLher Lwo facLors measure of buslness
acLlvlLy and sLafflng levels are relaLed
CompuLerlzed orecasL
1he deLermlnaLlon of fuLure sLaff needs by pro[ecLlng a
flrm's sales volume of producLlon and personnel
requlred Lo malnLaln Lhls requlred volume of ouLpuL
uslng compuLers and sofLware packages Lmployers
also used compuLerlzed sysLem Lo personnel
requlremenLs
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CompuLerlzed forecasLs
1he use of sofLware packages Lo deLermlne of
fuLure sLaff needs by pro[ecLlng sales volume of
producLlon and personnel requlred Lo malnLaln
a volume of ouLpuL
CeneraLes flgures on average sLaff levels requlred Lo
meeL producL demands as well as forecasLs for dlrecL
labor lndlrecL sLaff and exempL sLaff
1yplcal meLrlcs dlrecL labor hours requlred Lo
produce one unlL of producL (a measure of
producLlvlLy) and Lhree sales pro[ecLlonsmlnlmum
maxlmum and probable
orecasLlng P8 needs
Work SLudy 1echnlque
Work sLudy Lechnlque ls based on Lhe volume operaLlon
and work efflclency of personnel volume of operaLlon
ls derlved from Lhe organlzaLlonal plan documenLs and
lncrease/decrease ln operaLlon can be measured
lanned ouLpuL
SLandard ouLpuL per hour x sLandard hours per person
nomlnal Croup 1echnlque
1he nomlnal group Lechnlque ls a declslon maklng
meLhod for use among groups of many slzes who
wanL Lo make Lhelr declslon qulckly as by a voLe buL
wanL everyone's oplnlons Laken lnLo LradlLlonal voLlng
l lnLroducLlon and LxplanaLlon
ll SllenL CeneraLlon of ldeas
lll Sharlng ldeas
lvCroup ulscusslon
v voLlng and 8anklng
uelphl 1echnlque
1hls Lechnlque calls for a faclllLaLor Lo sollclL and
collaLe wrlLLen experL oplnlon on labor forecasL AfLer
answer are recelved a summary of Lhe lnformaLlon ls
developed and dlsLrlbuLed Lo Lhe experL who are Lhan
requesLed Lo submlL revlsed forecasL LxperL never
meeL faceLoface buL raLher communlcaLe Lhrough
Lhe faclllLaLor
8egresslon Analysls
8egresslon analysls ldenLlfles Lhe movemenL of Lwo or
more lnLerrelaLed serles lL ls used Lo measure Lhe
changes ln a varlable as a resulL of changes ln oLher
varlables 8egresslon analysls deLermlnes Lhe
relaLlonshlp beLween ? varlables such as Lhe number
of employees and x varlables such as servlce dellvery
by acLually measurlng Lhe relaLlonshlp LhaL exlsLed ln
Lhe pasL use of Lhe meLhod beglns wlLh a serles of
observaLlon each cosLlng of a value for Lhe ? varlable
plus a value for each x varlable
LconomeLrlc Models
LconomeLrlc models for esLlmaLlon of manpower
requlremenL dlffer from Lhe sLaLlsLlcal meLhods asL
sLaLlsLlcal daLa are analyzed ln Lhe hope LhaL lL wlll
prove posslble Lo descrlbe preclsely Lhe
relaLlonshlps beLween a number of varlables ln
maLhemaLlcal and sLaLlsLlcal Lerms
P 8 8udgeL and lannlng Analysls
1here are several oLher ways by whlch planners can
esLlmaLe Lhe fuLure demand for human resources
Cne approach ls Lhrough budgeL and plannlng
analysls When new venLures compllcaLe
employmenL plannlng lanners can use newvenLure
analysls
Scenarlo orecasLlng
Scenarlo Lechnlques ls used Lo explore Lhe llkellhood of
posslble fuLure developmenLs and changes and Lo
ldenLlfy Lhe lnLeracLlon of uncerLaln fuLure Lrends and
evenLs
reparaLlon of 8ackground
SelecLlon of CrlLlcal lndlcaLors
LsLabllshlng asL 8ehavlor of lndlcaLors
verlflcaLlon of oLenLlal uLure LvenLs
orecasLlng Lhe lndlcaLors
WrlLlng of scenarlos
Workforce Analysls
lL means Lo deLermlne Lhe raLe of lnflux and ouL flow
of employee lL ls Lhrough Lhls analysls one can
calculaLe Lhe labor Lurnover raLe absenLeelsmraLe eLc
Workload Analysls
lL ls a meLhod LhaL uses lnformaLlon abouL Lhe
acLual conLenL of work based on a [ob analysls of
Lhe work Workload analysls lnvolves use of raLlos
Lo deLermlne P8 requlremenL 8oLh Lhe number of
employees and Lhe klnd of employees requlred Lo
achleve organlzaLlonal goals are ldenLlfled
!ob Analysls
!ob analysls helps ln flndlng ouL Lhe ablllLles or skllls
requlred Lo do Lhe [obs efflclenLly A deLalled sLudy
of [obs ls usually made Lo ldenLlfy Lhe quallflcaLlon
and experlence requlred for Lhem
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CuallflcaLlons lnvenLorles
Manual or compuLerlzed records llsLlng
employees' educaLlon career and
developmenL lnLeresLs languages speclal
skllls and so on Lo be used ln selecLlng lnslde
candldaLes for promoLlon
orecasLlng Lhe Supply of
lnslde CandldaLes
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Manual SysLem and 8eplacemenL CharL
ersonnel replacemenL charL
Company records showlng presenL performance
and promoLablllLy of lnslde candldaLes for Lhe mosL
lmporLanL poslLlons
oslLlon replacemenL card
A card prepared for each poslLlon ln a company Lo
show posslble replacemenL candldaLes and Lhelr
quallflcaLlons
orecasLlng Lhe Supply of
lnslde CandldaLes
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ManagemenL
8eplacemenL CharL
Showlng uevelopmenL
needs of uLure
ulvlslonal vlce
resldenL
anual System and Replacement Chart (cont'd)
Forecasting the Supply of
!nside Candidates
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CompuLerlzed lnformaLlon SysLems
Puman 8esource lnformaLlon SysLem (P8lS)
CompuLerlzed lnvenLory of lnformaLlon LhaL can be
accessed Lo deLermlne employees' background
experlence and skllls LhaL may lnclude
Work experlence codes
roducL or servlce knowledge
lndusLry experlence
ormal educaLlon
orecasLlng Lhe Supply of
lnslde CandldaLes