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HR Forecusting

The document discusses the HR forecasting process. It defines HR forecasting as ascertaining future personnel needs based on demand and supply factors. The benefits include reduced costs, flexibility, and alignment with business goals. Forecasters analyze different personnel types and factors like the economy, laws and technology. Forecasts have time horizons from current to long-term. The process determines demand, internal and external supply, then develops programs to meet net requirements through attrition, hiring or job sharing.

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Md. Faisal Bari
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52 views

HR Forecusting

The document discusses the HR forecasting process. It defines HR forecasting as ascertaining future personnel needs based on demand and supply factors. The benefits include reduced costs, flexibility, and alignment with business goals. Forecasters analyze different personnel types and factors like the economy, laws and technology. Forecasts have time horizons from current to long-term. The process determines demand, internal and external supply, then develops programs to meet net requirements through attrition, hiring or job sharing.

Uploaded by

Md. Faisal Bari
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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The HR Forecasting

Process
Issues to be covered
• Meaning of HR Forecasting
• Forecasting Activity Categories
• Benefits of HR Forecasting
• Key personnel analyses conducted by HR
forecasters
• Environmental and organizational factors
affecting HR forecasting
• HR forecasting time horizons
• Process of Determining net HR requirements
HR Forecasting

• Ascertaining the net requirement for


personnel by determining the demand for and
supply of human resources now and in the
future.
Forecasting Activity Categories

1.Transaction–based forecasting: Focuses on tracking


internal change instituted by the organization’s
managers.

2. Event-based forecasting: Concerned with the changes


in the external environment.

3. Process-based forecasting: Focuses on the flow or


sequencing of several work activities (e.g. the
warehousing shipping process).
Benefits of HR Forecasting

1. Reduces HR Costs: By taking a long-run HR


forecasting to avoid costly last-minute crisis in
labor market.
2. Increases organizational flexibility: HR
forecasting is predicated on trends, assumptions,
scenarios to encourage the development of a
wide range of possible policy options to enhance
organizational flexibility.
3. Ensures a close linkage to the macro business
forecasting process: by helping the senior
management to ensure that the top
decision-makers in the organization are aware of
key HR issues and constraints that might affect
organizational plans for success and ensure the
HR objectives are closely aligned with the
organization’s operational objectives.

4. Ensures that organizational requirements take


precedence over issues of resource constraint
and scarcity by calculating HR demand and
supply.
Key Personnel Analyses Conducted
by HR forecasters

1. Specialist/Technical/Professional personnel
2. Employee equity-designated group
membership
– Aboriginal descent, women, people with
disabilities, members of visible minorities
3. Managerial and executive personnel
4. Recruits
Forecasting Process
1. Identify organizational goals, objectives, and
plans.
2. Determine overall demand requirements for
personnel.
3. Assess in-house skills and other internal supply
characteristics.
4. Determine the net demand requirements that
must be met from external, environmental
supply forces.
5. Develop HR plans and programs to ensure that
the right people are in the right place.
Environmental and Organizational
Factors Affecting HR Forecasting
• Organizational/ Internal Factors: • External/environmental factors:
– Corporate mission statement , – Economic situation
strategic goals. – Labor markets and unions
– Operational goals, production – Governmental laws and
budgets regulations
– HR policies – Industry and product life cycles
– Organizational structure, – Technological changes
restructuring. Mergers etc. – Competitor labor usage
– Workers KSAs/competencies and – Global market for skilled labor
expectations
– Demographic changes
– HRMS level of development
– Organizational culture, workforce
climate, satisfaction and internal
communications
– Job analysis: workforce coverage,
current data
HR Forecasting Time Horizons
• Current forecast:
– Used to meet the immediate operational needs of the organization.
– Timeframe considered maximum 1 year or up to the end of current
operating cycle.

• Short-run forecast:
– Extends forward from the current forecast and states the HR
requirements for the next 1-2 year period.

• Medium-run forecast:
– Identifies requirements for 2-5 years into the future

• Long-run forecast:
– Statement of probable requirements given a set of current
assumptions.
– Extends 5 or more years ahead of the current operational period.
Process of Determining Net HR
Requirements
Step 1: Determine HR demand
• In determining demand a variety of factors have to be considered:
– Each organizational subunit has to submit its net personnel requirement to the
corporate forecasting unit
– Planned future changes in organizational design or in restructuring with their
associated increases in staffing levels, must be incorporated into the equation to
revise the aggregated net departmental demand requirements.
– Forecasters have to consider how to replace non productive paid time…for
example..(vacation and sick days) either by increasing demand for full or part time
personnel or perhaps by using overtime with the existing set of current employees
– Consideration of all these issues leads us to the net HR demand

Step 2: Ascertain HR Supply


• There are two supply options:
– Internal supply: refers to current members of the organizational workforce who
can be retrained, promoted, transferred etc. to fill anticipated future HR
requirements.
– External supply: refers to potential employees who are currently undergoing
training ..eg..university students or working for competitors or who are members
of unions or professional associations or currently are in a transitional state
between jobs or unemployed
Step 3: Determine Net HR requirements
• From step 1 and 2 we get:
HR Demand = external supply + Internal supply
HR Demand-internal supply = external supply
• If internal source is not sufficient to fill the HR demand external
source comes into play
External supply requirements = replacement + change supply
components

Replacement supply = Hiring to replace all normal losses (retirements,


termination, voluntary turnover, promotions, transfers and leaves)

Change supply = hiring to increase or decrease the overall staffing


level
• External Supply = current workforce size × (replacement % per
year+ change % per year)
• HR surplus occurs when the internal workforce supply exceeds the
organization’s requirement or demand for personnel.
Step 4: Institute HR Programs: HR deficit and HR surplus
• Reconciliation of HR demand with HR supply results in
net HR requirement. Which may be either HR surplus
or HR deficit or a parity.
– HR deficit = HR demand>HR internal supply
– HR surplus = HR demand<HR internal supply

• Job sharing occurs when two or more employees


perform the duties of one full-time position, each
sharing the work activities on a part time basis.

• Attrition is the process of reducing an HR surplus by


allowing the size of the workforce to decline naturally
because of the normal pattern of losses associated
with retirements, deaths, voluntary turnover etc.

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