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Mamun Muztaba

AMC, BIM

The HR Forecasting

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Objectives of this

Session

After compilation of this session we will know -

HR Forecasting

Benefits of HR Forecasting Forecasting Activity Categories

Key Personnel analyses Conducted by HR

Forecasters

Factors Affecting the HR Forecasting Process

Determining Net HR Requirements

HR Forecasting Time Horizons

2

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HR Forecasting

HR Forecasting

............constitutes the heart of the HRplanning process and can be defined as

ascertaining the net requirement for personnel by

determining the demand for and supply of human

resources now and in the future

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HR Forecasting

HR Forecast ingattempts

to determine the supply

and demand for varioustypes of human

resources, and to

predict areas within the

organization wherethere will be labor

shortages or surpluses.

There are three major

steps to forecasting:

1.Forecasting the

demand for labor

2.Determining labor

supply3.Determining labor

surpluses and

shortages4

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HR Forecasting

(cont.)

After determining the demand for and supply of

workers, the organizations HR staff develop

specific programs to reconcile the difference

between the requirement for labours in variousemployment categories and its availability, both

internally and in organizations environment.

Programs in such areas as Training and

Development, Career Planning, Recruitment and

Selection, Managerial Appraisal, and so on are all

stimulated by means of the HR forecasting process. 5

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Benefits of HR

Forecasting

Reduces HR costs

Increases Organizational Flexibility

Ensures a Close Linkage to the Macro BusinessForecasting Process

Ensures that Organizational Requirements take

Precedence over Issues of Resource Constraintand Scarcity

6

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Forecasting Activity

Categories

Transaction-based Forecasting

forecasting that focuses on tracking internal change

instituted by the organizations managers.

Event-based Forecasting

forecasting concerned with changes in the external

environment.

Process-based Forecasting

forecasting not focused on a specific internal

organizational event but on the flow or sequencing of several

work activities (e.g. Warehousing shipping process) 7

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Key Personnel analyses

Conducted by HR

Forecasters

1. Specialist/ Technical/ Professional Personnel

Workers holding trade qualifications that are in high

demand or that require lengthy preparatory training for

attainment of skill competency constitute a key area offocus for Hr forecasting.

2. Employment Equity- Designated Group

Membershipa) People of Aboriginal descent

b) Women

c) People with disabilities

d) Members of visible minorities 8

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Factors Affecting the HR

Forecasting Process

10

Internal/Organizational

Corporate mission statement, strategic goals

Operational goals, production budgets

HR policies (e.g. compensation, succession)

Organizational structure, restructuring, mergers, etc

Worker KSAs/competencies and expectations

HRMS level of development

Organizational culture, workforce climate and satisfaction

and internal communications

Job analysis: workforce coverage, current data

F t Aff ti th HR

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Factors Affecting the HR

Forecasting Process

(cont.)

External/Environmental

Economic situation

Labour markets and unions

Governmental laws and regulations

Industry and product life cycles

Technological changes

Competitor labour usage

Global market for skilled labour

Demographic changes 11

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Determining Net HR

Requirements

1. Determine HR Demand

- In determining demand, a variety of factors have to be

considered. First, each organizational sub-unit has to

submit its net personnel to the corporate forecasting unit,based on future needs for labour required to meet the

agreed-on corporate and sub-unit objectives (market

share, production levels, size or expansion, etc.)

- This HR demand figure must incorporate the individualsneeded to maintain or replace the current personnel who

retire, die, are fired or otherwise terminated, or take long

leaves (disability, training course, etc) as well as the

replacement for individuals who are promoted or

transferred out of the department. 12

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Determining Net HR

Requirements (cont.)

Determine HR Demand Flowchart

13

Corporate

HRD

F 4F 1 F 2 F 3

Send2H

RD

Supply HR

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Determining Net HR

Requirements (cont.)

2. Ascertain HR Supply

Internal Supply (current members of the organizational workforce)

Internal supply can identify in various ways

- HR Inventory- Replacement Chart

- Staffing tables/ Manning Chart

HR INVENTORY 2 types

Skills inventory: describes the skills & knowledge of non-managerial

employees & is used primarily for making placement & promotion

decisions

Management inventory: contains the same information as in skills

inventory, but only for managerial employees which describes the

work history, strengths, weaknesses, promotion potential, career goals14

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Replacement Chart that helps us derive the profile of job

holders, department wise and reveals those who could be

used as replacements whenever the need arises.

Manning chart is the pictorial representations of allorganizational jobs, along with the numbers of employees

currently occupying those jobs and future employment

requirements

External Supp ly (potential employees not current workingfor the company, includes University students, people

working for competitors, members of unions or professional

organizations, in a transitional stage, between jobs, or

unemployed)15

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Determining Net HR

Requirements (cont.)

3. Determine Net HR RequirementsHR Demand = external supply + internal supply

HR Demand - internal supply = External Supply

External supply requirements = replacement + change

supply components

Replacement supply= hiring to replace all normal losses

(Normal losses are: retirement, termination, voluntary turnover,

promotions, transfer, and leaves)

Change supply = hiring to increase/decrease the overall

staffing levels. 16

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Determining Net HR

Requirements (cont.)

2010 by Nelson Education Ltd. 17

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Determining Net HR

Requirements (cont.)

2010 by Nelson Education Ltd. 18

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Determining Net HR

Requirements (cont.)

4. Institute HR Programs: HR Deficit and HR

Surplus

HR Deficit = HR demand > HR internal

supply

(forecasted HR demand requirements cannot

be fulfilled based on the current

organizational workforce, so policies need to

be developed to focus on external

applicants)) 19

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Determining Net HR

Requirements (cont.)

HR Surplus = HR demand < HR internal

supply

(there is more than enough internalsupply of workers for the organization's

requirements, so there is no need to

look outside the company..

20

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HR Forecasting Time

Horizons

Current Forecast

Short-term Forecast

Medium-run Forecast

Long-run Forecast

21

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End of Session

Thank You