Mamun Muztaba

AMC, BIM
The HR Forecasting
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



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HR Forecasting
HR Forecasting

............constitutes the heart of the HR
planning 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
HR Forecasting
HR Forecasting attempts
to determine the supply
and demand for various
types of human
resources, and to
predict areas within the
organization where
there will be labor
shortages or surpluses.

There are three major
steps to forecasting:

1. Forecasting the
demand for labor
2. Determining labor
supply
3. Determining labor
surpluses and
shortages

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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 various
employment 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.


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Benefits of HR
Forecasting

Reduces HR costs
Increases Organizational Flexibility
Ensures a Close Linkage to the Macro Business
Forecasting Process
Ensures that Organizational Requirements take
Precedence over Issues of Resource Constraint
and Scarcity


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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)
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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 of
focus for Hr forecasting.
2. Employment Equity- Designated Group
Membership
a) People of Aboriginal descent
b) Women
c) People with disabilities
d) Members of visible minorities

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Key Personnel analyses
Conducted by HR
Forecasters (cont.)
3. Managerial and Executive Personnel
To be successful, any organization must ensure that
its executives and managers possess the skills
required for success in their specific environmental
niche.
4. Recruits
The goal of HR forecasting is to obtain sufficient
numbers of trained personnel who will be able to
perform successfully in jobs when those jobs need
to be filled.
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Factors Affecting the HR
Forecasting Process
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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
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
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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 individuals
needed 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.

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Determining Net HR
Requirements (cont.)
Determine HR Demand Flowchart
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Corporate
HRD
F 4 F 1 F 2 F 3
S
e
n
d

2

H
R
D

Supply HR
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 goals
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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 all
organizational jobs, along with the numbers of employees
currently occupying those jobs and future employment
requirements
External Supply (potential employees not current working
for the company, includes University students, people
working for competitors, members of unions or professional
organizations, in a transitional stage, between jobs, or
unemployed)

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Determining Net HR
Requirements (cont.)
3. Determine Net HR Requirements
HR 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.
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Determining Net HR
Requirements (cont.)
2010 by Nelson Education Ltd. 17
Determining Net HR
Requirements (cont.)
2010 by Nelson Education Ltd. 18
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))

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Determining Net HR
Requirements (cont.)
HR Surplus = HR demand < HR internal
supply
(there is more than enough internal
supply of workers for the organization's
requirements, so there is no need to
look outside the company..

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HR Forecasting Time
Horizons
Current Forecast
Short-term Forecast
Medium-run Forecast
Long-run Forecast

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End of Session
Thank You