Human Resource Forecasting

Human Resource is undoubtedly an important part of any organization. Hence, every organization must have the right number of the workforce at the right place and that too at the right time. In order to efficiently plan the workforce, the proper needs of human resource are very necessary.

For this, the company must go for Human Resource Forecasting. In this article, we will look at the various techniques of the Human Resource Forecasting.

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Techniques for Human Resource Forecasting

1. Managerial Judgement

Under this method, firstly experienced managers estimate the manpower requirements for their respective departments. This is done on the basis of their knowledge of expected future workload and employee efficiency. At last, the top management then aggregates and approves the departmental estimates. This is a very easy and time-saving method.

But it is quite subjective and is, therefore, suitable only for small firms. The assistance of work study, O&M, and human resource experts can refine the estimates based on experience. This method helps in judging the informal group norms on Human Resource Forecasting.

2.Work-study Method

This method uses time and motion study to analyze and measure work. Such studies help the managers to decide the standard time for per unit work. The following method shows this method:

Planned Output for next years	50,000 units
Standard hours per unit	2
Planned hours required	50,000 X 2
Productive hours per workers in the year	2,000
Number of workers required	1,00,000/2,000 = 50

If the span of control is ten, five (50/10) supervisor will supervise the work. When it is possible to measure work and set standards, the work-study method is more suitable for repetitive and manual jobs. Job method should not change frequently.

Browse more Topics under Human Resource Management

• Features of HRM
• Importance and Limitations of HRM
• Role of Personnel Manager
• Qualities of the HR Manager
• Managerial Functions of HR Manager
• Operative Functions of HR Manager
• Recruitment Process
• Selection Procedure
• Training and Development
• Methods of Training
• Performance Appraisal
• Traditional Methods of Appraisal
• Modern Methods of Appraisal

Learn the Qualities of HR Manager here in detail. 

3. Ratio- Trends Analysis

This method helps to calculate the ratios on the basis of past data. Firstly, it calculates the future ratios on the basis of the time series analysis/extrapolation, after making allowances for the changes in the organization, method, and jobs, if any.

Extrapolation is mathematical extensions of past data into the future time period. Moving averages and exponential smoothing can help for projections. The company estimates the demand for human resources on the basis of ratios.

4.Mathematical Models

A mathematical model shows the relationship between independent variables and the dependent variables. These models express various factors influencing manpower needs in the form of a formula.

There are several types of models, e.g., regression, optimization models, probabilistic models, etc. These are complex and suitable only for large organizations.
Future demand for human resources depends on several factors, some of which are given below:

(a) Employment Trends

By comparing and analyzing the staff during the past five years, the company can judge it’s trends in the manpower.

(b) Replacement Needs

These depend on firstly retirement, and then on death, resignation, and termination of employees. Its assessment is on the basis of past experience and retirement situation in the future.

(c) Productivity

Improvements in productivity effects manpower needs. better utilization of existing manpower is one method of securing gains in productivity. Automation and computerization is another method of productivity improvement. It will affect both the quantity and quality of manpower. Matching of skills with job requirements is the third method. Hence, Job analysis techniques are helpful in such a matching.

Solved Question on Human Resource Forecasting

Question: What is the ‘absenteeism’ as a mathematical model to do the Human Resource Forecasting?

Answer: Considering the prevailing rate of absenteeism in the company, it is quite important for estimating the demand of the manpower. The formula to do calculate the absenteeism rate under this method is:

Absenteeism = Man Days lost due to absenteeism/ Man days worked + Man days Lost

Hence, the company should take immediate and necessary steps in case the rate of absenteeism is high.