HR FORECASTING

Types of HR forecasting activity Benefits of HR forecasting activity Personnel involved in HR forecasting activity Impact of environmental and organisational variables on HR forecasting activity Identify various stages in determining HR demand Policy & programme implementation of an HR deficit or HR surplus

Types of HR forecasting activity

Event Based

Forecasting Activity
Transaction Based Process Based

Types of HR forecasting activity

Event based- Forecasting concerned with changes in external environment Transaction based-Forecasting concerned with changes in internal environment Process based- Forecasting based on the flow or sequencing of several work activities

Benefits of HR forecasting activity

Reduces HR costs by curtailing last minute crisis Increases flexibility by giving more viable options Ensures a close linkage to macro business forecasting process Helps in concentrating on the organisational goals rather than contingency planning

Personnel involved in HR forecasting activity

Specialist

Managers/ Executive

Recruits

Designated group

Organisational Factors
Corporate mission statements Operational goals, production budgets HR policies Organisational Structure, restructuring, mergers Worker KSA/ competencies HRMS level of development Organisational culture, workforce climate and satisfaction Job analysis

External /Environmental Factors

Economic situation Labour market and unions Governmental laws and regulations Industry and Product life cycle Technological changes Competitor labour usage Global market for skilled labour Demographic changes

Types of forecast
Up to 1 year

Current
1 2 years

Short Run
2 5 years

Medium Run
More than 5 years

Long Run

Outcome Of Forecast
Prediction A single numerical estimate of HR requirements associated with a specific time horizon and set of assumption. Projection It incorporates several HR estimates based on variety of assumption

HR Forecasting Process
Identify organisational goals, objectives and plans Determine HR Demand Ascertain HR Supply Determine the net HR requirements

Develop HR plans and programs to ensure that the right people are in the right place

Determine HR Demand
Requirements of personnel by each subunit
These subunits are to be aggregated Planned future changes to be incorporated Replace non productive paid time State net HR demand State final cost estimate

Ascertain HR Supply
Two supply options-

Internal Supply
Current members of workforce who can be retained, promoted, transferred etc to fill anticipated HR requirements

External Supply
Potential employees who are currently undergoing training

Determine net HR requirement

HR demand = external supply+ internal supply or, HR demand- internal supply = external supply Where, External supply requirement = replacement +change supply Where, Replacement supply =hiring to replace all normal losses Change supply = hiring to increase (or decrease) the overall staffing level Thus, External supply = Current workforce size x (replacement % per year + change % per year )

Develop HR plans and programs to ensure that the right people are in the right place
When a forecast of HR demand is reconciled with the current workforce supply of personnel the result is net HR requirement. Disparity results intoHR deficit= HR demand >HR internal supply HR surplus= HR demand <HR internal supply

Remedial action for HR deficit and HR surplus

HR deficit oRecruitment oLaid off workers oRetired employees oTemporary workers HR surplus oLay off oTerminate employees with old skill set oJob sharing with less pay oReducing no. of shifts or hours oAttrition oHiring freeze oEarly retirement packages