HR Demand Forecasting

HR Demand Forecasting

Demand forecasting is a quantitative aspect of human resource planning. It is the process of estimating the future requirement of human resources of all kinds and types of the organization.

The basis of the forecast must be the annual budget and long-term corporate plan, translated into activity levels for each function and department.

What is HR?Demand Forecasting?

HR?Demand forecasting must consider several factors-both?external well as internal. Among the?external factors?are competition (foreign and domestic), economic climate, laws and regulatory bodies, changes in technology, and social factors. Internal factors include budget constraints, production levels, new products and services, organizational structure, and employee separations. Demand forecasting is common among organizations, though they may not do personnel-supply forecasting.

Forecasting of demand for human resources depends on certain factors such as:

·?????Employment trend and future needs.

·?????Replacement needs due to retirement, death, resignation, termination etc.

·?????Improvement in productivity.

·?????Expansion of the organization.

Methods of Demand Forecasting:

Executive Judgment: Under this method, the executives sit together and determine the future manpower requirements of the enterprise and submit the proposal to the top management for approval. This approach is known as the ‘bottom-up" approach.

Workload Forecasting: Under this method the stock of workload and the continuity of operations are determined. Accordingly, the labor requirement is determined.?

·?????Statistical Techniques

  1. Ratio Trends Analysis
  2. Bureks Smith Model
  3. Regression Analysis
  4. Delphi Technique
  5. Flow Models

LET’S UNDERSTAND THE DEMAND FORECASTING OF OUR ORGANIZATION:

We will use Workload Forecasting to understand the demand of the organization.

With this method the stock of workload and the continuity of operations are determined. The working capacity of each employee is calculated in terms of man-hours. Man-hours required for each unit are calculated and then the number of required employees is calculated.

Planned Project Duration = 2 years / 24 Months (a)

Planned Project Duration in Hours = 187200 hrs. (b)

Standard man-hours required for each Day= 8 Hours (c)

Planned man-hour needed for the year (b / 2) = 93600 hrs. (d)

Planned annual contribution of an employee = 2500 hrs.(e)

No. of employees required:

(d/e) = 93600/2500 = 38 Apx

Reasons to Conduct Demand Forecasting

There are several good reasons to conduct demand forecasting. It can help:

(i) quantify the jobs necessary for producing a given number of goods, or offering a given amount of services

(ii) determine what staff-mix is desirable in the future

(iii) assess appropriate staffing levels in different parts of the organization so as to avoid unnecessary costs.

(iv) prevent shortages of people where and when they are needed most; and

(v) monitor compliance with legal requirements with regard to reservation of jobs.

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