Factors Affecting Hr Forecasting 3x593c

The HR Forecasting

Mamun Muztaba AMC, BIM

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

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 4

HR Forecasting (cont.) After determining the demand for and supply of workers, the organization’s 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 organization’s 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 organization’s 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 hip a) People of Aboriginal descent b) Women c) People with disabilities d) of visible minorities 8

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. 9

Factors Affecting the HR Forecasting Process 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 10

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 Send 2 HRD

Corporate HRD

F1

F2

F3

Supply HR

F4

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Determining Net HR Requirements (cont.) 2. Ascertain HR Supply  Internal Supply (current 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 14

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, of unions or professional organizations, in a transitional stage, between jobs, or unemployed) 15

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. 16

Determining Net HR Requirements (cont.)

© 2010 by Nelson Education Ltd.

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Determining Net HR Requirements (cont.)

© 2010 by Nelson Education Ltd.

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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

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