HR Demand

MGT 425: Manpower Planning and

Forecasting

BBA Program
BRAC Business School, BRAC University
HR DEMAND FORECASTING TECHNIQUES
1. Managerial Judgment
2. Trend Analysis
3. Ratio Analysis
4. Scatter Plot
5. Computerized Forecast
6. Work Study Technique
7. Delphi technique
8. Regression Analysis
9. Nominal Group Technique
10. Scenario Forecasting
11. Workforce Analysis
12. Workload Analysis
MANAGERIAL JUDGMENT

A technique in which managers sit together, discuss

and arrive at a figure which would be the future
demand for labor. The technique may involve a
‘bottom-to-top’ or ‘top-to-bottom’ approach.
TREND ANALYSIS

Forecast employment requirements on the basis of

some organizational index and is one of the most
commonly used approaches for projecting HR
demand. Steps of the trend analysis:
1. Select the appropriate Business/Operational
Index
2. Track the Business Index over time
3. Track the Workforce Size over time
4. Calculate the Average Ratio of the Business Index
to the Workforce Size
5. Calculate the Forecasting Demand for Labor
RATIO ANALYSIS

Another approach, Ratio analysis, means making

forecasts based on the ratio between.

1. Some causal factor (like sales volume)

2. The number of employees required

SCATTER PLOT

A graphical method used to help identify the

relationship between two variables. HR planner can
use scatter plots to determine whether two factors –
measure of business activity and staffing levels are
related.
COMPUTERIZED FORECAST

The determination of future staff needs by projecting a

firm’s sales, volume of production, and personnel
required to maintain this required volume of output,
using computers and software packages.
WORK STUDY TECHNIQUE

Work study technique is based on the volume of

operation and work efficiency of personnel. Volume of
operation is derived from the organizational plan
documents and increase/decrease in operation can be
measured.

Planned output
Standard output per hour x standard hours per person
DELPHI TECHNIQUE
This technique calls for a facilitator to solicit and collate
written, expert opinion on labor forecast. After answers
are received, a summary of the information is developed
and distributed to the expert, who are then requested to
submit revised forecast. Expert never meet face-to-face,
but rather communicate through the facilitator.
1. Define and Refine the Issues or Question
2. Identify the Experts, Terms, and Time Horizon
3. Orient the Experts
4. Issue the First-Round Questionnaire
5. Issue the First-Round Questionnaire Summary and
the Second Round of Questionnaires
6. Continue Issuing Questionnaires and come to the
final estimation
NOMINAL GROUP TECHNIQUE
The nominal group technique is a decision making method
for use among groups of many sizes, who want to make
their decision quickly, as by a vote, but want everyone’s
opinions taken into traditional voting.
1. Define and Refine the Issue or Question and the
Relevant Time Horizon
2. Select the Experts
3. Issue the HR Demand Statement to the Experts
4. Apply Expert Knowledge, State Assumptions, and
Prepare an Estimate
5. Meet Face to Face
6. Discuss the Demand Estimates and Assumptions
7. Vote Secretly to Determine the Expert Demand
Assessment
REGRESSION ANALYSIS
Regression analysis identifies the movement of two or
more inter-related series.
Used to measure the changes in a variable as a result
of changes in other variables. Regression analysis
determines the relationship between Y variables such
as the number of employees and X variables such as
service delivery by actually measuring the relationship
that existed in the past.
Use of the method begins with a series of observation
each consisting of a value for the X variable and a
corresponding value for Y variable.
SCENARIO FORECASTING

Scenario techniques is used to explore the likelihood of

possible future developments and changes and to
identify the interaction of uncertain future trends and
events.
1. Preparation of Background
2. Selection of Critical Indicators
3. Establishing Past Behavior of Indicators
4. Verification of Potential Future Events
5. Forecasting the indicators
6. Writing of scenarios
WORKFORCE ANALYSIS

It means, to determine the rate of in flow and out flow

of employee. It is through this analysis one can
calculate the labor turnover rate, absenteeism rate etc.
WORKLOAD ANALYSIS

It is a method that uses information about the

actual content of work based on a job analysis of
the work. Workload analysis involves use of ratios
to determine HR requirement. Both the number of
employees and the kind of employees required to
achieve organizational goals are identified.
JOB ANALYSIS

Job analysis helps in finding out the duties,

responsibilities, abilities and skills required to do the
jobs efficiently. A detailed study of jobs is usually
made to identify the qualification and experience
required for them.
 Discussion Questions
1. A number of quantitative and qualitative techniques
for forecasting human resources demand were
discussed in this chapter. Working in groups, identify
which strategies would be most appropriate for
(a) small versus large companies,
(b) industries undergoing rapid change,
(c)businesses/industries in which there are seasonal
variations in HR requirements.
2. Suppose that you are the HR manager at a firm at
which a hiring freeze has just been declared. The plan is
to downsize through attrition. What steps would you
take to ensure that you reap the advantages of this
strategy while minimizing the disadvantages?
 Discussion Questions
3. Suppose that it has just been projected that, because of a
number of technological innovations, your firm will need 20
percent fewer clerical employees within the next three years.
There are currently 120 clerical positions in the company,
split between three departments of equal size. Retirements
at this level are projected to be roughly 2 percent per year.
Annual voluntary turnover and involuntary turnover for
Department A is 2 percent and 5 percent, respectively;
Department B is 3 percent and 3 percent; and Department C
is 5 percent and 0 percent. Do you project a labor shortage or
surplus in the next three years for clerical positions? What
actions would you take in this situation?
4. Assume your organization has asked you to help facilitate a
nominal group technique. Who would you include in the
process and why? What materials might you need for this
process? What obstacles or challenges should you be careful
to avoid?
 Discussion Questions
5. Describe the costs associated with a lack of or
inadequate HRP.
6. You were recently asked to identify one employee
you manage as a top performer to align with a new
company program offering top performers intensive
management skills training. The employee you
identified for this role is unaware of the program. This
morning, she confided in you that she just applied for
graduate school and will find out if she has been
accepted five months from now, with the intent to start
the program one month after that. Would you change
the identification of who was the top performer in your
team based on this information? Why or why not?
End of Topic