QUESTION TWO (i)
Human resources forecasting involves projecting labor needs and the effects they’ll have on a business. Human Resource department forecasts both short and long term staffing needs based on projected sales, office growth, attrition and other factors that affect a company’s need for labor. Potential human resource requirement is to be estimated keeping in view of the organisation's plans over a given period of time. It involves estimating the future human resource requirement of right quality and right number.
Human Resource Forecasting provides Various benefits to the organisation like;
* Production and Scheduling
Human resource forecasting plans for labor needs change ...view middle of the document...
Your HR manager forecasts your personnel costs each year to help with your budgeting.
There are number of techniques for estimating or Forecasting Human Resource Demand such as;
* Managerial Judgement
* Work Study Technique
* Ratio trend Aanalysis
* Econometric Models
* Delphi Model
This happens when managers use their experience to forecast whether there is going to be deficiency or not.This is a very common and simple technique of Demand forecasting for Human Resource applied by both small and large organisations.The technique involves two approaches the bottom –up and top-down approach.Under the bottom-up approach line Managers send their departmental requirement of human resource to the top management.The top management then later on forecast the the human resource requirement for the entire organisation. But under Top-down approach top management forecast the human resource requirement for the entire organisation and various departments.The information is supplied to to various department heads for their review and approval. However in some scenarios there could be a combination of both approches which is called Participative approach, under this top management and departmental heads meet and decide about the future human resource requirement.
Work Study Technique
This technique is also known as 'work-load analysis'. This technique is suitable where the estimated work-load is easily measureable. Under this method, estimated total production and activities for a specific future period are predicted. This information is translated into number of man-hours required to produce per units taking into consideration the capability of the workforce. Past-experience of the management can help in translating the work-loads into number of man-hours required. Thus, demand of human resources is forecasted on the basis of estimated total production and contribution of each employee in producing each unit items. The following example gives clear idea about this technique.
Let us assume that the estimated production of an organisation is 3.00.000 units. The standard man-hours required to produce each unit are 2 hours. The past experiences show that the work ability of each employee in man-hours is 1500 hours per annum. The work-load and demand of human resources can be calculated as under:
* Estimated total annual production = 300000 units
* Standard man-hours needed to produce each unit = 2 hrs
* Estimated man-hours needed to meet estimated annual production (i x ii) = 600000 hrs
* Work ability/contribution per employee in terms of man-hour = 1500 units
* Estimated no. of workers needed (iii / iv) = 600000/1500 = 400 units
The above example clearly shows that 400 workers are needed for the year. Further, absenteeism rate, rate of labour turnover, resignations, deaths, machine break-down, strikes, power-failure etc should also be taken into consideration when forecasting.
Ratio Trend Analysis...