FORECASTING TECHNIQUES FOR MANPOWER PLANNING

Presented by: Dimple MBA-HR 3rd Sem

HR Forecasting requirementsMatch requirements (demand) & availabilities (supply), one of the main problems faced by an organization

Forecasting DemandMethods of ForecastingQualitative 2. Quantitative1.

Qualitative Forecasting Techniques1. Nominal Group

Group of 4-5 people present their views regarding labour forecasts all written down group discusses the information presented a final ballot is taken to determine its judgment. 2. Delphi Technique A facilitator solicits and collates written, expert opinions on labour forecasts a summary of the information is developed and distributed to the experts, who then submit revised forecasts. (Experts only communicate through the facilitator.)

3. Replacement Planning

Based on charting techniques, which identify current job incumbents and relevant information about each of them. Typically includes a brief assessment of performance and potential, age, length of time in current position, and overall length of service.

Quantitative Forecasting Techniques1. Managerial JudgmentManagers Sit together, discuss and arrive at a figure which would be the future demand for labor, Also involve Bottom Up Approach or top Down Approach

2. Work Study TechniqueUsed where it is possible to apply work force measurement to know how long operation should take and the amount of labor required it involves work load analysis and work force analysis

Work load analysis

It is a method that uses information about the actual content of work based on a job analysis of work. It use the ratios to determine HR requirement, Both the no. of employees and kind of employees required to achieve the organization goals are identified Work Force Analysis

Through this analysis one can calculate the labor turnover rate, absenteeism rate etc.

3.Statistical Techniques Regression Analysis

Fluctuations in labor levels are projected using relevant variables, such as sales. Ratio Analysis Fluctuations in labor levels are projected by isolating trend, seasonal, and cyclical effects. Economic Model Fluctuations in labor levels are projected using a specified form of the production function.

Example of demand forecastsy L&T company

follows bottom up approach and work study technique Process begins During November of every year y M&M company follows top down approach

SUPPLY FORECASTINGy Internal Supply Forecastingy Wastage the out-movement from the organization caused by voluntary

resignation, death or retirement. y Internal movement resulting from transfers and promotion.

y External Supply Forecastingy Recruitment

y Analysis of WastageLabor turnover index which expresses wastage as a percentage of staff in position, i.e.: Manpower leaving in a year Annual Manpower Wastage = v 100 Average manpower in positiony It takes no cognizance of the characteristics of manpower crucial

among them being the length of service and skill. y Also, it does not provide any meaningful indication for manpower planning.

y Stability Index

It measures the complement of wastage rate (i.e., rate of retention) as:Manpower with one or more year service at time t ------------------------------------------------------------------- v 100 Manpower in position at time t 1

An indicator of the proportion of staff who have been with the organization for a longer period and therefore reveals important information on the extent to which labour turnover is a problem specific to staff with shorter periods of service.

y Census MethodA snapshot of the total situation is taken at a particular point of time or over a short period of time and data on leavers with completed length of service is obtained. Then the proportion of manpower joining at a given point of time who will survive to a specified length of service is estimated.

Analysis of Internal Movements y Internal movements are of two types: y Vertical : promotion or demotion. y Horizontal : transfers.y Markov Chain Model

Estimation of transition probabilities relevant to each vertical and horizontal movement. Shows the percentage (and actual number) of employees who remain in each job from one year to the next, thus keeping track of the pattern of employee movements through various jobs. Thus this analysis results in a composite matrix of supply.

Reference:y Human Resource Management, K Awasthappa y Human Resource Management, T.N. Chhabra

y http://www.astd.com y http://www.thiagi.com