HR Demand Forecasting - FACTORS AFFECTING - Techniques

(a) Managerial Judgement:

Managerial judgement technique is very common technique of demand forecasting. This approach is applied by small as well as large scale organisations. This technique involves two types of approaches i.e. 'bottom-up approach' and 'top-down approach'. Under the 'bottom-up approach', line mangers send their departmental requirement of human resources to top management. Top management ultimately forecasts the human resource requirement for the overall organisation on the basis of proposals of departmental heads. Under the Top-down approach', top management forecasts the human resource requirement for the entire organisation and various departments. This information is supplied to various departmental heads for their review and approval. However, a combination of both the approaches i.e. 'Participative Approach' should be applied for demand forecasting. Under this approach, top management and departmental heads meet and decide about the future human resource requirement. So, demand of human resources can be forecasted with unanimity under this approach.

(b) Work-Study Technique:

This technique is also known as 'work-load analysis'. This technique is suitable where the estimated work-load is easily measurable. 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 while estimating future demand of human resources/ manpower.

(e) Delphi Technique:

Delphi technique is also very important technique used for estimating demand of human resources. This technique takes into consideration human resources requirements given by a group of experts i.e. mangers. The human resource experts collect the manpower needs, summarizes the various responses and prepare a report. This process is continued until all experts agree on estimated human resources requirement.

(f) Other Techniques:

The other techniques of Human Resources demand forecasting are specified as under:

(a) Following the techniques of demand forecasting of human resources used by other similar organisations

(b) Organisation-cum-succession-charts

(c) Estimation based on techniques of production

(d) Estimates based on historical records

(e) Statistical techniques e.g. co-relation and regression analysis.