This document discusses human resource planning and forecasting techniques. It defines HRP as determining manpower requirements and meeting those needs to carry out organizational plans. Key points made include:
- Workforce planning involves comparing current and future staffing needs based on business plans and the external environment.
- Qualitative and quantitative forecasting methods are described, such as the Delphi technique, nominal group technique, trend analysis, and computer models.
- Forecasting helps ensure adequate staffing levels and identifies gaps to address through training or external hiring. Maintaining records of current staff skills aids internal forecasting.
This document discusses human resource planning and forecasting techniques. It defines HRP as determining manpower requirements and meeting those needs to carry out organizational plans. Key points made include:
- Workforce planning involves comparing current and future staffing needs based on business plans and the external environment.
- Qualitative and quantitative forecasting methods are described, such as the Delphi technique, nominal group technique, trend analysis, and computer models.
- Forecasting helps ensure adequate staffing levels and identifies gaps to address through training or external hiring. Maintaining records of current staff skills aids internal forecasting.
This document discusses human resource planning and forecasting techniques. It defines HRP as determining manpower requirements and meeting those needs to carry out organizational plans. Key points made include:
- Workforce planning involves comparing current and future staffing needs based on business plans and the external environment.
- Qualitative and quantitative forecasting methods are described, such as the Delphi technique, nominal group technique, trend analysis, and computer models.
- Forecasting helps ensure adequate staffing levels and identifies gaps to address through training or external hiring. Maintaining records of current staff skills aids internal forecasting.
This document discusses human resource planning and forecasting techniques. It defines HRP as determining manpower requirements and meeting those needs to carry out organizational plans. Key points made include:
- Workforce planning involves comparing current and future staffing needs based on business plans and the external environment.
- Qualitative and quantitative forecasting methods are described, such as the Delphi technique, nominal group technique, trend analysis, and computer models.
- Forecasting helps ensure adequate staffing levels and identifies gaps to address through training or external hiring. Maintaining records of current staff skills aids internal forecasting.
HR Planning Human Resource Planning Meaning HRP is the process of determining manpower requirements and the means for meeting those requirements in order to carry out the integrated plan of the organisation.
Workforce Planning: 1. Future Requirements based on Business Plans and External Environment vs. Present Workforce Data: to understand changes required in size and structure of the organization 2. Makes Demand vs. Supply Projections: number and skills 3. Identifies Specific Plans for filling gaps: such as through training, promotion, job posting or external recruitment Human Resource Planning Need • Helps in detailing the number and kind of personnel required for carrying out the operations • Gives adequate lead time for recruitment, selection, training and development of personnel • Helps in reducing cost of production as labour can be effectively controlled & utilised • Helps in detecting surplus or shortage of manpower • Is essential to make training and development programmes more effective • Helps in internal succession of key personnel FIGURE 5–2 Linking Employer’s Strategy to Plans Forecasting HR Requirements • Environmental scanning – economic, political, social, legal and technological environments help in ascertaining the future structure and size of the organization and types of skill sets required, and availability of personnel etc. • Internal Scanning – takes into consideration factors such as how many personnel are already available with what skills, who can be promoted to higher levels, what will be predictable turnover levels due to retirement, death, resignations, dismissals etc. • Forecast/Estimate future HR requirements regarding: - Functional category – functions, department or division level - Number and skills required - Levels at which they are required – junior, middle, lower level Techniques of Forecasting Demand for Employees
1. Qualitative Methods 2. Quantitative Methods
a. Expert Committee Estimate: a. Trend Analysis i. Simple long-run trend i. Delphi technique projection/analysis ii. Nominal group technique ii. Regression analysis (NGT) b. Scatter plot iii. Averaging of forecasts made c. Simulation models by individual experts d. Ratio analysis b. Sales force estimate based on e. Computerised systems demand of products by sales personnel c. Unit-demand forecasting by the unit manager or at the departmental level or the leader of the project team on a person-by-person or job-by job basis for present as well as future. It is followed by improving estimates by the HR exec responsible for forecasting requirement * Qualitative Methods i. Delphi Technique • Structured approach for getting a number of experts to comment on a specific issue • Facilitates group decision making • Does not allow face-to-face interaction to avoid difference of opinions and conflicts that may arise due to differences in hierarchical levels • Experts who can analyze internal as well as external factors affecting business are selected • Can be first line supervisors or top-level managers, or may be roped in from outside Process: • Questionnaires are administered by the moderator to gather information and insights from a panel of experts who remain anonymous to decision- makers • Intermediary pools and summarizes the information received • Experts are given feedback about information received • Chance to revise forecast is given to experts • Experts are asked reasons for their forecast • Process repeated until satisfactory opinions are identified Guidelines for using Delphi Method effectively • Experts should be given enough information to make a judgment • Exercise should be kept simple • Experts should be given an opportunity to explain how sure they are of forecasted figures • Top management and panel of experts should be made aware of importance of Delphi process in forecasting
Limitations of the Method
• Time-consuming and expensive process
ii. Nominal Group Technique
• Experts can either be from within the organization or outside, having knowledge of the subject • Permits face-to-face discussion • Group members read their ideas produced during an individual brainstorming session aloud to the moderator • Each idea is discussed solely for the purposes of gathering information rather than debate • Consensus is reached through discussion • Faster than Delphi technique * Quantitative Methods Trend analysis i. Simple long-run trend projection/analysis • Study of an organization’s past employment levels over period of years to forecast future manpower requirements • can provide an initial estimate of future staffing needs, but employment levels rarely depend just on the passage of time. • Other factors (like changes in technology and productivity) also affect staffing needs. ii. Regression Analysis • Predictive modelling technique that investigates the relationship between a dependent (y) and an independent (x) variable • Through the technique, one can estimate or predict the unknown values of one variable (y) from the known values of another variable • For example, no. of employees to be recruited each year (y) according to the projected sales (x) • Scatter plot • shows graphically how two variables—such as sales and firm’s staffing levels—are related. • If they are, and then if you can forecast the business activity (like sales), you should also be able to estimate your personnel needs.
Hospital Size Number of
(Number Registered of Beds) Nurses 200 240 300 260 400 470 500 500 600 620 700 660 800 820 FIGURE 5–2 Determining the Relationship Between 900 860 Hospital Size and Number of Nurses FIGURE 5–2 Determining the Relationship Between Hospital Size and Number of Nurses
Note: After fitting the line,
you can project how many employees are needed, given your projected volume. • Simulation Models • Use probabilities of future events to estimate future employment levels • Models make assumptions about the future regarding both the internal and external environment • It is a complicated method and involves lot of costs • Ratio analysis • provides forecasts based on the historical ratio between (1) some causal factor (like sales volume) and (2) the number of employees required (such as number of sales people). Example: suppose, to generate Rs. 3,20,000 worth sales, 8 sales person are required, i.e. each sales person makes a sales worth Rs. 40,000/- How many more people will be required to generate an additional sales of Rs. 1,60,000? Ans = 4 people • Computerized Forecasts • Computerized forecasts enable the manager to build more variables into his or her personnel projections • Newer systems particularly rely on mathematically setting clear goals • Software that estimates future staffing needs by: • Projecting sales, volume of production, and personnel required to maintain different volumes of output. • Creating metrics for direct labor hours and three sales projection scenarios—minimum, maximum, and probable. Drawbacks of Traditional Forecasting Techniques • They focus on projections and historical relationships. • They do not consider the impact of strategic initiatives on future staffing levels. • They support compensation plans that reward managers for managing ever-larger staffs. • They “bake in” the idea that staff increases are inevitable. • They validate and institutionalize present planning processes and the usual ways of doing things. Forecasting the Supply of Human Resources
1. Forecasting the Supply of Internal Candidates
Depending on the size, status and complexity of the organisation, the data of internal candidates can be maintained through anyone or more than one of the following systems: • Manual records • Personnel replacement charts • Skills inventory • Computerised information systems
2. Forecasting the Supply of External Candidates
For it, the organisation has to anticipate local labour market conditions, general economic conditions and so on. Forecasting the Supply of Internal Candidates
• Manual records of:
• employees’ education • Company sponsored courses taken • career and development interests • Languages an employee can speak or write • Desired assignments • special skills, and so on, to be used in selecting inside candidates for filling projected openings.
• Personnel replacement charts
• Company records showing present performance and promotability of inside candidates for the most important positions, usually firm’s top positions. (FIGURE on next slide) • Components of Skill Inventory • Computerized skills inventories • In case organization is big and employs hundreds and thousands of personnel, it is not possible to work with manual systems. In this case the data are tracked and stored on the system using software. • Includes items like • work experience codes • product knowledge • the employee’s level of familiarity with the employer’s product lines or services • the person’s industry experience, formal education, foreign language skills, relocation limitations, career interests, and performance appraisals. 2. Forecasting the Supply of External Candidates
• If there aren’t enough inside candidates to fill the anticipated
openings (or you want to go outside for another reason), you will turn to outside candidates.
• Factors In Supply of Outside Candidates:
• General economic conditions and employment projections
• Sources of Information • Periodic forecasts in business publications • Online economic projections • Bureau of Labor Statistics (BLS) • Other agencies and private sources Current Projected Projected Internal Staffing - Outflows + Inflows = Supply for Level This Year This Year Next Year
Employee Turnover • The process in which employees leave an organization and have to be replaced • It is a costly problem
Voluntary Turnover • Voluntary turnover is the percentage of employees that leave their job. The word voluntary indicates that the employee chose to leave the employer. There are various reasons for voluntary departures from an organization, such as finding a new job, joining a more desirable brand, or relocation. • Understanding your voluntary turnover and the reasons for turnover is essential, as it will create the basis for the components an employer needs to work on to retain their team members. • To calculate voluntary turnover over a year, use this formula: Example: let’s say an organization has 1,000 employees. During the year, 75 employees leave voluntarily. The voluntary employee turnover rate would be ?? 75 / 1,000 * 100 = 7.5%
Involuntary Turnover • Involuntary turnover is the percentage of employees who have been dismissed or laid off by the company in a given period. A high involuntary turnover indicates poor workforce planning or a lack of initiative to develop employees. • To calculate involuntary turnover rate, you can use the same formula as the voluntary turnover rate but use the correct data of involuntary leavers (dismissal or staff members that have been laid off). Employee Retention Rate • A company’s employee retention rate is an indicator of its ability to keep employees over a period of time. Generally, a good employee retention rate is over 90%. • You want to strike a balance between retaining the existing employees and allowing for new employees with more desirable skill sets and ideas to join the company. • Below is the formula to calculate the employee retention rate:
• As an example, an organization with 500 employees lost 50
employees in the last year. • Employee retention rate = ??
((500-50) / 500) x 100 = 90%
Strategic Planning Human Resource Demand Human Resource Supply Technological Forecasts Annual employment Existing employee Economic Forecasts requirements inventory Market Forecasts Numbers Compared After application Organizational Planning Skills with of expected loss Investment Planning Occupation categories and attrition rates Annual Operating Plans
If None Variances End
If Surplus If Shortage
Action Decisions Decisions
Decisions - Layoff, - Overtime, retirement etc. recruitment etc.
resource policies and practices that produce the employee competencies and behaviors the company needs to achieve its strategic aims Linking Company Strategy and HR Strategy Strategic Human Resource Management Tools • Strategy map: shows the “big picture” of how each department’s performance contributes to achieving the company’s overall strategic goals. Eg. Strategy map for Southwest Airlines • The HR scorecard: process for assigning financial and nonfinancial goals or metrics to important human resource management–related chain of activities to provide link between HR operations and company’s business strategies • Digital dashboards: presents the manager with desktop graphics and charts. It is a computerized picture of where the company stands on all those metrics from an HR Scorecard perspective. Strategy Map The HR Scorecard Thank you
