The HR Forecasting Process
The HR Forecasting Process
The HR Forecasting Process
The HR
Forecasting
Process
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Learning Outcomes
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Learning Outcomes
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Learning Outcomes
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Learning Outcomes
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Why Is Strategic HR
Planning Important to
Organizations?
• Because it attempts to balance between the
work that needs to be done and the workforce
that performs the tasks to do the work
• Insufficient work and too many employees lead
to inefficiencies and lower productivity.
• Employees may become bored and unmotivated
and engage in counterproductive behaviours.
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Why Is Strategic HR
Planning Important to
Organizations?
• On the other hand, too much work and an
insufficient number of employees leads to
higher overtime and wages expenses, while
at the same time increases the stress and
fatigue of the overworked employees.
• Both scenarios will result in an ineffective
organization that might compromise its ability
to meet its goals and objectives.
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Forecasting Activity
Categories
There are three forecasting categories:
1. Transactional-based forecasting:
Focuses on tracking internal change
instituted by the organization's managers
2. Event-based forecasting: Concerned with
changes in the external environment
3. Process-based forecasting: Not focused
on a specific internal organization event, but
on the flow or sequencing of several work
activities
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Benefits of HR
Forecasting
1. Reduces HR costs
2. Increases organizational flexibility
3. Ensures a close linkage to the macro
business forecasting process
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Benefits of HR
Forecasting
4. Ensures that organizational
requirements take
precedence over issues of
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resource constraint and
scarcity (HR Supply and HR
Demand)
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Human Resources
Supply and Demand
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5 Stages of the
Forecasting Process
1. Identify organizational goals, objectives,
and plans.
2. Determine overall demand requirements
for personnel.
3. Assess in-house skills and other internal
supply characteristics.
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5 Stages of the
Forecasting Process
4. Determine the net demand requirements
that must be met from external,
environmental supply sources.
5. Develop HR plans and programs to
ensure that the right people are in the right
place.
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Organizational Factors
Affecting HR Forecasting
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HR Forecasting
Time Horizons
1. Current forecast: Up to
one year
2. Short-run forecast: From
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Outcomes of Forecasts
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Outcomes of Forecasts
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HR Shortage or
Surplus
HR shortage: Demand > Supply
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Dealing with
Surpluses
Job sharing: Occurs when two or more
employees perform the duties of one full-time
position
Attrition: The process of reducing an HR
surplus by allowing the size of the workforce
to decline naturally
Hiring freeze: A prohibition on all external
recruiting activities
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Dealing with
Shortages
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