Estimating the future resource needs and changes is called
Answers
Answer:
Human resource (HR) demand forecasting is the process of estimating the future quantity and quality of people required. The basis of the forecast must be the annual budget and long-term corporate plan, translated into activity levels for each function and department. In a manufacturing company, the sales budget would be translated into a production plan giving the number and type of products to be produced in each period. From this information, the number of hours to be worked by each skilled category to make the quota for each period, would be computed. Once the hours are available, determining the quality and quantity of personnel will be the logical step.
HR Demand forecasting must consider several factors-both external as well as internal. Among the external factors are competition (foreign and domestic), economic climate, laws and regulatory bodies, changes in technology, and social factors. Internal factors include budget constraints, production levels, new products and services, organisational structure, and employee separations. Demand forecasting is common among organisations, though they may not do personnel-supply forecasting.
There are several good reasons to conduct demand forecasting. It can help: (i) quantify the jobs necessary for producing a given number of goods, or offering a given amount of services; (ii) determine what staff-mix is desirable in the future; (iii) assess appropriate staffing levels in different parts of the organisation so as to avoid unnecessary costs; (iv) prevent shortages of people where and when they are needed most; and (v) monitor compliance with legal requirements with regard to reservation of jobs.
Forecasting Techniques: HR Forecasting techniques vary from simple to sophisticated ones. Before describing each technique, it may be stated that organisations generally follow more than one technique. The techniques are:
1. Ratio-trend analysis
2. Regression analysis
3. Work study techniques
4. Delphi technique
5. Flow models
6. Other forecasting techniques
Ratio-trend Analysis
This is the quickest HR forecasting technique. The technique involves studying·past ratios, say, between the number of workers and sales in an organisation and forecasting future ratios, making some allowance or changes in the organisation or its methods.
Regression Analysis
This is similar to ratio-trend analysis in that forecast is based on the relationship between sales volume and employee size. However, regression analysis is more statistically sophisticated. A firm first draws a diagram depicting the relationship between sales and workforce size. It then calculates regression line – a line that cuts right through the center of the points on the diagram. By observing the regression line, one can find out number of employees required at each volume of sales.
Work-study Techniques
Work-study techniques can be used when it is possible to apply work measurement to calculate length of operations and the amount of labor required. The starting point in a manufacturing company is the production budget, prepared in terms of volumes of saleable products for the company as a whole, or volumes of output for individual departments.
The budgets of productive hours are then compiled using standard hours for direct labor. The standard hours per unit of output are then multiplied by the planned volume of units to be produced to give the total number of planned hours for the period. This is then divided by the number of actual working hours for an individual operator to show the number of operators required.