Question

. Explain how demand and supply are forecasted with the help of manpower planning

Answer 1

Demand Forecasting:

Demand forecasting is a quantitative aspect of human resource planning. It is the process of estimating the future requirement of human resources of all kinds and types of the organisation.

Factors:

Forecasting of demand for human resources depends on certain factors such as:(1) Employment trend in the organisation for at least last five years to be traced

to determine the future needs.

(2) Organisation has to find out the replacement needs due to retirement, death, resignation, termination etc.

(3) Improvement in productivity is yet another factor. To improve productivity organisation needs better employees with skills and potential. Productivity leads to growth but depends on the demands for the product of the enterprise in the market. Higher demand may lead to more employment of skilled personnel’s.

(4) Expansion of the organisation leads to hiring of more skilled persons. The base of human resource forecast is the annual budget. Manufacturing plan depends upon the budget. Expansion in production leads to more hiring of skills and technology.

Methods of Demand Forecasting:There are three major methods of demand forecasting. They are as follows.

(1) Executive Judgment:

Executive or Managerial Judgment method is the most suitable for smaller enterprises because they do not afford to have work study technique. Under this method the executives sit together and determine the future manpower requirements of the enterprise and submit the proposal to the top management for approval. This approach is known as ‘bottom up’ approach.

Sometimes the members of top management sit together and determine the needs on the advice of personnel department. The forecasts so prepared sent for review to the departmental heads and after their consent approved the need. This is known as ‘top down’ approach. The best way is the combination of the two approaches. Executives at both levels equipped with guidelines sit together and determine the human resources need of the organization.