2. HUMAN RESOURCE PLANNING
FORECASTING TECHNIQUES
1.Management Judgment
2. Ratio Trend Analysis
3. Regression Analysis
4. Work study Techniques
5. Delphi Technique
6. Flow Models
7. Other Forecasting Techniques
3. 1.MANAGERIAL JUDGEMENT
Based on experience and judgment of managers-
May be “Top Down” or “Bottom
-
Up” approach.
2. RATIO TREND ANALYSIS
Quickest forecasting technique.
Involves studying past ratios, say no. of workers and sales inan
organization and forecasting future ratios.
3.REGRESSION ANALYSIS
Similar to Ratio trend analysis as it is based on relationship
between sales volume and employee size.
More statistically sophisticated
4. 4. WORK STUDY TECHNIQUES
Can be used when it is possible to apply work measurement to
calculate length of operations and amount of labour required.
Example: MANUFACTURING UNIT
1.Planned Output for next year 20,000 units
2.Standard hours per unit 05
3.Planned hours of the year 100,000 units
4.Productive hours per man/year 2,000(Allowing normal
OT, absenteeism and idle times)
5. No. of Direct Workers required 50
5. 5. DELPHI TECHNIQUES
Estimates of personnel needs are solicited from a group of
experts (Usually managers)
HRP experts act as intermediaries, summarize responses
and report findings back to experts
Summaries and surveys are repeated till different
experts ‘opinion gain consensus.
Consensus reached is the forecast of personnel needs.
Characterized by absence of interaction amongst experts.
6. 6. FLOW MODELS
a) Flow models are associated with forecasting personnel needs. The simplest one is
called the Markov model. In this technique, the forecast will:
b) Determine the time that should be covered. The time horizon depends on the
length of the HR plan which, in turn, is determined by the strategic plan of the
organization.
c) Establish categories, also called states, to which employees can be assigned.
These categories must not overlap.
d) Count annual movements (also called „flows‟) among states for several
time periods. These states are defined as absorbing (gains or losses to the company)
or non-absorbing (change in position levels or employment status). Losses include
death or disability, absences, resignations and retirements. Gains
include hiring, rehiring, transfer and movement of position level.
e) Estimate the probability of transitions from one state to another based on trends.
demand is a function of replacing those who make atransition.
7. b) There are alternatives to the simple Markov model. The semi-
Markov, takes into account not just the category but also the tenure of
individuals in each category.
c) Markov analysis is advantageous because it makes sense to decision
makers. They can easily understand its underlying assumptions. They
are, therefore, likely to accept results. The disadvantages include:
(i) heavy reliance on past-oriented data , which may not be accurate in
periods of turbulent change, and
(ii) accuracy in forecasts about individuals is scarified to achieve accuracy
across groups.
8. Other Forecasting Techniques:
New venture analysis is used when new ventures require
employment planning. This technique requires planners to estimate
HR needs in line with companies that perform similar operations.
For example, a petroleum company that plans to open a coal mine
can estimate its future employment needs by determining
employment levels of other coal mines.
