FORECASTING

HR SUPPLY
AND DEMAND
GROUP MEMBERS
 Imdad ul haq
CONTENTS
 Introduction
 Forecasting HR Supply
 Factors Affecting HR supply
 Forecasting HR Supply Methods
 Forecasting HR Demand
 Factors affecting HR Demand
 Forecasting HR Demand Methods
 Conclusion
 Introduction

Human Resource Forecasting

 Process of projecting the organization future HR
need (demand) and how it will meet those needs
(supply) under a given set of assumptions about
the organization policies and the environment
conditions where it operate.
 Without Forecasting we can not asses the distinct
between the supply and demand
Forecasting HR supply
 The purpose of identifying future HR supply
requirements is to determine the number of
employees require for each job and their
knowledge, skills , abilities and other
characteristics.
 HR supply forecasting is essential in determining
the characteristics of hiring sources with the
predetermined planning horizon in order to
establish whether future HR supply is sufficient to
match future HR demands
Factor affecting external
Forecasting HR supply

 Supply and Demand of jobs or skills

 Education attainment levels within a region
 Compensations pattern based on experience
, occupation or Education
 immigration and emigration patterns within
the area
 Forecast of economic Growth an decline
Factor affecting Internal
Forecasting HR supply

 Organizational features (e.g ., staffing

capabilities )
 Productivity – Rates of productivity ,
productivity changes
 Rates of promotion , demotion , transfer and
turnover
Forecasting HR supply
methods

 Trend Analysis
 Competency model
 Replacement charts
Trend Analysis
 Trend analysis involves collecting and
evaluating data to identify patterns of
information that might impact future
 A method of forecasting that assume past
trends and ratios in employee movements are
stable and indicative of future trends and ratio
in employee movement
 One of the simplest method for Forecasting
future HR supply
 For Example , an organization reviewing
historical data may realize that every year
approximately five of their staff retire , six
percent resign and three percent are
dismissed
Competency model
 Competencies are behaviors that encompass
the knowledge , skills and attitude required
for successful performance
 Competency modeling is the activity of
determining the specific competencies that
are characteristic of high performance and
success in given job
 Competency model focus on matching the
right skills or competencies needed for each
job with the skills available with in the
organization
Replacement chart

 A chartused to estimate the vacancies in

higher level jobs and identifying how potential
HR supply can fill these vacancies via internal
movements for lower level jobs
 Replacement chart provide identification of
potential replacements for vacancies within
the organization
 Generally, a Replacement chart includes
information about employees performance
readiness to fill the position, and education
Forecasting HR Demand
 Forecasting HR demand is the process of
estimating the future HR requirement of right
quality and right number
 HR demand forecasting requirement is to be
estimated keeping in view the organization
plan over given period of time
 Job analysis and forecasting about the
quality of potential HR facilitates demand
forecasting.
Factor affecting Forecasting
HR Demand
Human Resource Demand Forecasting
depends on several factors, some of which are
given below.

 Employment trends;
 Replacement needs;
 Productivity;
 Absenteeism; and
 Expansion and growth.
Forecasting HR Demand
methods
 Managerial Judgment
 Work Study Technique
 Econometrics Models
Managerial Judgment
 This technique involves two types of approaches
i.e. 'bottom-up approach' and 'top-down
approach'
 Under the 'bottom-up approach', line mangers
send their departmental requirement of human
resources to top management
 Under the Top-down approach', top
management forecasts the human resource
requirement for the entire organization and
various departments.
Work-Study Technique

 This technique is also known as 'work-load

analysis'. This technique is suitable where the
estimated work-load is easily measureable.
 Under this method, estimated total production
and activities for a specific future period are
predicted
 Under this method demand of human resources
is forecasted on the basis of estimated total
production and contribution of each employee
Econometrics Model

 These models are based on mathematical

and statistical techniques for estimating future
demand
 Under these models relationship is
established between the dependent variable
to be predicted and the independent variables
 Using these models, estimated demand of
human resources can be predicted.
 Conclusion

 Forecastingis a process of making

statements about events those actual
outcomes have not yet been observed
 HR forecasting is all about estimating future
demand and supply of HR in an organization
QUESTIONS
AND
ANSWERS