Human Resource Management,

BBA, KUSOM
Unit 2
Workforce ‘Planning and Forecasting’
 What is workforce planning?
 What is forecasting?
 Why are they important in organizations?
 How to do planning and forecasting?
 Nepali organizations and workforce
planning and forecasting

Seema Singh, KUSOM, 2013

Workforce ‘Planning and Forecasting’
 The process of formulating plans
 To fill the future openings based on
Projecting open positions, and
Deciding source- inside/outside candidates

Seema Singh, KUSOM, 2013

Workforce ‘Planning and Forecasting’
 Talent management (external)
 Involvesidentifying, recruiting, hiring, and
developing high-potential employees
 Largeorganizations spend 20-40% time in talent
management
 Succession planning (internal)-
 generally for top management from within the
organization

Seema Singh, KUSOM, 2013

Workforce ‘Planning and Forecasting’
Strategy and workforce planning:
 Workforce planning integral to strategy
 How many, what sorts of people to hire, where to tap
them from?
 Skills and competencies for strategy implementation

Seema Singh, KUSOM, 2013

Inside or outside candidates?
 Inside-
 Training,development, and coaching before they are
ready to fill new jobs
 Outside-
 Thorough recruitment and selection function

Seema Singh, KUSOM, 2013

How to forecast personnel needs?
Process-
 Basis for projection- revenue/productivity
 Anticipate demand of product/service
 Estimate the size of the staff required to achieve targeted
volume/revenue
 Use historical ratio for estimation
 Project turnover
 Identify quality/skills/knowledge/ability required
 Make strategic decisions to upgrade the quality of products/services
or enter new market
 Identify technical changes required
 Refer to financial resources available

Seema Singh, KUSOM, 2013

How to forecast personnel needs?
Techniques:
 Ratio analysis
 Trend analysis
 Scatter plots

Seema Singh, KUSOM, 2013

How to forecast personnel needs?
Ratio analysis:
 Forecast based on ratio between
 causal factor (e.g., sales volume) and
 number of employees required (e.g., salespeople)

Seema Singh, KUSOM, 2013

How to forecast personnel needs?
Trend analysis:
 Forecast based on trend of
 Employment levels over five years
 Assumption: the trend will continue in future

Seema Singh, KUSOM, 2013

How to forecast personnel needs?
Scatter plot:
 Graphical representation of relationship of two variables
 (e.g., measure of business activity and your firm’s staffing
levels)
 Industry-wide survey
 E.g., pg 87, fig.3.4
 Points fall along the straight line

Seema Singh, KUSOM, 2013

Forecasting the supply of internal candidates
 Once demand forecast done, look for supply
 Tools?
 Qualification inventory
(performance record, education information, promotability)
 Personnel replacement charts
 For important positions
 Performance and promotability for each potential replacement
 Required training/development
 Human Resource Information System (HRIS)
 Large organizations
 Packaged systems

Seema Singh, KUSOM, 2013

Forecasting the supply of internal candidates
Succession planning:
 The process of
 Ensuring a suitable supply of successors
 For current and future key jobs
 Arising from business strategy so that
 The career of individuals can be planned and managed
 To optimize the organization’s needs and the individual’s aspirations

Seema Singh, KUSOM, 2013

Forecasting the supply of internal candidates
Succession planning:
 For important executive positions
 Integrated series of steps
 Job rotation at several key divisions
 Off the job training and development (executive development
through university enrollments)

Seema Singh, KUSOM, 2013

Forecasting the supply of internal candidates
Succession planning:
Activities-
 Analyze future demand for managers and professionals by company
level, function, and skill
 Audit existing executives and project likely future supply from
internal and external supply
 Plan individual career paths based on objective estimates and
assessments of potential and career interests
 Train and develop them to prepare for future expected roles
 Accelerate promotions
 Plan strategic recruitment to fill short-term needs and to provide
people to develop to meet future needs

Seema Singh, KUSOM, 2013

Forecasting the supply of external candidates
When?
 In absence of
 qualified inside candidates
 to fill anticipated openings
How?
 Forecast
 General economic conditions (rate of unemployment- lower the
rate, more difficult to recruit)
 Local market conditions (growth of industry)
 Occupational market conditions (demand and supply)

Seema Singh, KUSOM, 2013