1. Chapter 4 The HR Forecasting Process

2. Learning Outcomes
Identify the three different categories of HR Forecasting activity and their relationship to the HR Planning Process
State the considerable advantages that accrue to organizations from instituting effective HR forecasting procedures
Discuss the rationale for giving special attention to specialist, technical, and executive personnel groups in the HR forecasting process
Describe the relevant time periods for future estimates of HR demand and supply
Identify the various steps in the process of determining net HR requirements and terminology describing type of outcomes

3. Why is Strategic HR Planning important to Organizations?
Because it attempts to balance between the work that needs to be done and the workforce that performs the tasks to do the work
Insufficient work and too many employees lead to inefficiencies and lower productivity
Employees may become bored and unmotivated and engage in counterproductive behavior

4. Why is Strategic HR Planning important to Organizations?
On the other hand, too much work and an insufficient number of employees lead to higher overtime and wages expenses, while at the same time increases the stress and fatigue of the overworked employees
Both scenarios will result in an ineffective organization that might compromise its ability to meet its goals and objectives

5. Forecasting Activity Categories
There are three forecasting categories:
Transactional-Based forecasting: Focuses on tracking internal change instituted by the organization’s managers
Event-Based forecasting: Concerned with changes in the external environment
Process-Based forecasting: Not focused on a specific internal organization event, but on the flow or sequencing of several work activities

6. Benefits of HR Forecasting
Reduces HR Cost
Increases organizational flexibility
Ensures a close linkage to the macro business forecasting process
Ensures that organizational requirements take precedence over issues of resource constraint and scarcity (HR Supply and HR Demand)

7. Human Resource Supply and Demand
Human Resource Supply: The source of workers to meet demand requirements, obtained either internally (current members of the organization’s workforce) or from external agencies Human Resource Demand: The organization’s projected requirement for human resources

8. Key Personnel Analyses conducted by HR Forecasters
Specialist/Technical/Professional personnel
Employment equity-designated group membership
Managerial and executive personnel
Recruits

9. 5 Stages of the Forecasting Process
Identify organizational goals, objectives and plans
Determine overall demand requirements for personnel
Assess in-house skills and other internal supply characteristics
Determine the net demand requirements that must be met from external, environmental supply sources
Develop HR plans and programs to ensure that the right people are in the right place.

10. Organizational Factors affecting HR Forecasting
Corporate mission, strategic goals
Operational goals, production budgets
HR policies
Organizational structures, restructuring
Worker KSAOs, competencies, expectations
HRMS level of development
Organizational culture, climate, job satisfaction, communications
Job Analysis: workforce coverage, current data

11. HR Forecasting Time Horizons
Current Forecasts: up to to one year
Short-run Forecasts: From one to two years
Medium-run Forecasts: From two to five years
Long-run Forecasts: For five or more years

12. Outcomes of Forecasts
Prediction: A single numeric estimate of HR requirements associated with a specific time horizon and set of assumptions Projection: Incorporates several HR estimates based on a variety of assumptions

13. Outcomes of Forecasts
Scenario: A proposed sequence of events with its own set of assumptions and associated program details Contingency Plans: Implemented when severe, unanticipated changes to organizational or environmental factors completely negate the usefulness of the existing HR forecasting predictions or projections; like a backup plan

14. Steps in Determining net HR Requirements
Determine HR demand
Ascertain HR supply (includes internal supply and external supply) and skills inventory- personal database record on each employee
Determine Net HR requirements
Institute HR programs: HR shortage and HR surplus

15. HR Shortage or HR Surplus
HR Shortage: Demand > Supply HR Surplus: Supply > Demand

16. Dealing with Surpluses
Job Sharing: Occurs when two or more employees perform the duties of one full-time employees
Attrition: The process of reducing an HR surplus by allowing the size of the workforce to decline naturally
Hiring Freeze: A prohibition on all external recruiting activities

17. Dealing with Shortages
External Recruitment: Finding employees from outside the organization

18. End of Topic