HR/Manpower Forecasting

& Planning
Manpower Forecasting

Manpower forecasting is assessing the anticipated increased
manpower demands in an organization over a specific period .

Manpower forecasting is concerned with the projection of future
manpower requirements both in their quantitative and qualitative
aspect as necessitated by any changes in technology, methods
of production, activities of the organization and thereby changes
in organization structure.
Influencing factors in Manpower Forecasting

1)Socio-political environmental changes

2) Changes in all spheres ie. technological, mechanization and
automation.

3)General economic conditions and market trends

4)Change in societal values and norms

5)Changes in both internal and external labor market .
Forecasting Needs for Human Resources
This is the first essential ingredient of HRP as
it helps in forecasting needs for human
resources in an organization over a period of
time.

Forecasting does not depend on the scale of
operations alone ,but other factors also affect
it such as change in machine-man ratio ,
change in productivity etc.

Years ended March 31
1999 1997 1995 1992 1985

Sales (Rs. In crore)14533 8730 7019 2953 733

Employees (numbers)16640 16778 12560 11940 9066


The table shows that volume of operations has increased at a faster rate
than the number of employees at Reliance Industries.
Forecasting of human resources requirements serves the
following purposes :

1) To quantify the jobs necessary for producing a given number of
goods or offerings.
2) To determine what staff-mix is desirable in the future.
3) To assess appropriate staffing levels in different parts of the
organization so as to avoid unnecessary cost.
4) To prevent shortage of people where and when they are needed
most .
5) To monitor compliance with legal requirements with regard to
reservation of jobs in case of public sector undertakings
Techniques for Forecasting of
Human Resource Needs

In case of forecasting human resource needs in
an organization, there is less emphasis on
highly quantitative techniques because of
emphasis on qualitative aspect of forecasting.
Techniques for Forecasting of Human Resource Needs

1)Managerial judgement method.
2)Delphi technique.
3)Nominal group technique.
4)Work-study technique.
5)Ratio-trend analysis.
6)Replacement Charts.
7)Scenario analysis.
8)Questionnaires or interviews.
Managerial judgement method.
This is the most commonly practiced and conventional
method of forecasting human resource needs.

Here the managers prepare the forecast of human
resource needs of various categories in their respective
departments based on their past experience.

This method can be applied in two alternative ways:
Top-down approach
or Bottom-up approach
Delphi Technique.
This technique is used in group decision making in the
present world.
In a conventional Delphi technique a small group
designs questionnaire about the problem under study.
This is then sent out to experts in that field to be filled by
them independently.
The filled questionnaires are analysed by the
designer, and if any divergence in opinions of experts, a
revised questionnaire is prepared and sent to a larger
group.
This exercise is repeated till some consensus is
reached.
Delphi Technique
Delphi technique is useful when the problem
cannot be solved by using analytical techniques
but its solution requires subjective judgements
on collective basis.

For example , what will be the trend of fashion
next year, can be known by using Delphi
technique.
Delphi Technique
It can be used for forecasting human resources needs in two forms:

First , it can be used to know the trends for changing job
profile and consequently ,the changing personnel profile
across the country or international level.

Second, this can be used to solicit views of experts in
different functional areas of an organization about the
changing profile of personnel in their respective
department in the light of changing environment.
Nominal group technique
A small group format, strategist generate their
individual HR strategy preferences, discuss their
assumptions about jobs, people ,and HR
department.

Individual predictions about positive and negative
consequences or advantages and
disadvantages of HR grand strategies are
shared and then they vote on an HR strategy
and thereby reach consensus on action.
Work Study Technique.
Work study technique is based on the volume of operation and
work efficiency of personnel.

Volume of operation is derived from the Organizational plan
documents.
Work efficiency or productivity is measured by time and
motion study which specifies standard output per unit of
time

Planned output
standard output per hour * standard hours per person
Work Study Technique
Forecasting of manpower requirement by work study technique

at constant at increased
productivity productivity (10%)


Standard output per annum 10,00,000 10,00,000
Standard output per hour 5 5.5
Standard hours per person
per annum (300*8) 2400 2400

No of persons required 83 75


Ratio Trend Analysis.
In a Ratio Trend analysis the main emphasis is on the ratios between
production/sales level and direct operatives, direct operatives and other
personnel ,say supervisory and managerial personnel.



Year no of no of operatives
operative supervisors supervisor ratio
Actual 3 years ago 1,000 100 10:1
2 years ago 1,200 120 10:1
Last year 1,500 125 12:1
Forecast Next year 1,800 150 21:1
After 2 years 2,000 154 13:1
After 3 years 2,200 157 14:1
Replacement Charts.

In case of managerial personnel, some firms use
separate inventory system usually in the form of
replacement charts , as they are sometimes called
manning tables.

These charts generally contain:
The age
Years of service put in the organization
Current performance and past performance
Promotion potential and how soon
Possible replacements
Scenario analysis

Strategists are furnished with a narrative description of the
organization as it exists at a future time.

They are then asked for opinion about the likelihood that
the future will come to pass, what kinds of jobs , people
and HR department practice area initiatives will be
needed , and what HR grand strategy is likely to be most
instrumental in creating the desired future.
Questionnaires or interviews.

Strategists are asked about their HRP strategy
preferences,likely outcomes, and relative
value of each strategic alternative.

A management committee then receives the
results, where they are deliberated and a
strategy is chosen.