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HR Demand

HR Demand Techniques
Qualitative HR Demand Techniques

( descriptive) Quantitative HR Demand Techniques ( past / historical data analysis)

Forecasting Techniques
A. Trend analysis B. Expert Forecasts C. Delphi Technique D. Nominal Group Technique E. HR Budgets: Staffing or Manning Table F. Envelope/ Scenario Forecasting G. Regression Analysis

A. Trend analysis
Examine the relationship between operational

business index and the demand for labor( HR) Indexes like sales, number of units produced, clients served etc. Demand for labor means HR/ staff.

Steps of Intex/Trend Analysis


1) Select the appropriate business/operational 2) 3) 4) 5)

index(sales, number of units produced, clients served etc. ) Track the business index over time ( years, months or days or period) Track the workforce size over time ( staff or HR) Calculate the average ratio of the business index (sales)to the workforce size(HR) Calculate the forecasted demand for labor

Problem( index analysis)


Year (t) Sales ($ Number of employees Index thousands) (y) (y) Sales ( $ thousands per employee) $2800 3050 3195 3300 Forecasted 3500 Forecasted 3600 Forecasted 3850 155 171 166 177 ? ? ? 18.06 17.83 19.25 18.64( latest ratio) 2002 2003 2004 2005 2006 2007 2008

Linear programming
Calculating a and b Ft = a + bt
b =

n (ty) - t y 2 - ( t) 2 n t

a =

y - b t n

Year (t)

Sales ($ thousands) (y) $2800 3050 3195 3300 y=12345

ty

t2 4008004 4012009 4016016 4020025 t2=16056054

2002 2003 2004 2005 t=8014

5605600 6109150 6402780 6015000 ty=24132530

b =

n (ty) - t y (12345)/3(16056054)-(8014)2 n t 2 - ( t) 2 =96530120-98932830/48168162 y - b t n


64224196 =-2402710/-16056034 =.149645298 =.15 a= 11142.9/3 =3714.3

b=4(24132530)-(8014)

a =

Calculating a and b
Ft = a + bt F2006 =3714.3+.15(2006)

=3714.3+300.9 =4015.2 F2007= 3714.3+.15(2007) = 4015.35

B) Expert forecast
It is a qualitative process for determining

future labour requirements The experts are :


Line

managerswho have details knowledge about workload, responsibilities and overall task responsibilities Org. own HR and business planning staffs: they use econometric and strategic models to predict future growth of company and economy Business consultants, financial analysts, university researchers , union staff members. Local governmental staff. HR manager may take help Experts from outside

C) Delphi technique
A carefully designed program of Sequential

,individual interrogations ( usually conducted through questionnaires) interspersed / scatter with information feedback on the opinions expended by the other participants in previous rounds Project coordinator collect information from individual employee then they forecast

Steps of Delphi Technique


1) Define and refine the issue or question 2) Identify the experts, terms and time horizon 3) Orient the experts: the experts are told either

that there will be a predetermined number of questionnaire that that the sequence will continue until a majority option exist among the experts 4) Issue the first-round questionnaire: project coordinator sends questionnaire to the experts. This is particularly his or her own particular demand estimate. 5) Issue the first-round questionnaire summary and the second round of questionnaire.

Disadvantages of Delphi Technique


Long time Increase cost Results cant be validated statistically If experts are from one specific field

forecasting will be unreliable If insufficient attention is paid to develop criteria, experts forecasting will not carry meaning

D) Nominal Group Technique


It is long- run forecasting technique utilizing expert assessments . Steps : 1) Define and refine the issue or question and the relevant time horizon 2) Select the experts 3) Issue the HR demand statement to the experts 4) Apply expert knowledge, state assumptions, and prepare an estimate 5) Meet face to face 6) Discuss the demand estimates and assumptions 7) Vote secretly to determine the expert demand assessment

E) HR Budgets: Staffing or Manning table


Quantitative, operational, or short-run, demand

estimates that contain the number and types of personnel ( personnel classes such as bank clerks, loans officers, and branch managers) required by organization as a whole and for each sub- unit, division, or department.

Prepared by HR staff in conjunction with line

managers Considers historical staffing trends Competitors staffing practices Industry and professional associations Statistics

Staffing table and HR Budget


Staff demand Requirements Sales( $ millions)

Administrative positions
President VP Marketing managers Sales staff HR staff Treasurer Financial Staff Clerical and general Staff

$1-10 $10-25
1 1 1 4 2 1 3 5 1 1 1 7 4 1 5 8

$25-50
1 2 2 10 5 1 7 12

$50-75
1 3 2 18 7 2 9 14

Production Positions
Executive chef Cook helper 1 8 10 1 15 20 5 25 30 6 35 40

F) Regression Analysis
Presupposes

that a linear relationship exists between one or more independent variables which are predicted to affect the dependent variable. The simple regression prediction model is as follows:

Y=A + BX
Where , Y = dependent variable( HR demand /

number of personnel required) A = constant ( intercept) B= the slope of the linear relationship between X and Y X= independent variable ( level of sales, production

Calculating A and B
Y= A+ BX
N (xy) - x y B = x2 - ( x) 2 N

B =

y - Bx N

Problem-01
X Sales Level ( $ Millions) 2.0 3.5 4.5 6.0 7.0 Y Number of Marketing personnel 20 32 42 55 66

1. 2. 3.

Calculate the Number of Marketing personnel equation. A=.82, B=9.17 For $8 million of sales ( x=8) , how many staff are required ? Ans: 74 For $10 million of sales ( x=10) , how many staff are required ? Ans:93

Problem-02
X Dating Contracts ( $ thousands) 1.5 2.0 3.0 3.8 4.2 1. 2. 1. Y Customer Service Representatives 9 14 21 25 27

Calculate the Customer Service Representatives equation. For $ 5000 dating contracts , how many Customer Service Representatives are required ? For $7000 dating contracts, how many Customer Service Representatives are required ?

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