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Fall 2013 smu solution of mb0043 Q1. The success of HR plans depends on the accuracy of HR forecasts. What is the meaning of this HR forecasting? Describe the following HR forecasting techniques: (a) Index/ Trend analysis and (b) Expert forecasting

Answer: The HR forecasting involve estimating the future requirements of the organisation in terms of the nature and the number of people. An organisation may use one or more of the forecasting techniques available to assess the future HR requirements.In fact, the accuracy of HR forecasting largely depends on the ability of the forecasting techniques in rightly projecting
the future.

The Index/Trend analysis involves the following steps:

Select the appropriate business/operational index – Select a readily available business index, sales level that is known to have direct influence on the organisational demand for labour.

Track the index over time – Once the index has been selected, it is necessary to go back in time for at least four or five most recent years.

Track the workforce size over time – Record the historical figures of the total number of employees.

Calculate the average (or most recent) ratio of the business index to the workforce size (‘Employee Requirement Ratio’) – In this step, the ratio of number of employees required for each thousand rupees of sales is obtained by dividing each year’s number of employees by the level of sales.

Calculate the forecasted HR demand – Multiply the annual forecasting for the business index times the average employee requirement ratio for each future year to arrive at forecasted annual demand for labour.

Expert forecasting or Delphi technique:

This method is essentially a group process to achieve a consensus forecast. This method calls for selection of a panel of experts either from within or outside the organisation. A series of questions is prepared from the responses received from a prior set of questions in sequencing manner.


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