HR Forecasting: Techniques & Methods

HR Forecasting: Techniques & Methods
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  • 0:02 What Is HR Forecasting?
  • 0:37 Basic Definitions
  • 1:36 Method
  • 3:39 Techniques
  • 4:59 Lesson Summary
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Lesson Transcript
Instructor: Brianna Whiting
In this lesson, we'll learn about one of the functions of the human resource department: forecasting. We'll look at some of the more common techniques as well as a step-by-step method companies use for forecasting.

What Is HR Forecasting?

Meet Laura! Laura works for a big company where they make sunglasses. Her company has many different departments, and Laura works in the human resource department. Her primary duties involve hiring new employees. While she has always been good at finding qualified employees, she struggles at knowing when she needs to hire them. Laura decided to do some research to see if there were any techniques or methods to help her learn how to predict when to hire new employees. It was at that time that Laura came across human resource forecasting, which can give her the tools to better understand the future needs of her company. Let's take a look.

Basic Definitions

Before we look at some of the techniques and methods of HR forecasting, lets define some basic terms. First human resources is the department in charge of recruiting, hiring, and training employees. This means they are in charge of staffing the company and fulfilling any employee needs. Human resource forecasting is the process of determining or predicting the needs of the company by means of data and models. Forecasting is used to understand the skills and performance level of the current staff to help identify any gaps where hiring or restructuring needs to occur. By looking at past data and company statistics, the HR department can determine future needs. For example, Laura might look at the trends of past years when the demand for sunglasses increased. If she notices that there is an increase in demand in the spring, she might realize that in the future she should plan to hire more staff at that time.

Method

So, now we know that using past data and trends to help predict future needs is referred to as forecasting. But, how does a company do this? In this section, we will look at a step-by-step method that a company might use when forecasting human resource needs:

1. Create an overview of the company. Before you can predict future needs, you need to determine the current level of your company. This means understanding each job and the tasks that position is required to complete. You then need to determine the current output level as well as the desired output level. This will allow you to calculate the needed number of staff to reach the desired output level. So, if Laura determines that the company wants to sell more sunglasses during the Christmas season, she may determine current output levels at that time and desired output levels at Christmas, and then ramp up hiring to meet that desire.

2. Ask management to complete a survey and create a report based on their combined responses, known as the Delphi technique. Who better to ask about the needs of each department, then the managers that oversee each of them? By having management express their opinions about future needs of the company, the HR department will be better equipped with the knowledge of the departments that are struggling and the ones that are adequately staffed.

3. Using raw data, conduct calculations to determine the company's average statistics. For example, you might want to know how long the average employee works for the company and analyze how many employees are close to this limit. This data can help the HR department forecast the future needs.

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