Forecasting Techniques in Human Resource Planning


Human resource planning involves studying the future staffing needs of an organization. Employees will leave their positions for many reasons, including better jobs, to retire and to pursue educational opportunities. Firms also eliminate positions because of economic conditions and when shifting the focus to new projects. As an HR professional, you can use forecasting techniques to advise managers on how many and what types of workers they will need, and the skills workers must possess to help the company reach its goals.

Job Analysis

  • A human resources planner must forecast what kinds of jobs the company will need to fill in the future. This might include replacing employees who leave and finding employees to fill positions that don't yet exist in the organization. Job analysis ensures that HR planners know the skills needed to fill positions and, when employees join the organization, what kinds of qualifications and personal traits successful workers exhibit.

Macroeconomic Modeling

  • Forecasters can also use computer macroeconomic modeling programs to predict future workforce needs. This type of program uses various economic indicators to determine how a workforce must grow or shrink in response to changes in the labor market. A program may or may not include analysis of past economic trends.

Employer Survey

  • Organizations can also understand their own workforce needs by looking at industry reports. The U.S. Bureau of Labor Statistics and trade associations are entities that prepare forecasts of workers needed in specific industries. Organizations can also compare their forecasts to predictions made by other employers responding to employer surveys. These surveys are available in the U.S. and in other advanced industrialized nations. A survey asks an employer to predict how many of each type of worker it will need in the future.

Other Options

  • Human resource forecasters also use other techniques to predict the need for future workers. International comparisons involve comparing the needs of one labor sector in one nation with the needs of the same labor sector in another nation. A U.S. entity would compare its workforce needs with companies in other advanced industrialized nations. Another technique, the labor-output ratio, uses a formula including data gained from the past, such as number of people employed in occupational or educational categories, and output. Other options include analyzing job announcements in major publications and analyzing labor turnover surveys.


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