Chapter 6 Determining HR Demand Copyright 2013 by

Learning Outcomes After reading this chapter, you should be able to: • Understand the importance of demand forecasting in the HR planning process • Recognize the linkages between the HR plan, labour demand forecasting techniques, and the subsequent supply stage Copyright © 2013 by Nelson Education Ltd. 2

HR Demand Copyright © 2013 by Nelson Education Ltd. Thinkstock HR demand: The organization’s

Two Approaches to HR Demand Quantitative 1. Trend/Ratio analysis 2. Regression analysis 1. 2. 3. 4. Qualitative Envelope/scenario planning Impact analysis Delphi technique Nominal group technique Copyright © 2013 by Nelson Education Ltd. 4

Trend Analysis Trend analysis: Reveals the historical relationship between an operational index and the number of employees required by the organization (demand for labour) Copyright © 2013 by Nelson Education Ltd. 5

©atm 2003/Shutterstock Ratio Analysis • Ratio analysis: A quantitative method of projecting HR demand by analyzing the relationship between an operational index and the number of employees required Copyright © 2013 by Nelson Education Ltd. 6

Trend/Ratio Analysis Copyright © 2013 by Nelson Education Ltd. 7

Regression Analysis Regression analysis: Very effective, quantitative forecasting technique for short-, medium-, and long-range time horizons • Can be easily updated and changed • Uses SPSS or SAS Copyright © 2013 by Nelson Education Ltd. 8

HR Budgets HR budgets: Quantitative, operational, or shortrun demand estimates that contain the number and types of personnel required by the organization as a whole and for each subunit, division, or department Copyright © 2013 by Nelson Education Ltd. 9

Thinkstock HR Budgets: Staffing Table • Staffing table: Total HR demand requirements for operational

HR Budgets: Staffing Table Copyright © 2013 by Nelson Education Ltd. 11

Two Approaches to HR Demand Quantitative 1. Trend/Ratio analysis 2. Regression analysis 1. 2. 3. 4. Qualitative Envelope/scenario planning Impact analysis Delphi technique Nominal group technique Copyright © 2013 by Nelson Education Ltd. 12

Envelope/Scenario Forecasts Envelope/scenario forecasts: Projections, or multiple-predictor estimates, of future demand for personnel predicated on a variety of differing assumptions about how future organizational events will unfold Copyright © 2013 by Nelson Education Ltd. 13

Envelope/Scenario Forecasts Copyright © 2013 by Nelson Education Ltd. 14

Impact Analysis Impact analysis: A forecasting method in which past trends are analyzed by

Delphi Technique Delphi technique: A process in which the forecasts and judgments of a selected group of experts are solicited and summarized in an attempt to determine the future HR demand Usually do not meet in person; predictions anonymously circulated and revised Copyright © 2013 by Nelson Education Ltd. 16