Human Resource PlanningForecasting Techniques and Strategies

Today’s Class

• Recent Trends of HRP in Few Indian Sectors• Demand Forecasting Technique• Supply Forecasting Techniques

– Internal– External

• Staffing Alternatives– Managing Surplus– Managing Shortage

• Limitations to Human Resource Planning

Current Trends in HRP-Energy Sector in India

• Indian Oil, ONGC, GAIL, HPCL and BPCL today provide direct employment to over 100,000 skilled personnel.

• Industry demands-20,000 people in next 2-3 years

• Private Sector Investment-Reliance, Shell, Essar, Dutch Oil are poaching from PSU by offering 4-5 times salary.

• Both Internal and External affects the demand forecast

Current Trends in HRP-Pharma Sector in India

• This industry would not face manpower crunch because.– Entry of new MNCs which require people for production,

development, sales and product management.– On the retail front, all big retail groups—Future Group, Reliance, RPG,

etc, are setting up pharmacies across India. – Clinical research, which requires specialists, is increasingly shifting to

India. The salaries of such people have gone up significantly in the last two to three years.

– Many of the pharma companies are expanding fast, both in India as well as abroad, further aggravating the war for talent

Current Trends in HRP– Indian Railways

• Indian Railways, the biggest transporting industry in India, has introduced the concept of bench marking as a tool of manpower planning.

• Bench marking is the search for and implementation of best practices.

• Since Indian Railway has a large number of activity centres performing the same type of work, it was decided to do internal benchmarking of activity centre of Indian Railways

• Substantial variations were observed and the activity centers with least manpower ratio (MPR) which means highest productivity were termed as Benchmark centers.

Current Trends in HRP : IT Industry

• In the manpower survey, it is revealed that there is a geometric rise in the demand of IT Professionals in Orissa report given by NASSCOM & MIT and the estimated figure goes up to 16 lakhs, direct employment and 32 lakhs by the year 2008-09 in the indirect employment

• Steps to meet the gap between demand and supply – capacity expansion in the Engineering Colleges and Schools have

been encouraged both in the Government and Private Sector. – The intake capacity of Engineering Colleges and Schools/Polytechnics– Revision of courses and syllabus for Technical Universities and

Technical Institutions as per the present requirement.– The courses and syllabus of IT and IT related subjects are under

regular revision to ensure its suitability for the market requirement.– Quality of IT Education - To ensure quality, steps have been taken to

induct skilled people in teaching of the subject.

Employment Trends Survey – New Jobs Indiaas on March 10, 2010

http://www.123oye.in/employment-trends-survey-new-jobs-india/2010/03/10

/

Visit the link to learn more about the hiring trend across Indian Industries for the year

2010-11

Qualitative Techniques of Demand Forecasting

• Ratio trend analysis

– The basic principle here is to say if it takes six people, for example, to perform an existing amount of work,

– it will take twelve people to do twice as much. Organizations measure activity levels in a variety of different ways.

– Emphasis on ratios between production/sales to direct operatives or ratio between direct operatives and supervisory personnel

– Thus various ratios become s likely trend s for calculating the human resource needs

The Nominal Group TechniqueA small group of 4-5 people gathers around a table. Leader identifies judgment issue and gives participants procedural instructions.

Participants write down all ideas that occur to them, keeping their lists private at this point. Creativity is encouraged during this phase.

Leader asks each participant to present ideas and writes them on a blackboard or flipchart, continuing until all ideas have been recorded.

Participants discuss each other’s ideas, clarifying, expanding, and evaluating them as a group.

Participants rank ideas privately in their own personal order and preference.

The idea that ranks highest among the participants is adopted as the group’s judgment.

Management Judgment Method

• Managers prepare forecast for their own department based on past experiences

• Two approach-top down or bottoms up• Plans are reviewed and consolidated by HR• Traditional method but based on past

experiences

Work study

• Based on the volume of operation and work efficiency of personnel

• limited to manufacturing, certain other areas of manual work, and large clerical functions.

• The number of operatives required to complete specified volume of operation is Planned Output

________________________________________Standard output per hour X Standard hours per person

Forecasting of Manpower by work study technique

At constant productivity

At increased productivity (10%)

Standard Output per annum

Standard Output per hour

Standard hours per person per annum ( 300 X 8 )

Number of persons required

10,00,000 10,00,000

5 5.5

2400 2400

83 75

Planning for the status quo

• Planning involves steps to replace any employees who are either promoted or who leave the firm.

• An example is Management succession planning which seeks to ensure that there is at least one qualified manager to replace any higher level manager in the organization.

Thumb Rule• For example one firm believes that a ratio of one production supervisor for every

12 producers (Workmen) in optimal.

• This firm maintains this 1:12 ratio because it has proved successful in the past.

• Another thumb rule is based on past experience that 1 person can produce 2000 units of output per day and accordingly 5 employees needed for 10,000 units as a matter of forecast

• A sales department, for instance, may have an idea of the number of customer calls a sales person should make in a week, and indeed, use this as one criterion for monitoring sales efficiency. If business plan projects an increase in the number of new customers, this can be translated into proportionate increase in the sales force.

Unit Forecasting

• refers to the estimate of supervisors and managers with regard to forecasting Human resource needs for the next year unit wise –

• this approach called as “Bottom up approach”• judgment are made by lower level

management and added together at a higher level of the organization.

Delphi Method

• This method relies on Expert opinion in making long range forecasts

• this involves obtaining independent judgments from a panel of experts

• usually through a questionnaire or interview schedule

• Helps in knowing the changing job profile, personnel needs across different functional areas etc

The Delphi TechniqueLeader identifies judgment issues and develops questionnaire.

Experts are identified and asked to cooperate.

Leaders send questionnaire to willing participants, who record their judgments and recommendations and return the questionnaire.

Leaders compiles summaries and reproduces experts’ responses.

Leader sends the compiled list of judgment to all Experts

Experts comment on each other’s ideas and propose a final judgment.

Leader looksfor consensus

Leader accepts consensus judgment as group’s choice.

Evaluation of the Current Status

• Personal data ‑ including date of birth (age), qualifications, special skills, and training record

• Position data ‑ including current job and work history in the organization

• Financial data ‑ including current pay, how this is made up (for example, overtime and shift), incremental scale, and pension rights.

• Headcount analysis- by age, service, skills, grades, and department.

HEAD COUNT APPROVAL FORM

Date:Name of the Department :For the Post of :Total No Required :Reason for Requirement :Head Count Requirements : a) Gender : Male/Female b) Qualification : c) Experience : d) Technical Edu : e) Gross Salary :Completion of the requirement by :Approved By the Group Head :Approved By the Director :Approved By the HR Person :Approved By the Admin& Finance :

Supply Forecasting• Internal Sources

– Manning Table - profile of employees in terms of age ,sex, education, training, experience, job level, past performance and future potential to be kept as a record

– Replacement Chart

– Skill Inventory - skills inventory is essentially a checklist or database of organizational capabilities, that can help a company determine whether it can deliver a particular product on time or service the client efficiently.

– Promotability

– Succession Planning

Employee Replacement Chart for Succession Planning

Other Formats

• Refer Handout : How to prepare Skill Matrix• Refer Handout : Replacement Chart• Refer Handout : Manpower Planning Table• Refer Handout : Manpower Request form

• External Sources

– Demographic patterns

– Levels of unemployment

– Developments in the local economy like transport, education, and housing

– The pay policies of other employers, locally and nationally, and their plans for growth and contraction.

Manpower Plan- Strategies• Surplus of Employees Forecasted

– Restricted hiring– Reduced hours– Early retirement– Layoffs

• Shortage of Employees Forecasted– Creative Recruiting– Compensation Incentives– Training Programs– Different Selection Standards

Staffing Alternatives to Deal with Employee Surpluses

Staffing Alternatives to Deal with Employee Shortages

Problems in Human Resource Planning

• Resistance by employer• Resistance by employees• Resistance by trade unions• Uncertainties• Inadequacies of Information system• Identify crisis• Slow and gradual process• Co-ordination with other management functions• Integration with organizational plans

Learning's in today’s class

• Importance and Objectives of HRP• Steps of HRP• Factors that effect HRP• Manpower Demand and Supply Techniques• Shortage and Surplus Strategies• Limitations

JOB ANALYSIS

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