Models And

Techniques Of
Manpower Demand
And Supply
Forecasting
H.R.P.D(HRM-
306) Made By:-
Kanchan
Pandey
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INTRODUCTION

Firstly we should know what is Manpower demand forecasting and

what is Manpower supply forecasting.
 Manpower demand forecasting :- Manpower Demand
forecasting is the process of estimating the future quantity of
manpower required.
 Manpower supply forecasting :- Manpower supply forecasting
measures the quantity of manpower that is likely to be available
from within and outside the organization .

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Manpower
demand
forecasting
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.Factors affecting
Manpower demand
forecasting
The demand for human resources is influenced by several factors

Organizational decisions
Workforce factors

Organizational Decisions: Decisions such as expansion,

diversification, and relocation leading to demand for people
possessing requisite skills
Workforce Factors: Such as retirement, resignation, and
termination etc creating manpower gaps.

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manpower demand
forecasting
Expert forecasts / Managerial judgment
Employers Opinion Method
Trend analysis
Workforce analysis
Workload analysis

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Models and techniques of

manpower demand
forecasting
Expert Forecasts: These are based on the judgements of those who
possess good knowledge of future human resource needs.
This is a good technique to use when,
• experts are unbiased,
• large changes are unlikely,
• relationships are well understood by experts (e.g., demand goes up
when
prices go down),
• experts possess privileged information,
• experts receive accurate and well-summarized feedback about their
forecasts

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manpower demand
forecasting
Employers Opinion Method

Under this method employers are asked to give their assessment of future
manpower needs in different categories in their respective establishments.
Aggregating over all employers and making allowance for death,
retirement, migration and occupational mobility, it is then possible to
arrive at future manpower demand by skill category. This method has been
used in a number of developed countries like the United States, United
Kingdom, Canada, Sweden and France. This method is used when we
want highly skilled professionals.

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manpower demand
forecasting
Trend Analysis: This is based on the assumption that the future is an
extrapolation from the past. Human resource needs, as such, can be
estimated by examining past trends.

An example of trend analysis

2001-02 Production of Units : 5,000
2001-02 No. of Workers : 100
Ratio : 100:5000
2002-03 Estimated Production units : 8,000
1 0 0
No. of Workers required : 8000 × 5 0 0= 160
0
If supervisors have a span of 20 workers, 8 supervisors are also needed in
2002-03.

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Models and techniques of

manpower demand
forecasting
Workforce Analysis: In this technique all relevant factors in planning
manpower flows in a firm such as transfers, promotions, new recruitments,
retirement, resignation, etc are taken into account while estimating HR
needs.
Manpower flows in a bank
P r o m o t io n s o u t
T r a n s f e r s I n >
> T r a n s f e r s O u t
> R e t ir e m e n t
> V R S S c h e m e
R e c r u it s I n >
> T e r m in a t io n s
> R e s i g n a t i o n s
P r o m o t io n s I n >
> A t t r a c t i o n s in O
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Models and techniques of

manpower demand
forecasting
Workload analysis: In this technique on the basis of planned output, a firm
tires to calculate the number of persons required for various jobs. Using
workload analysis one can establish workload of individual organization.
An example of workload analysis

Planned output for the year 10,000 pieces

Standard hours per piece 3 hours
Planned hours required 30,000 hours (10,000x3)
Productive hours per person per year 1,000 hours (estimated on annual basis)
(allowing for absenteeism, turnover, idle time etc.)
No. of workers required 30 (30,000/1000)

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Manpower
Supply
forecasting

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Factors affecting
manpower supply
forecasting
 Current and future competition for labour from other employers.
Local unemployment levels.
Local housing , shopping and transport facilites.
The output from the local educational system and govt. or other
training institutes.
Local unemployment level.
Demand for specific skills
 The attractiveness of an industry in a particular place

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Models and techniques of

manpower supply
forecasting
A) Internal supply forecasting
(1)Wastage Analysis
(2) Staffing table
(3) Marcov analysis
(4) Skills inventory
(5) Replacement chart

B) External supply forecasting

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Models and techniques of

manpower supply
A) forecasting
Internal labour supply: a manpower inventory in
terms of the size and quality of personnel
available (their age, sex, education, training,
experience, job performance, etc) is usually
prepared by HR departments. Several techniques
are used while ascertaining the internal supply of
manpower (a supply of employees to fill
projected vacancies can come from within the
firm or from new hires )

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Estimated internal labour

supply for a given firm
S o u r c e s o f I n f l o w s T h e F ir m P r o j e c t e d O u

 P r o m o t io n s

 T r a n s f e r s  Q u i t s
C u r r e n t S t a f f i n g
 P r o m o t io n s L e v e l  T e r m i n a t i o n
E m p lo y e e s I n E m p l o y e e s O u t
 N e w R e c r u i t s  R e t ir e m e n t

 R e c a ll s  D e a t h s

 L a y o f f s

C u r r e n t P r o je c t e d P r o je c t e d F i r m ’s in t e r n a l
s t a f f i n –g o u t f l o w s i n f l o w s + s u p p l y f o r t h i s
le v e l t h is y e a r t h is y e a r t i m e n e x t y e a r

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Models and techniques of

manpower supply
forecasting
Wastage Analysis
Manpower wastage is an element of labour turnover. Wastage is
severance from the organization, which includes, voluntary retirement,
normal retirement, resignations, deaths and dismissals. Marginal
recruitment decisions, without wastage analysis may lead to
Induction
inaccuracies in HRP. Crisis

Differential
Transit

Levers
Settled Connection

Weeks Time Months/Years

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Models and techniques of

manpower supply
forecasting
Different methods of Wastage Analysis
(1) Labour Turnover Index
This index indicates the number of levers as percentage to average
number of employees. Average number of employees employed in a
given time period is decided by adding the employees at the
beginning and end and then dividing the same by two.
Example
At the beginning of a year, a firm has 250 employees, while at the
end it has 230. Assume no recruitment has been made in between.
Compute the labour turnover index.
(2) Stability Index
This index indicates stable workforce percentage for a given period
and can be computed as under:
Number with more than 1year service now
×100
Total Employed one year ago
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Models and techniques of

manpower supply
forecasting
(i)Staffing table:.
are the pictorial representations of all organizational jobs, along with the
numbers of employees currently occupying those jobs and future
employment requirements. Staffing table shows the number of employees
in each job, how they are utilized and the future employment needs for
each type of job
(ii) Marcov analysis: Uses historical information from personnel
movements of the internal labour supply to predict what will happen in
the future and it shows the percentage (and actual number) of employees
who remain in each job from one year to the next, thus keeping track of
the pattern of employee movements through various jobs.

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Marcov analysis for a

hypothetical retail company
2 0 0 3 - 2 0 0 S4 t o r e A s s t . S t o r e S e c St i oa nl e s E x i t D e p t .
M a n a g e r s HM e a a n d a s Hg ee r d s sE x e c u t i v e s

S t o r e M a 8 n 0 a% g e r s 2 0 %
( n = 1 5 )
1 2 3

A s s t . S t o 1 r1 e % 8 3 % 6 %
M a n a g e r s
4 3 0 2
( n = 3 6 )
S e c t io n 1 5 %
1 1 % 6 6 % 8 %
H e a d s
( n = 9 4 ) 1 1 6 3 8 1 4

D e p a r t m e n t a l
1 0 % 7 2 % 2 % 1 6 %
H e a d s
( n = 2 8 8 ) 2 9 2 0 7 6 4 6

S a l e s
E x e c u t i v e s 6 % 7 4 % 2 0 %
( n = 1 4 4 0 ) 8 6 1 0 6 6 2 8 8

F o r e c a s t e d
S u p p l y 1 6 4 1

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F ig u r e s i n c i r c l e s s h o w t h e t r a n s it i o n p e r c e n t a g e s
development
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Models and techniques of

manpower supply
forecasting
Skills inventory: It is a summary of the skills and abilities of employees used
in forecasting supply.
For assessing effectively internal manpower supply, it is important for an
organization to maintain skills inventory containing various information
about individuals and their suitability for different jobs. A typical skills
inventories include the name of the employee and a listing (or “inventory”)
of job‑related skills, training.

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Skills inventory: an
example N
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A u d i t i n gC o m p u t Ae rn a l y s 2i s 0 0 2 2 0 0 3 BC a h n i e k f A c c o u n t s T T
r e c o r d s O f

E d u c a t io n M S e p m e c b i ae l r Qs h u i a p l i s f i c a t i o n

D e g r e Me a j o r C Yo eu ar s r e D a t e A I M A 1 .

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B .C o m 1A 9 c 9 c 5 o u nR t i s s k M a n a g e m e n t 1 9 9 9 3 .

C o m p u t eL ra n g u a g e Ps o s i t i o n L o c a t i o n
L i t e r a c y p r e f e r e n c c eh o i c e

 T a ll y F r e n c h A c c o u n t i n gK o lk a t a C h e s s
 B a n k in g D e lh i F o A o ut b d a i t l il n g
S o f t w a r e B a n g a l o r eB o a t in g

E m p l o y e e s S i g n a t u r e _ _ _ _ _ _ _ _ _ _
D a t e _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

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Models and techniques of

manpower supply
forecasting
Replacement chart: It is a visual representation of who will replace whom
in the event of a job opening. Basically replacement chart helps us to get
the profile of job holders, department-wise and reveals those who could be
used as replacements whenever the need arises.

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Replacement chart
G e n e r a l M a n a g e r K e y
V . K . G a r g N a m e s g i v e n a r e r e p la
A / 2 c a n d i d a t e s
P A t o A . P r o m o t a b le n o w
G e n e r a l M a n a g e r B . N e e d in g d e v e l o p m
L . M a t h e w s C . N o t s u it a b l e t o p o s
B / 1 1 . S u p e r i o r p e r f o r m a
2 . A b o v e A v e r a g e p e
A s s is t a n t G e n e r a 3l . M A a cn ca e g e r
p t a b l e p e r f o r m
R . K . A r o r a 4 . P o o r p Ae /r 2f o r m a n c e
B . K . N e h r u B / 3

D iv i s i o n : D iv is io n : D iv is io n :
H R M a n a g e rA c c o u n t in g & P la n n i n g M a n T ea gc he nr i c a l A d v
C . P . T h a k u r T a x a At i o/ 1 n M a n a g e Ar . N . G u p t a N . RA ./ 1 M u r t h y
A . T . R o y KC . /P 2 . R a o B / 1

N
o r t h e r n R e gC i oe n t r a l R eS g o i uo tn h e r n R e g i o n E M a a s n t ea r g n e Rr e g
Ma n a g e r M a n a g e r A . S u b r a m a n y a M m a n Ba g/ 2 e r
L . C . S r i v a t s a v S . PA . / 2K u m a r B A . K/ 1 . M e n o n R . KB r / i 1 s h n a
A . T h a p a r R . C P / 4a n d e y B / 3

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Models and techniques of

manpower supply
forecasting
B) External supply forecasting : External hires need to be contacted when
suitable internal replacements are not available. It is used only when the
cost of procuring the labour from internal sources is more and also the
present staff cannot be spared for the future assignment, the company can
refer to the external market A growing number of firms are now using
computerized human resource information systems to track the
qualifications of hundreds or thousands of employees. HRIS can provide
managers with a listing of candidates with required qualifications after
scanning the data base.

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Bibliography
 A.K Singh.

 www.wikipedia.com
 www.sap-si.com
 www.indianmba.com
www.shvoong.com

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Thank you

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Human Resource Planning and

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