Manpower Planning: Short Term Forecasting

Manpower Planning: Short Term Forecasting

Manpower Planning: Short Term Forecasting

Short term forecasting typically refers to predicting employment demands for a one year period. However, short term forecasts may be as long as two years for oil and steel companies and as short as three to six months for seasonal businesses, construction companies or computer manufacturing firms. The responsibility for short term forecasting usually belongs to the immediate supervisors and unit managers.

Short term forecasting can be carried out by following:

Budgeting:

Many companies carry out short term employment forecasting through the process of budgeting. Mangers are expected to identify the kinds of resources that they will need for the upcoming business period. If they will need additional personnel to fill new positions demanded by their unit’s objectives, then this information can be included in their budgets. The budget represents a plan of future business activity that includes financial and capital resources as well as human resource needs. Sometimes line managers are irritated by the time required to develop a budget, this time is usually very well spent and can have an enormous impact on the success and effectiveness of their units. The quality of short term forecasts is heavily influenced by a manager’s ability to make accurate estimates. A very good method for line managers to carry out short term forecasting is called the top down approach. The top down approach occurs when top managers place constraints either in terms of budget allocations or number of employees and then require line managers to plan their objectives given these constraints. This type of forecasting is often found in government agencies. Limited tax revenues may require governmental units to impose limits on spending, thereby forcing managers to decide which activities they can pursue given the limits. In this situation the number of employees who can be hired determine how many employees to hire. Therefore, the number of employees is constrained by available income.

Work Load Analysis:

Work load analysis is a type of short term forecasting. It uses information about the actual work content based upon a job analysis of the work that needs to be accomplished. This type of short term forecasting involves the use of productivity ratios to identify personnel needs. The work load analysis identifies both the number of employees and the kind of employees required to achieve the organizational goals. The total expected output from a unit is identified and determined in a first step of work load analysis. This is then translated into the number of employee hours in each job category that will be required to achieve it. If the level of output is expected to change, the change in employment can be estimated by calculating how many employee hours will be needed. For example, a company that manufactures chairs and expects to increase sales by 20 percent in the coming year needs to analyze which activities will be influenced by the increase. Though, the increased production level will not require additional clerical and managerial positions, the number of production jobs will need to increase. If it takes 1000 employee hours per week of production time to produce the present number of chairs, then it would require 1200 employee hours per week of production time to achieve a 20 percent increase. This increase of 200 employee hours per week would require 5 additional production workers, assuming that each worker works a 40 hour week. A similar analysis shall be made for other activities which are supposed to increase for producing extra chairs.