Importance of Resource Forecasting
Human resource planning based on a calculative forecasting can improve operational efficiency and increase the profitability of a business. HR planning doesn’t include making staffing decisions on the fly or by any means be just a guestimate. A strategic HR policy can eliminate confusion, streamline the resourcing and save precious time for a business. Including forecasting as an integral part of HR planning fulfills organizational objectives by ensuring the business is neither overstaffed nor understaffed.
The key aspects of the Forecasting are answer to “How Many”, “When” and for “What skills”? There are multiple models ranging from Statistical calculations, Management Judgment, Work –study analysis and many more. Choosing the right fit or a combination of various approaches would decide the success of the resourcing practice for you.
The criteria’s for selecting a resourcing model – Now that you know it’s not as simple as it seems with multiple complexities existing for each organization. Here are some complexity factors a forecasting model would have to take in to consideration.
- Growth of an organization – rate at which it moves
- The ad-hoc projects requirements – impacting the balance
- Identifying the ideal buffer
- Attrition rates
- Technology trends – changing the whole game of demand and supply.
- Customer requirements – baselining the HR requirements based on customer needs
And many more could be added to this list based on the organization. For example resourcing in any manufacturing organization would be entirely different from what a technology company would face.
The participative Approach to Forecasting – Organizations may adopt a combination of bottom-up or ‘top-down’ approach of resource forecasting where in bottom-up approach the project managers identify the resourcing requirement and provide to top management while in top-down the Senior management identifies where organization needs to move and identify resourcing as per that. The combination of this where top management and Project /program managers meet and decide about the future resource requirement. So, demand of human resources can be forecasted with unanimity under this approach. This approach is ideal when you have a variation in the needs and the business is dynamic in nature.
WorkLoad Analysis – This technique is suitable where the estimated work-load is easily computable, typically when you are running a support organization or similar to a manufacturing organization. Under this method, estimated total production and activities for a specific period are identified based on customer needs and market trends. This information is translated into number of man-hours required to deliver considering the capabilities of the resources and the availability on the resources. Management experience can help in translating the work-loads into number of resources required. Thus, demand of human resources is forecasted based on estimated total work and skills required to deliver that in the stipulated time period.
There are other models that have been adopted and implemented but most of the organizations see a combination of these as a practice. These resourcing /forecasting models should ideally work towards achieving or enabling the following.
- Conflict resolution – between delivery teams, resourcing and recruitment teams
- Improve project delivery
- Reduce administration costs of resources along with bench resources.
- Identifying training requirements
- Reducing Opportunity loss – Ensuring incapability of resources does not result in opportunity loss.
At the end of the day resourcing is a key function in an organization ensuring that your organizations goals are well supported as far as Human resources are concerned. Making sure On-time, with In Cost and right skills are available, that’s the prime objective of the resourcing function.
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