Human resource forecasting is a process that helps an organization determine how many employees it will need in the future to meet its strategic goals. HR forecasting involves establishing what jobs the company will need to fill, what types of skills employees must have to do those jobs and what challenges the company will face as it works to meet its staffing needs. Human resource planning has become an essential component in identifying and planning for a company’s changing personnel needs.
Scrutinize the Current Job Market
One of the first steps in forecasting workforce availability is to take a closer look at the economic and population issues that affect employment. Uncertainty in the economy and labor market can make forecasting more difficult. Human resource professionals must consider factors such as the current unemployment rate and demographic composition of the local job market. For example, trends such as a significant number of young graduates entering the workforce at the same time increases the potential for filling some job positions at lower wages and salaries. Age, training and level of education are other factors that affect the talent available in the job market.
Evaluate Organizational Needs
Learning more about the available workforce is just one element of the HR forecasting process. Organizations must examine their own human resource needs, which are dependent, in part, on the size and type of organization. Many organizations begin by collecting data from all departments. The next step is to assess the existing job positions within the organization. HR managers must take into account the types of jobs and number of employees performing in each class. After establishing what knowledge and abilities employees should possess to achieve the company’s long-term strategic goals, HR is responsible for evaluating the current skills of employees. This step helps determine if employees have the qualifications and expertise to satisfy the company’s future needs.
Anticipate Employee Turnover
HR must understand an organization’s present and future objectives in order to successfully forecast workforce demand that will support organizational strategies. In addition, human resources must anticipate the need for creating new positions and modifying current positions. Employee turnover rates place demands on organizations to improve employee retention and recruitment strategies. Knowing what kinds of labor are available in the job market is critical when it comes to filling vacant positions when employees retire; some are promoted to higher positions; and others leave to go work elsewhere.
Estimate Future HR Needs
Once an organization has identified what resources are available in the workforce and has defined its organizational needs, it can plan for future labor needs. Factors to consider include evaluating current employee potential, determining training needs and putting succession plans in place. A primary question managers should consider is whether employees are working in positions that fully utilize their strengths, abilities and experience. Recognizing talent and potential and focusing on employee strengths can prompt promotions or other shifts in job roles. Matching employees’ skills to an organization’s goals improves employee job satisfaction as well as helps a company to achieve its strategic objectives.