Human Resource Planning
Human resource planning-workforce planning-matches the number and mix of people the organization will need against the number and mix it will have. Questions test the forecasting techniques, the gap calculation, and the choice of action program when a surplus or a shortage appears.
Forecasting demand
Quantitative demand tools: trend analysis (projecting past staffing levels forward), ratio analysis (a stable relationship such as sales per employee or one supervisor per twelve operators), scatter plots (plotting two variables to fit a line), and regression. Qualitative tools: managerial judgment, nominal group technique, and Delphi-anonymous, iterative polling of dispersed experts until consensus. Delphi is the answer when a stem stresses anonymity and multiple rounds. Convert part-time and seasonal needs to full-time equivalents before comparing.
Forecasting supply
Supply forecasting looks inward and outward. Internal tools are the skills inventory in the HRIS, replacement charts (backups for key jobs with readiness ratings), succession plans, and Markov or movement analysis (historical transition probabilities between job categories). External supply uses labor market analysis: unemployment rates, graduation output, competitor demand, and demographics.
Gap analysis and action programs
Compare demand with available supply. A shortage calls for recruiting, training and promotion, transfers, overtime, contingent workers, outsourcing, or automation. A surplus calls for a hiring freeze, attrition and early retirement incentives, reduced hours, transfers, retraining and redeployment, and layoffs last-planned with WARN notice in mind.
Worked example
Sales next year are projected at $48 million. Last year sales were $40 million with 160 employees, and the ratio has been stable. Demand = $48M ÷ ($40M ÷ 160) = $48M ÷ $250,000 = 192 employees. Supply: 160 current − 10 retirements − 13 expected voluntary separations (8% of 160) = 137. Gap = 192 − 137 = 55. Because the gap is large and the ratio depends on trained operators, the plan leads with recruiting plus a training pipeline; overtime alone cannot close it.
Traps that cost marks
- Confusing Delphi with nominal group technique.
- Applying ratio analysis when the ratio has been unstable.
- Counting replacements as net additions.
- Filing succession planning under demand instead of supply.
- Recommending layoffs before attrition and retraining.