Workforce Forecasting

According to business dictionary  Forecasting is a planning tool that helps management in its attempts to cope with the uncertainty of the future, relying mainly on data from the past and present and analysis of trends.

Previously we explain the Workforce Planning and we referred to forecasting as a step of workforce planning,

-          “Recognize the differences and the gaps between workforce demand and workforce supply by forecast both demand and supply.”

 If we consider the workforce planning is the heart of strategic staffing then the workforce forecasting is the heart of workforce planning.

 In workforce planning process we have to forecast both labour demand and labour supply to find out the estimated numbers of needed employees.

Forecasting labour demand:

Forecasting labour demand is the process of estimating the future numbers of people required, the likely skills and competences will need, to make it more simple and to know what exactly the meaning of forecasting labour demand and what the purpose of it, we have to answer this question:

When should hire more worker and when should downsize employees?

The main controller in the hiring or laying-off processes is the products; when products demand increase that’s mean the firm must Increase the production capacity, which leads to increase the human capital in the firm … and more employees.

And vice versa; when products demand decrease firm must laying off some employees.

The firms can forecast labour demand both externally, based on product demand; Seasonal demand, rate forecast, interest rate, exchange rate, competition-based for. And internally by using several methods such as Managerial judgement, ratio-trend analysis, scatter plots.