The information gathered from external environmental scanning and assessment of internal strengths and weaknesses is used to predict or forecast HR supply and demand in light of organizational objectives and strategies. Forecasting uses information from the past and present to identify expected future conditions. Projections for the future are, of course, subject to error. Changes in the conditions on which the projections are based might even completely invalidate them, which is the chance forecasters take. Usually, though, experienced people are able to forecast with enough accuracy to benefit organizational long-range planning.
Approaches to forecasting human resources range from a manager’s best guess to a rigorous and complex computer simulation. Simple assumptions may be sufficient in certain instances, but complex models may be necessary for others.
It is beyond the scope of this text to discuss in detail the numerous methods of forecasting available, but a few of the more prominent ones will be highlighted.
Despite the availability of sophisticated mathematical models and techniques, forecasting is still a combination of quantitative method and subjective judg- ment. The facts must be evaluated and weighed by knowledgeable individuals, such as managers and HR experts, who use the mathematical models as a tool rather than relying on them blindly.
Forecasting Periods HR forecasting should be done over three planning periods: short range, intermediate, and long range. The most commonly used planning period is short range, usually a period of six months to one year. This level of planning is routine in many organizations because very few assumptions about the future are necessary for such short-range plans. These short-range forecasts offer the best estimates of the immediate HR needs of an organization. Intermediate and long-range forecasting are much more difficult processes. Intermediate plans usually project one to five years into the future, and long-range plans extend beyond five years.
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