Business Statistics

Statistical Techniques

Statistical Techniques

A wide array of statistical techniques is available for use in HR forecasting. Prominent among these are trend analysis, ratio analysis, scatter plot, and computerized forecast. Brief descriptions of these techniques are given as below.

> Trend Analysis : Trend analysis means studying of a firm’s past employment needs over a period of years to predict future needs.

> Ratio Analysis : A forecasting technique for determining future staff needs by using ratios between, some casual factor (like sales volume) and the number of employees required (for instance, number of sales people).

> The Scatter Plot : A scatter plot shows graphically how two variables, such as a measure of business activity and the firm’s staffing levels, are related. If they are, then if can forecast the level of business activity, should also be able to estimate personnel requirements.

> Computerized Forecast : Determination of future staff needs by projecting sales, volume of production, and personnel required to maintain this volume of output, using software packages.

Statistical techniques have certain limitations, some of which stated as below;

> First, their very complexity would lead away from a staffing focus.
> Second, all of these techniques are designed simply to project the past into the future. These techniques thus have limited applicability in organizations whose immediate past and/or future forecast are characterized by significant alternations in products and services, technologies, organizational structure. Obviously, this includes a large percentage of organizations of varying size today.
> Third, as they are dependent on the discovery of historical relationships between certain so-called leading indicators (e.g., sales or production volume) and head count, often these relationships are different to find, if found, they may not hold up in the future.