Forecasting
Understanding, planning, and managing human resource functions is critical. Balancing the demand and supply of labor is essential in guaranteeing effective human resource performance at Highline Financial Services. The management systems theory asserts that, like a living organism, organizations are made of numerous interdependent component subsystems that must work harmoniously to ensure collective success.
One aspect of human resource planning that affects the demand for labor is the size of the task. The larger, or more complex a task is, the more labor units will be demanded, holding other factors constant. Consequently, ensuring a balance between the projected human resource demand, as affected by the size of task, and supply is essential for business continuity.
The company’s demand for labor is affected by the levels of projected demand for the services they offer. The paper assumes a direct and positive correlation between the demand for services and demand for labor. The higher the demand, the larger the size of tasks and the more labor units that Highline Financial Services will demand.
Analysis of the Case
Given the case of demand for services A, B, and C, the following is deducted. The demand for Product A and B display less skewing than that for C. Consequently, the best-suited projection mechanism for the two is the less complicated linear trend projection. In the case of C, employing a two-month moving average is best suited. It helps smoothen the trend, decrease deviations from the mean, eliminate outliers, and enhance the forecasts’ accuracy.
- Linear Trend Forecast for A
By developing the linear equation y = 4.2857x + 55.714, projections for service A’s demand are possible for the next four quarters. As represented in Chart 1 below, there is a growing demand for service C that will extend across the projected four quarters.
Table 1: A Representation of Historical Demand and Forecasted Demand
| Quarters | Historical Demand | Trend line and Forecasts |
| 1 | 60 | 59.9997 |
| 2 | 45 | 64.2854 |
| 3 | 100 | 68.5711 |
| 4 | 75 | 72.8568 |
| 5 | 72 | 77.1425 |
| 6 | 51 | 81.4282 |
| 7 | 112 | 85.7139 |
| 8 | 85 | 89.9996 |
| 9 | 94.2853 | |
| 10 | 98.571 | |
| 11 | 102.8567 | |
| 12 | 107.1424 |
- Linear Trend Forecast for B
The equation y = -4.119x + 97.536 denoting a negative gradient and a decreasing trend, as seen in chart 2, portrays a projected decreasing demand for product B.
Table 2: A representation of Historical Demand and Forecasted Demand of Service B
| Quarters | Historical Demand | Forecasts Demand/Trend Line |
| 1 | 95 | 93.417 |
| 2 | 85 | 89.298 |
| 3 | 92 | 85.179 |
| 4 | 65 | 81.06 |
| 5 | 85 | 76.941 |
| 6 | 75 | 72.822 |
| 7 | 85 | 68.703 |
| 8 | 50 | 64.584 |
| 9 | 60.465 | |
| 10 | 56.346 | |
| 11 | 52.227 | |
| 12 | 48.108 |
- Moving averages for Service C Demand
The sharp demand deviations for service C are best moderated using a two-month moving average before developing a trend line.
Table 3: A Two-Month Moving Averages and Forecast Demand for Service C
| Quarters | Timeline | Service C | M2 | Trend Line/Forecasts | |
| Year 1 | 1 | 1 | 93 | ||
| 2 | 2 | 90 | 91.5 | 95.214 | |
| 3 | 3 | 110 | 100 | 95.714 | |
| 4 | 4 | 90 | 100 | 96.214 | |
| Year 2 | 1 | 5 | 102 | 96 | 96.714 |
| 2 | 6 | 75 | 88.5 | 97.214 | |
| 3 | 7 | 110 | 92.5 | 97.714 | |
| 4 | 8 | 100 | 105 | 98.214 | |
| Forecast Year 3 | 1 | 9 | 98.714 | ||
| 2 | 10 | 99.214 | |||
| 3 | 11 | 99.714 | |||
| 4 | 12 | 100.214 |
The linear equation y = 0.5x + 94.714 in Chart 3 portrays a positive trend reflecting an expected growth in demand for the next four quarters.
Discussion and Implications
The projections offer a view of what to expect in future. The use of linear and moving averages projections helps magnify the trend and offer a clearer perspective for the Managing partner Freddie Mack. In turn, the manager can plan adequately to balance the company’s financial and human resource needs, as per the systems theory. The company ensures that other subsystems, especially the service department, do not experience shortages of labor inputs, decreasing value dispensation. A mismatch between labor demand and supply also risks placing a strain on the limited available labor resources, or, in the event of an oversupply, resulting in resource wastages that reflect in poor financial performance.
The forecasted rising demand for service A implies an expected increase in the demand for labor units. The case is similar for service C, although the scenario presents a more moderated increase than the case in A. The situation is different for C, where demand for the product is expected to drop over the four quarters illustrating decreasing demand for labor units.
Consequently, the manager needs to account for this in planning. It is advised that Frederick reallocates more funds towards the human resource function to support an increase in labor units’ supply and bridge potential demand gaps. The increases affect the production of services A and C by ensuring an adequate supply of skills. In service B, the partner needs to lay off more workers, freeing up more funds for use in other areas of importance.
Formalized forecasting methods are beneficial in many ways. According to Wilson, Keating, and Galt (2009), the mechanisms are more objective than the more subjective informal approaches. Often, the abstractness of factors determining future performance and the associated uncertainties can encourage policymakers to make biased assessments. Employing recognized and standardized projection methods decrease inaccuracies and promote shared understanding. Different professionals engaged in similar operations can always find similar results, which also empowers cooperation and networking.
Overall, formalized methods of forecasting are critical in balancing expected demand and supply of services and labor. Through these tools, Freddie Mark can plan adequately for the next financial year by reallocating resources effectively. According to the assessment, the department responsible for service A and B need to increase labor supply to meet the projected deficit. Conversely, department B might have to lay off some workers to avoid human resource wastages because of declining demand for its services. By accounting for these aspects, Highline Financial Services strengthens its competitiveness and decreases the prospects of its services being impeded by resource demand and supply misalignment.
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