Demand forecasting techniques for workforce planning

Demand forecasting for workforce planning sits at the heart of 5HR02 AC 2.2, and this video addresses it by examining three distinct techniques: managerial judgement, working back from costs, and systemic approaches. Rather than treating these as interchangeable options, the video considers how each one relates to different organisational contexts, data availability, and strategic priorities, building the kind of evaluative understanding that AC 2.2 requires.

Managerial judgement receives close attention, including its bottom-up and top-down variations and the cognitive biases that can distort estimates produced through this method. The video then turns to working back from costs, a financially grounded technique that anchors headcount decisions in labour cost parameters — a particularly notable consideration given that labour typically constitutes the majority of expenditure in service-based organisations. The discussion of each technique includes both its strengths and the circumstances under which it can produce misleading or strategically limited forecasts.

Systemic approaches form the third strand, covering ratio-trend analysis, regression analysis, work study methods, and scenario modelling as distinct analytical tools for projecting workforce requirements. The video examines what each of these methods demands in terms of data and analytical capability, and where the assumptions underpinning them may break down — particularly during periods of organisational transformation. Across all three techniques, the video builds an evaluative framework that allows learners to assess when combining approaches produces more robust demand forecasts than relying on any single method in isolation.