Strategic Human Resource Management

Section Three

Organizational Characteristics

Several other factors influence the selection of forecasting
techniques. One such factor is the size of the organization. For
example, minimum numbers of incumbents in the various
positions are necessary to develop reliable probabilities of
transitions from one position to another. Nonetheless,
companies having as few as 2,000 employees have developed
effective human resource forecasting models. Size also is
related to the sophistication of forecasting techniques, with
larger companies tending toward greater sophistication,
although industry and planning horizons also affect the
relationship. Human resource forecasting also varies in
sophistication across divisions within large companies. Another
factor in selection of forecasting techniques is the complexity of
the organization. With greater complexity there are more
differences in model parameters and fewer common
assumptions that can be applied. Further, another factor is that
with longer-range fore-casting horizons, there is a tendency to
use more sophisticated forecasting techniques.^33