How to make a gross estimate of human resources demand 1. Determine an acceptable measure of output a. Sales (revenue ) Value added Physical units Physical capacity Accounts serviced Population served mrhmmnu\" Enrollment 2. Determine an acceptable measure of human resources input: a. Average number of employees per year b. Total employee hours worked per year c. Total labor cost or compensation cost per year 3. Determine the historical relationship between the output and the input 4. Determine the pattern of change in this ratio . This is the productivity (or efficiency ) rate . 5. Forecast the level of the predictor (output )for the year of concern . 6. Forecast the productivity rate based on historical analysis and anticipated technological changes . 7. Apply the general formula : Where : Ex: HR input measure in the year forecast En = HR input measure in the base year 0)( = Output (predictor )measure in the year forecast on = Output (predictor )measure in the base year P = Productivity (efficiency) rate x: number of years between base year and year of forecast 8. Make adjustments to take into account factors not included in the formula