Question

1. Identify some industries where the business demand is seasonal and predictable.

A few industries where the business demand is seasonal and where it is predictable would be

2. When do past ratios fail to provide an estimate of manpower requirements? What can be done to forecast manpower?
3. A large automobile company has seen an unprecedentedly high employee turnover in the last 6 months. How can the company assess and reverse this trend?
4. Discuss the costs of reducing headcount. How can we mitigate such costs?

Answer 1

A few industries where the business demand is seasonal and where it is predictable would be HVAC industry , they sale large no of air conditioner in the summer season . Similarly Airline industry Beverage Companies they see large demand for their cold drinks in Summer.

Past ratios may not get the seasonality nature of the business and fail to capture the demand requirement for the seasonal period. Lets say for the industries discussed in our example they may see higher demand in the 2nd quarter of the year (Apr-June). AN analyst looking at the last ratios may not see that Sales in 2nd Quarter Apr/June are much higher then the other quarters. SO an analyst reviwing the annual ratio figures may miss this part. To forecast the manpower company should plan based on the sales forecast considering the past trend , futue sales estimates, market factors and adjusting for the seasonal trends and one off.

A large automobile company that has seen an unprecedentedly high employee turnover in the last 6 months, company can analyse the reasons for the attrition and make the proactive actions to engage and retain the employees by giving them appropriate rewards , compensations and correcting other factors.

The costs of reducing headcount will be the cost of compensation package , training cost, recruitment cost, etc., Company can reduce this cost by appropriate planning , hiring , employee engagement and improving the engagement and reducing attrition.