Forecasting Human Resource Needs

Human resource needs are typically the most costly piece of any project. It is especially costly if either over estimated and therefore over compensated for or under accounted for and therefore forcing the project to not meet the desired deadlines. If the later occurs often companies are forced to either push out deadlines or hire in costly outside contractors to force the project back on track with the desired timeline. Either way ultimately undesirable results are experienced. Only when resources are properly accounted for, and budgeted for, does the project team find themselves in a winning position.

There are many methods that are available to assist with the forecasting of these human resource needs. There are two major approaches to forecasting techniques, qualitative and quantitative. Some examples of qualitative approaches to forecasting are estimation techniques, expert opinion, Delphi, and averaging. A few of the possible techniques that could be used with the quantitative approach are trend analysis, regression analysis, simulation techniques, and Markov.

In order to monitor and insure the fulfillment of the human resource requirements, the organization will want to include items such as Performance Reviews. Performance reviews measure, compare, and analyze schedule performance such as actual start and finish dates, percent complete, and remaining duration for the work in progress. (Project Management Institute, 2008, p. 162) During the project completion the Performance Review is used to track the current status of tasks within the project including the completion percentage. Based on the scheduled start and end date and the current completion percentage the schedule variance (SV) and the schedule performance index (SPI) can be calculated. This can be easily completed using a simple spreadsheet within Excel. Project managers use Earned Value Management (EVM) techniques to compare the schedule performance (achieved by getting information from the Performance Review we discussed earlier) and the cost of the performance (what have we spent so far and what will we spend). In short what we are trying to achieve is creating a basic business value for what we spent model. This is often a report or graph that will be provided to the project sponsors before during and after the project completion. The Earned Value (EV) can be compared to actual costs and planned costs to determine project performance and predict future performance trends. (KIDASA Software, 2010) Earned Value shows how far off we are with regards to the budget and time that should have been spent in comparison to the actual amount of work done to date. (Haughey, 2009) Another key term that needs to be discussed with regards to this subject of schedule variance (SV) and schedule performance index (SPI) is that of the Variance Analysis. The SV and the SPI are used to assess how big of a variation we have in comparison to the schedule baseline. (Project Management Institute, 2008)

The Monte Carlo simulation method is a way of simulating ranges of projected needs for project resources, time, etc. In order to complete a Monte Carlo Simulation the project manager will need an application that can reiterate the simulation up to several hundred times. In short all that the project manager needs to do is create a baseline experienced oriented guess on what the resources that will be needed for each task. He or she will need to provide a low value and a high value for the simulation to be addressed. These highs and lows will for each task within the project will be used to produce a high and low value of resources that will be needed for the project. The simulation would then be ran several hundred times in order to increase the accuracy of the estimated values. (, 2010) One application that could be used to perform this is the Risk AMP application. This or course could be used in order to project the human resource needs of the project.

When looking at the human resource needs many other variables will need to be taken into account when discussing international projects with resources located within many disperse countries. One of the biggest variables that needs to be taken into account is the potential for different work hours. Some countries only work 4 days a week, while others may work 6. Some countries take long afternoon breaks and then come back to work during the cooler evening hours. These discrepancies with work schedule must be accounted for and potentially the project manager may need to set different timelines within each country in order to complete the work. Another option for the project manager is to simply look at the number of man hours it will take in order to complete the task and simply within those countries that do not work as much, increase the head count in order to maintain the schedule. This will result still in the same number of man hours. Some countries may also be more productive during the work hours and therefore require less time to achieve the same tasks. For instance many other countries, at least perceive, US employees as people that often stand around the water cooler all day and do not produce well. Again a statistical baseline will need to be created in order to achieve accurate goals and forecasts within the project.

The To-Complete-Cost Performance-Indicator or TCPI is used as an indicator index that shows how efficient the resources working on the project should be used during the remaining time of the project. In order to calculate the TCPI the project manager will need to know the total budget for the project, earned value (discussed previously), and the actual expenditure of resources. In short the TCPI = ( Total Budget – EV ) / ( Total Budget – AC ). (Tutorials Point, 2010) In short, TCPI is used to determine what the project performance that is required to complete project as budgeted.

Haughey, D. (2009). What is Earned Value? Retrieved August 15, 2010, from Project Smart:

KIDASA Software. (2010). What is Earned Value Management? Retrieved August 15, 2010, from Earned Value Management:

Project Management Institute. (2008). A Guide To The Project Management Body of Knowledge. Newtown Square: Project Management Institute, Inc. (2010). What is Monte Carlo Simulation? Retrieved August 14, 2010, from

Tutorials Point. (2010). To Complete Cost Performance Indicator (TCPI). Retrieved August 15, 2010, from Tutorials Point:


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