Alternative methods of forecasting risks in Naval manpower planning

This paper compares qualitative and quantitative methods to incorporate risk in manpower planning, using the case study of UK Naval Services. The methods provide complementary insights in forecasting risk, and thus, offer an improvement over the use of a single method. Qualitative methods alone overstate impacts that lead to inaccurate ranking of risks, resulting in a management response of compliance rather than action. The qualitative analyses support the quantitative analyses in identifying the range of potential explanatory variables and suggest appropriate management interventions. The quantitative method of risk forecasting using an Error Correction framework identifies more accurately the range of possible outcomes for which management must prepare. The quantitative approach also helps to identify significant explanatory factors in risk management. Its use may be limited due to non-availability of historical data, and could place too much emphasis on a limited set of explanatory factors. A staged approach of mixed methods is recommended. A higher weight should be given to past observations than to experts' subjective opinions. Periodic repeated validations by qualitative methods should help effective working of quantitative methods.