Most job candidates are capable of entering data to spreadsheets, and creating models and report based on predefined formulas. But forecasting is a different story…. You have to define the formulas, choose the model, set the variables, and that’s not easy to do.
Employers always prefer to hire analysts with experience in forecasting and they use this question to see whether you belong to this privileged group. But what to do if you have no experience with forecasting?
“I have never done any forecasts” would be a bad answer. If you really haven’t done any forecasts yet, try to do some prior to your interview, and talk about those later!
Everyone makes mistakes
Bad forecast should not let you down. We are learning all time, and employers do not expect you to be perfect, especially if you are applying for an entry level job. Feel free to speak about bad forecasts you made, and don’t forget to mention the lessons you learned from the experience.
Describe not only the best forecast, but also how the employer (or yourself) benefited from the forecast.
When you talk about a great forecast you’ve made, consider mentioning the value it brought to your employer.
I may forecast that USD/EUR exchange rate will drop next Monday. However, if the company isn’t involved in international trade, or Forex, and does nor reinvest capital, it’s not an important forecast for them…. The value is what matters at the end of the day.
Once I used the Bayesian Method to forecast the prices on the local stock market. It was at school, for my seminary project. However, the real market prices differed to my estimations, and it ruined the theoretic part of my work. On the other hand, I learned that Bayesian Method is not sufficient and started to use combination of methods, especially Bayesian and Reference Class. It made my forecasts more accurate. After all, it was a good learning experience.