Implications of future demand of manpower


Once an assessment of the organization’s current human resources situation has been made and the future direction of the organization in terms of revenue forecasts has been considered, a projection of future demand for human resources can be developed. Human resources demand is affected by an organization’s environment. For example, the state of the economy can alter demand for a product or service and thus affect the need for certain types of employees. In addition to this, changing organizational requirements, can also influence the demand for human resources. Similarly, internal work force changes, such as retirements, resignations, terminations or deaths cause major shift in the need for human resources. Several basic techniques are used to forecast human resources demand. While judgmental forecasting is based mainly on the views of knowledgeable individuals, quantitative forecasting relies on numerical data and mathematical models. Finally, technological forecasting, aimed mainly at predicting long-term trends in technology can also help predict future demand.

Implications of future supply

Demand is only one side of the equation. Managers must also consider the other side—supply of sufficient human resources, to operate effectively. Managers consider both internal and external labor supplies. One prime source is a pool of current employees who can be transferred or promoted to help meet demands for human resources. Besides, internal labor supply, some reliance on the external labor supply is also necessary. Recent graduates from schools and colleges expand the supply of available human resources. Of particular importance in this category are women. Past high, levels of inflation and accelerating prices as well as changing attitude, aspirations and career expectations, have all acted as forces to increase the number of women entering the labor market.

Reconciling demand and supply

After estimating the demand and supply of human resources managers must often take steps to balance the two. If estimates show that the internal supply of labor is too large, then managers need to make plans to reduce the numbers of employees through measures such as resignations and retirements, or voluntary retirement schemes. On the other hand, if additional employees are necessary, then plans must be made for promoting and transferring current organization members and for hiring new workers. Thus, the objective of human resources planning is to bring together forecast of future demand and supply. The result of this effort will be to pinpoint shortages both in number and in quality and to highlight areas where overstaffing may exist

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