2.3 Forecasting Demand for Labour
Companies and people are constantly changing. It is a challenge to identify future labour demands. However, an HR Plan can reduce the risk of companies being caught with a labour shortage or an excess supply of labour. HR departments need to forecast the need of people for its company. A forecast is an estimate of a company’s future human resources to succeed. How companies forecast is weighted on several factors, which are listed below.
External Trends Competencies
- Evaluate the credibility of sources of information.
- Keep current on business information and trends.
- Maintain awareness of broad economic, societal, technological, political, global, and demographic trends
- Identify HR opportunities and risks inherent in changes in economic, societal, technological, political, and demographic forces.
- Evaluate the applicability of new concepts and technology to the practice of HR within the organization.
Source: HRPA Professional Competency Framework (2014), pg. 11. © HRPA, all rights reserved.
Strategic Plan
This plan determines the long-term objectives of the company related to growth, products/services, markets, and how many employees it needs to meet these objectives.
Legal Issues
The political, legal and social changes within an economy help companies predict the future. The Human Rights Act has impacted how employers hire and treat employees. Major lawsuits against employers can change how companies conduct business. Demographics change, and so do the attitudes of employees ie. Baby boomer’s needs are very difference than Gen Y’s employment needs. Federal and provincial laws impact HR planning ie. Equity programs.
Competition
In today’s workplace, the global market is expanding. What a domestic company could expect to produce is now impacted by international competition. Some industries change more than others. Car manufacturing remains stable, while high-tech companies need to be changing and adapting prices, markets and human resources continually.
Technology
Technological changes affect supply and demand. While technology has reduced the need for some jobs, it has created more jobs in other fields of work. It was predicted the creation of computers would eliminate masses of employees. Automation has changed how employees perform their jobs and have higher skill levels. Yet, there has been little change in the demand for employees. In fact, high-tech jobs are one of the highest-demand fields in the world of work. Artificial intelligence is another growing field of work.
Turnover of Employees
Turnover is when an employee leaves the company through resignation, layoff or firing. Sometimes the employee decides to leave, while other times it is the employer who decides if the employee will leave. In some cases, temporary layoffs or other leaves of absence only create a temporary gap for the employer. Regardless, companies need to be prepared for turnover.
Demographics
Most companies have a demographic profile. Think about Facebook. It tends to hire younger employers. In women’s fashion, these companies would tend to hire females. The Baby Boomers, generally now reaching retirement age, will continue to leave gaps in the workplace. Companies need to use data to predict who will retire and when they will retire to ensure they have enough replacement employees.
Budgets
Company budgets may increase or decrease. Companies plan their human resources based on profits and profit margins. If the company’s sales or production are down, they may need to lay off employees.
HR departments are responsible for developing HR Plans, considering all these factors. With the changing world of work, HR managers have a challenging task to predict future company demands. They use several different methods to estimate demand, outlined in the next section.
“2.3 Forecasting Demand for Labour” from Human Resources Management – 3rd Edition by Debra Patterson is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, except where otherwise noted.
