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 future human resources that a company needs to be successful. How companies forecast is weighted on several factors.
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 demands 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 makes the decision 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 the field of women’s fashion, these companies would tend to hire females. The Baby Boomers, generally, now reaching retirement age, are going to 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 sales or production are down in the company, they may need to lay off employees.
