What is the relationship between demand and supply forecasting

what is the relationship between demand and supply forecasting

Human Resource supply forecasting is the process of estimating availability of human resource followed after demand for testing of human resource. different elements: job analysis, forecasting demand and supply, and legal Company president, manager, director of personnel, legal counsel, labor relations. Demand forecasting is based on the statistical data about past behaviour and empirical relationships of the demand determinants. 3. Levels Of.

External factors such as business cycles-economic and seasonal trends can also play a role in human resource demand Forecasting demand has two Approaches in explaining human resource planning in the organization: Is concerned with determining the number of employees required in a future period of time, under that approach there are uses of statistical or mathematical techniques which will be useful in estimating the quantity of man power through work load analysis and workforce analysis.

what is the relationship between demand and supply forecasting

As far as possible, the work load of each department should be estimated in tangible units. It is,therefore,necessary to make a provision for loss of current manpower due to these factors Qualitative Approach Skills analysisthe quality of manpower required varies from job to job. Therefore the quality of employees required for a job can be determined only after determining the job requirements. Under that approach there is less statistical mathematical, which will attempt to reconcile the interests, abilities and aspiration and individual employees with the current and future staffing needs of an organization but it rely on experts who assist in preparing forecasts to anticipate staffing requirements.

Demand and Supply Forecasting: Factors and Methods

In Forecasting supply Forecasting supply involves determining what personnel will be available. The two sources are internal and external: Factors managers typically consider when forecasting the supply of personnel include promoting employees from within the organization; identifying employees willing and able to be trained; availability of required talent in local, regional, and national labor markets; competition for talent within the field; population trends.

Under forecasting supply there are internally and externally factors for organization in supply of human resource Internal supply forecast is a succession planning or the career plans archest rated by organization. These internal factors are: It is a determinant of labour supply.

Confidentiarty is vital in setting up such inventory we prepare an up to date skill inventories allowing an organization to quickly much forthcoming job opening with employee backgrounds.

what is the relationship between demand and supply forecasting

Succession plans may be developed for management employees, on management employees or both. The process for developing such a plan includes setting a planning horizon, identifying replacement cad indents for each key position, assessing current performance and readiness for promotion, identifying career development needs. The overall objective is to ensure the availability of competent executive talent in the future. External supply consists of those of individuals in the labor force who is potential recruits of the firm.

The skill levels determine the relevance of the labor in a global way. When an organization lacks an internal supply of employees for promotions, or when the organization is staffing entry level positions managers must consider the external supply of labor.

For instance in an organization such as private school a management can decide to forecast supply of labor with different skills i. Other skills such as engineering, accountant and others they may required according to the needs of the organization.

what is the relationship between demand and supply forecasting

Population mobility and government policies, migration of the people can led the management to forecast the supply of labor due to migration of people with high skills, performance from one place to another.

Also according to government policy an organization can forecast supply of labor by establishing different policy and regulation on how to get and treat labor. Example of the policy are minimum wage, fiscal policy etc. Read this article to learn about the factors and methods of demand and supply forecasting! Demand forecasting is a quantitative aspect of human resource planning.

It is the process of estimating the future requirement of human resources of all kinds and types of the organisation. Forecasting of demand for human resources depends on certain factors such as: To improve productivity organisation needs better employees with skills and potential.

Productivity leads to growth but depends on the demands for the product of the enterprise in the market. The base of human resource forecast is the annual budget. Manufacturing plan depends upon the budget. Expansion in production leads to more hiring of skills and technology.

Methods of Demand Forecasting: There are three major methods of demand forecasting. They are as follows. Executive or Managerial Judgment method is the most suitable for smaller enterprises because they do not afford to have work study technique.

what is the relationship between demand and supply forecasting

Under this method the executives sit together and determine the future manpower requirements of the enterprise and submit the proposal to the top management for approval. Sometimes the members of top management sit together and determine the needs on the advice of personnel department. The forecasts so prepared sent for review to the departmental heads and after their consent approved the need.

what is the relationship between demand and supply forecasting

The best way is the combination of the two approaches. Executives at both levels equipped with guidelines sit together and determine the human resources need of the organization. It is also known as work load analysis. Under this method the stock of workload and the continuity of operations are determined. Accordingly the labour requirement is determined. The workload becomes the base for workforce analysis for the forthcoming years.

Here due consideration is given to absenteeism and labour turnover. This method is also known as work study technique. Here working capacity of each employee is calculated in terms of man-hours. Man-hours required for each unit is calculated and then number of required employees is calculated. The example is given below: Long range demand forecasting for human resources is more responsive to statistical and mathematical techniques.

With the help of computers any data is rapidly analyzed. The following are the methods of forecasting used under this category: Under this method the ratios are calculated for the past data related to number of employees of each category i.

Future production and sales levels, work load, activity levels are estimated with an allowance of changes in organization, methods and jobs. The future ratios are estimated. Then future human resources requirement is calculated on the basis of established ratios.

This method is easy to understand. Value depends upon accuracy of data. Econometric models are built up on the basis of analysis of past statistical data establishing the relationship between variables in a mathematical formula.

Demand and Supply Forecasting: Factors and Methods

The variables are those factors such as production, sales, finance and other activities affecting human resource requirement. Econometric model is used to forecast human resource requirements based on various variables. Elmer Bureks and Robert Smith have developed a mathematical model for human resource forecasting based on some key variables that affects overall requirement for human resources of the organisation.

They have given an equation. This method is used when the values of G, x and y are accurate. To obtain the values of G, x and y different statistical techniques are used. Regression analysis is used to forecast demand for human resources at some point of time in future by using factors such as sales, production services provided etc. This method is used when independent and dependent variables are functionally related to each other.

Nowadays computers are used to solve regression equations for demand forecasting. Supply forecasting means to make an estimation of supply of human resources taking into consideration the analysis of current human resources inventory and future availability.

The first step in supply forecasting is to take a stock of existing HR inventory as follows. Count of the total number of people available department-wise, sex- wise, designation-wise, skill-wise, pay roll-wise etc. It consists to number and category of employees of each job family i.