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198 PART 2 Managing Business Behavior
example, the events of September 11, 2001, clearly changed many corporate HR
demand forecasts.) Is the college planning any new initiatives, such as an endowed
center for international accounting, that may have an impact on this analysis? Gov-
ernment data and computer simulations testing various scenarios will likely help in
conducting such forecasting.
Forecasting Human Resources Supply
Forecasting HR supply involves looking at both internal and external labor supply.
In the accounting department example, it may be possible that individuals already
working or coming to work at the college have the credentials for this job or can be
retrained or redirected to do it. Conversely, it may be necessary to hire for this job
from the external market. In general, employers have an easier time making fore-
casts about the internal supply of labor than about the external supply.
Internal Labor Supply Forecasts. Organizations use various techniques to
replacement charts Charts outlining try to forecast the internal supply of labor. At the managerial level, replacement
possible replacements for key charts of key personnel and their possible replacements already within the organi-
personnel
zation are kept. In essence, firms keep a list of replacement workers ready and
able to step into top jobs in case of an unexpected event (e.g., a plane crash dis-
abling or killing the company’s CEO or CFO), resignation, retirement, and so on.
skills inventory A data bank listing Companies also frequently use computer technology to compile a skills inventory,
skills, experiences, and aspirations of which is a data bank containing information about the skills, experiences, and aspi-
present employees
rations of all present employees. This data bank then aids both line and HR man-
agers in identifying company personnel to fill new or newly available positions. For
example, if a company is opening a new office in Lisbon, Portugal, and is looking to
transfer employees who speak Portuguese to that office, the computerized skills
inventory can very quickly identify possible candidates.
External Supply Forecasts. Forecasting the external availability of certain
types of labor is a somewhat more difficult exercise for most businesses. Figures
supplied by various government sources, such as state employment commissions,
and by colleges with respect to the numbers of majors in different fields may be
helpful.
Matching Supply with Demand
Once armed with the forecasts of the supply of labor, HR and other managers can
begin making decisions. If it appears that the demand for personnel is going to be
greater than the supply, recruiting efforts will likely be commenced. Recruitment
may be for permanent employees or possibly for contingent or temporary work-
ers—a trend that is growing. Conversely, if the labor supply is forecast to likely be
greater than the demand, paring back the workforce needs to take place. Most
organizations initially try to achieve such paring back by way of attrition, that is, not
replacing employees when they leave. If attrition doesn’t bring supply and demand
into proper balance, other actions ranging from special early retirement incentive
programs to layoffs may be necessary.
reality What types of jobs do you think are going to be the most plentiful in
CH ECK your community over the next decade?
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