Introduction

In a world where the foundation of every action is regarded as a pivotal role for an

organization, it has allowed for the creation of focused area of discipline. In which it is called

planning. Within this context we can deduced that ‘planning’ is regarded as human resource

planning (HRD). Human resource planning is the process of getting the right number of qualified

number of people into the right job at the right time. Where it is the system find matches for the

supply of people whether internally of externally with the openings the organization expects to have

over a given time (l.Bayer, 2008). It is basically a function within human resource itself that governs

how the workforce is predicted and recruited according, or in other words the demand and supply

aspect of the workforce. In order for us to understand the supply and demand techniques used in

Human resource planning, we must first understand what human resource planning is all about.

Human resources consists of four basic steps. The first step is to determine the impact of the

organization’s objectives on specific organizational units. (l.Bayer, 2008) . Within this step, it is where

the organization is making statements of expected results ha are designed to give the organization

and its members , the direction that they are trying to go and what is the purpose for them to be

established.

The second step is to define the skills required to achieve the organizational objectives

(l.Bayer, 2008). His is where demand comes in. Where by this step in human resource planning deals

with what he organization needs in order to perform the way they are supposed to and to achieve

them through having the, This may include predicting the number of human capital capabilities

within the workforce. This is done through methods that will be discussed further on later.

The third step of human resource planning is to determine the additional human resource

requirements in light of the organization’s current human resource (l.Bayer, 2008). This is where the

organization assesses the current capability of the workforce and whether hey require additional

growth. In which it refer towards whether the organization in light of the workforce, is in requiring of

more workforce for the organization.

While the fourth step in terms of planning in human resource planning is in developing

action plans to meet the anticipated human resource needs (l.Bayer, 2008). This step is he step

where the demand that is required in the organization (step three) is being taken care off. This step

will venture into the ways on how to put the demands o action that can be used for the organization.

Supply and demand techniques that are used in manpower planning

Within any current organization, having the ability to produce data on the prediction of the

supply and demand of their workforce is crucial. This is because it would be an internal defence and

alert system for the organizational human capital or talent pool, whereby the ability to predict them

would allow the organization to look into new talents or to very much reducing them if it is

necessary. In order to do that there are many methods that are used in order to predict the supply

and demand of the workforce internally and externally. Although the ways of predicting within HR

are split in two, where judgement and mathematical based predictions exist, both camps are widely

used throughout the world. At the same time judgment can also be referred as an opinion based or

qualitative based. Meanwhile the mathematical based can be also be called as qualitative based. A

few of the ways or techniques used in an organization to can predict the workforce are as follows.

i) Delphi Technique

Delphi technique was originally developed by Rand corporation to

enable groups to consult experts and use their predictions and forecasts

about future events (Goodman, 2007). The Delphi technique, mainly

developed by Dalkey and Helmer in 1963, at the Rand Corporation in the

1950s (Hsu, 2007) .It is a widely used and accepted method for achieving

convergence of opinion concerning real-world knowledge solicited from

experts within certain topic areas. It predicated on the rationale that,two

heads are better than one, or in this case more heads are better than one

(Hsu, 2007). The Delphi technique is designed as a group communication

process that aims at conducting detailed examinations and discussions of a

specific issue for the purpose of goal setting, policy investigation, or

predicting the occurrence of future events (Hsu, 2007)).

Common surveys try to identify “what is,” whereas the Delphi

technique attempts to address “what could/should be” (Hsu, 2007). Basically

how the Delphi techniques works is having a group of people answering

questionnaires, and after they finish off, their answers will be evaluated,

when they are asked to answer questionnaires deriving from the previous

session, this time, their previous answers are being examined by them. This

process will go on until the best and final answer could be seen from the

groups, therefore having some kind of prediction of whatever that is that

they are trying to predict. For example, if an organization wants to predict of

the trend for University graduate likely to work after their graduation, the

Delphi technique can be used to determine and predict what area or aspect

of work they are likely be involved in after they have finished working

through a set of choices and consensus in the end by the experts.

However, it is noted that by conducting a Delphi study can be time-

consuming (Hsu, 2007). Specifically, when the instrument of a Delphi study

consists of a large number of statements, subjects will need to dedicate

large blocks of time to complete the questionnaires.

ii) Managerial estimates

Another way to predict the supply and demand used for manpower

planning is in terms of using managerial estimates Managerial estimates is a

judgemental method of forecasting that has the managers in the

organizations to make estimates of future staffing needs and requirement in

the organization, or in other words the demand for workforce in the

organization. Managerial estimates is a judgemental method, where this

type of technique require little or none mathematical prediction model.

Managerial estimates is where the managers estimate future staffing needs

based from what they have experienced in the organization or other

organizations that they have been into (l.Bayer, 2008).

Through this, the managers then will see what seem fit for the

organization workforce demand. These type of predictions or estimates can

be made by top level managers, where this might be the CEO or senior

managers in the organizations. Where they will base their prediction on

their previous experience. This will then be passed down towards the lower

level managers. When the lower manager had made their predictions, then

these prediction will be evaluated by the top managers, and be

contemplated to finalize the prediction of the workforce in the organization.

Thus allowing for the organization to estimate how and what kind of

demand the organization will face. This kind of prediction is a personalized

touch for the organization for it is made by the internal managers in it.

iii) Scenario analysis

Scenario analysis involves using workforce environmental scanning

data to develop alternative workforce scenarios (l.Bayer, 2008). These

scenarios are developed in brain storming sessions with line managers and

human resource managers, who forecast what they think their workforce

will look like 5 or more years into the future. Once forecasts are seen clear

enough for the organization to use, the managers the work backwards to

identify key change points.

By using workforce environmental scanning data to develop

alternative workforce scenarios, the organization can determine what kind

of environment will form around the organization within the coming years,

thus allowing them to adjust and tinker with the data that they have and see

how it will progress along as time pass with regards of using the data. The

biggest advantage of scenario analysis is that it encourages open, out of the

box thinking. For instance, workforce data may include environmental

scanning such as demographic growth, education standards, competition,

fiscal surroundings and many more. While the internal factors that may be

included are the number of workers, costs, quality costs, revenues, sales and

others (Kesti, 2011) . By understanding their environment in forms of data,

he people who are handling this, can later translate these data into a

statistical system which allow for their prediction of the organization’s

supply and demand for workforce. Although this type of analysis is not only

limited to workforce prediction, it is be useful technique to be used by any

organization wishing for a better prediction of what the future form of their

workforce will be.

iv) Benchmarking

Another technique that can be used to predict the supply and

demand for the workforce in the organization is through using

benchmarking. Benchmarking is the technique that thoroughly examine

internal practices and procedure and measuring them against the ways of

other successful organizations operate (l.Bayer, 2008). Benchmarking will

allow the organization to evaluate the practices that they are doing in light

of observing and understanding other organizations practices and compare

it to theirs, thus making them to change their practices in order to have

better performance or better effectiveness and efficiency with the new

change.

Benchmarking will also allow the organization to observe the

changing needs of their organization as time pass, making them to be able to

predict the workforce change (demand and supply) that they will face.

Benchmarking will allow them to figure out what they are supposed to do

and what they can do to make it better. However it is noted that in recent

times, benchmarking is harder to be done, as other successful organization

does not want to share their knowledge as I will hamper on their ability as

well as their edge in competitive advantage in the market. (Kavanagh, 2012)

v) Mathematical

Mathematical based methods for forecasting human resource needs

include various statistical and modelling methods (l.Bayer, 2008). It can be

seen that statistical methods use historical data in some manner to project

future demands in the organization while modelling methods usually

provide the framework for the organization’s workforce data and its

combination to have some prediction for the organization. For instance one

of method is using the Markov chain Model to predict internal labour

workforce supply. (OCZKI, 2014).

The Markov analysis is a method for tracking the pattern of

employee movements through various jobs (Snell, 2010). Above is an

example of a how Markov analysis can be used in an organization (Retrieved

from Scott Snell’s (2010),Principles of Human Resource Management)

In this analysis (Markov), it will show he percentage of employees who

remain in each of a firm’s jobs from one year to the next, as well as

including other elements such as promotions, demotions etc. while the

trend analysis is quantitative method used to project HR demands (Snell,

2010). Below is an example of how trend analysis can be used in predicting

demand for workforce in an organization.

Retrieved from Scott Snell’s (2010),Principles of Human Resource Management

Supply and Demand Techniques used in Organization

Massachusetts Institute of Technology (MIT)

An organization that has the ability to predict their workforce is an organization that is both

aware and know the use of having a prediction of their supply and demand of workforce. Therefore

within this paper one organization that practices( techniques) one of the way they predict their

internal labour capabilities in terms of supply and demand is Massachusetts Institute of Technology

or famously known as MIT.

MIT, is an organization that bases their operation within the education area. Where they are

one of the leading and top universities in the United States in America (MIT, 2014). Within MIT’s

Human resource department, it can be seen that they are using multiple form of workforce data, in

which they believe that through having these workforce data they can help to optimize the process

of workforce planning by providing vital information for the organization’s development. In which

MIT uses Trend analysis for the staff that are working with them. MIT believes that through having a

trend analysis for their workforce it would help them to consider internal and external hiring

patterns for filling open positions, whereby according to MIT, it could also be used to have an

understanding of the current status quo for the staffs in the organization (MIT, 2014).

MIT is a good example of how an organization uses a technique to be applied in their

organization, whereby they are able to predict the staffs supply from within the organization as well

as projecting the number of needed staff in the future. This would help MIT’s Human resource

department to have the ability to forecast good date for the use of the organization. Thus allowing

them to make good decision making for the wellbeing of the organization.

Conclusions

Although the ways of predicting within HR are split in two, where judgement and

mathematical based predictions exist, both camps are widely used throughout the world. An

organization that has the ability to predict their workforce is an organization that is both aware and

know the use of having a prediction of their supply and demand of workforce. Within any current

organization, having the ability to produce data on the prediction of the supply and demand of their

workforce is crucial. This is because it would be an internal defence and alert system for the

organizational human capital or talent pool, whereby the ability to predict them would allow the

organization to look into new talents or to very much reducing them if it is necessary. This could also

be seen in terms of having a good competitive advantage over other organizations, in which the

better of organizations that have better supply and demand techniques will be able to have good set

of data so that they are able to make good decision making in the future.

Therefore having a good sense of awareness as well as knowledge on the knowhow of doing

predictions for the supply and demand of workforce within an organization is one of the key to have

an effective decision making as well as making a successful organization.

References

Goodman, S. (2007). Management for tomorrows leaders. Mason: South Western.

Hsu, C.-C. (2007). The Delphi Technique: . Practical Assessment, research and evaluation.

Kavanagh, M. J. (2012). Human Rsoource Information systems. Washington: SAGE.

Kesti, M. (2011). Human capital scenario analysis as an organizational intelligence . Problems and Perspectives in Management.

l.Bayer, L. (2008). Human Resource Management. New York: McGraw Hill.

Lunenburg, F. C. (2012). Human Resource Planning. INTERNATIONAL JOURNAL OF MANAGEMENT, BUSINESS, AND ADMINISTRATION.

MIT, M. I. (2014, 11 30). Strategic Planning of Talent. Retrieved from Workforce Analysis: http://hrweb.mit.edu/ctm/organizational-strategies/talent-management-workforce-planning/workforce-analysis

OCZKI, J. (2014). Forecasting Internal Labour Supply with a Use of Markov . International Journal of Knowledge, Innovation and Entrepreneurship, 39-49.

Snell, S. (2010). Principles of Human resource Management. South Western.

HUMAN CAPITAL PLANNING AND DEVELOPMENT

(BH6043)

INDIVIDUAL WORK ON

SUPPLY AND DEMAND TECHNIQUES

AZWAN AHZRAN BIN PERMAN

MB1412038T