Companies can utilize strategic human resource planning to predict current and future staffing needs using different techniques, but the ultimate goal is to limit exposure to surpluses or shortages of high skilled individuals in the workforce. Managers need to actively anticipate the continuous movement of people into, within and out of an organization. They also need to implement activities and processes that promote employee competencies within the specific framework provided by demand and supply estimates. It is extremely important to get the right balance between labor demand and supply, so as to ensure the availability of the right employees with the right skill at the right time.
When forecasting labor demands, there tend to be two approaches, Qualitative and quantitative. The quantitative approach often times uses a variety of statistical and mathematical approaches to determine the needs, including indexation (forecasts determined in relation to one or more fixed organisational indices) or trend analysis (forecasts based on the study of past human resource growth). These are often times complex and expensive, but a real need, especially for larger organizations.
Usually, Small and medium sized businesses prefer to rely on qualitative approaches to determine labor demand. These approaches tend to use experts within the range of business to determine future need, that is, the employees, managers and business owners themselves. Popular approaches include the Delphi Technique which uses problem solving and expert consultation methods in a structured manner and managerial judgment i.e. business owners and managers assess their own labor requirements taking into account factors such as retirements, promotions, new technologies and the Nominal Group Technique, using group processes to compare predictions on the staffing needs for the future.
Majorly, the advantages of using qualitative methods, especially with SMEs are that the techniques used involve the people that are likely to be affected by any changes to the business in relation to human resources practices. Therefore, there would likely be greater commitment and acceptance of policies and practices by those involved. One of the downsides however is the time and cost of involving employees, business owners, and managers in the processes. Having a HR Consultant present at hand, able to lead the process and adopt the most appropriate processes to lead businesses through these processes, can help to achieve effective forecasting of future employee needs.
Finally, workforce planning is imperative to businesses wanting to plan their growth and limit situations where they are faced with too few or too many employees or the wrong skill sets. Workforce planning can actually help business owners see how their employees are operating by forecasting numbers of staff with specific skill and also help them achieve their strategic business objectives.
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