The diagram above looks at the human resources planning process. The firm must deal with demand side issues of labour and the expected demand for labour from the firm. They must also deal with supply side issues. In other words are there enough staff, internally or externally to meet the expected demand of staff from the company? Let’s quickly look at supply side issues.
Internal Supply of Labour
The organisation needs to examine if they have enough staff to meet the demand of labour. Is training available within the firm to meet future labour needs? What percentage of workers are about to retire and are they going to be replaced? Do terms and conditions of services currently keep staff motivated?
When examining internal labour needs, these issues need to be taken into account.
External Supply of Labour
If the supply of labour is not available internally, then the firm may need to recruit new staff. Are the staff then available within the local market? Do they have the required skill? If they are not available within the local market, how do we find them? Advertise in the next town? Or even overseas?
Human resources planning is an important part of running a business. If a business wishes to expand and do well, it must take into account current and future needs of its labour workforce.