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 organizations 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 organizations 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
environmental

analysis
scanning

involves
data

to

using

workforce

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
organizations 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 organizations 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

Snells

(2010),Principles of Human Resource Management)

In this analysis (Markov), it will show he percentage of
employees who remain in each of a firms 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 Snells (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 MITs 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 organizations
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 MITs 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/talentmanagement-workforce-planning/workforce-analysis
OCZKI, J. (2014). Forecasting Internal Labour Supply with a Use of Markov .
International Journal of Knowledge, Innovation and Entrepreneurship, 3949.
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