AC 2.1 Analysis of the impact of workforce planning in terms of forecasting demand for labour utilising both internal and external sources of supply.

Arguably, employee recruitment costs thousands. If a staff turns out to be the wrong fit, it costs the organisation even more. That is why it is vital to adopt effective frameworks to mitigate time and resource wastage (Kingdom.co.uk). Human resource supply forecasting is one of the most critical strategies for minimising such wastage. Human resource forecasting can be defined as the process of estimating available human resources followed by demand forecasting. Effective human resource forecasting entails an in-depth understanding of both the internal and external supply of human resources. Internal supply of human resources refers to labour that is available through employee transfers, promotions, organization’s former employees, and recall of the organisation’s former employees. On the other hand, the external supply of human resources refers to the availability of the labour force in a given market through new recruitment. Effective human resource managers understand which of the two frameworks to adopt while filling up job positions. Additionally, effective human resource managers understand factors impacting each of the above supply of human resources. For example, some of the key factors affecting the external supply of human resources include the literacy level of a nation, population rate, technological advancement, and compensation system.