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Choose an industry and explain why it is important for them to forecast external/internal supply of human resources?

In the contemporary world of competition, companies thrive for best to perform better than their competitors. The impact of human resource management practices on organizational performance has been a widely researched area for years. Results of studies, from developed countries to developing countries, have been time and again showing that HR practices have significant impact on organizational performance (Delaney & Huselid, 1996; Katou & Budhwar, 2007; Sing, 2004; Tzafrir, 2006). Therefore, there is a critical need to get the best people in the right place at the right time. Matching human resources with planned organizational activities for the present and the future is one of the main problems faced by an organization. So, forecasting helps to match the requirements and the availabilities of employees. Therefore, management must forecast the demand and supply of human resources as part of the organizations business and functional planning processes. Long-term business requirements, promotion policies, and recruitment (supply) possibilities have to be matched so that human resources requirements and availability estimates (from both internal and external sources) correspond sufficiently (Alpander, 1982:78-79). This paper examines importance of forecasting analysis on internal supply and external supply of human resources in Pharmaceutical Industry in Bangladesh. The pharmaceutical industry in Bangladesh is one of the most developed hi-tech sectors within the country's economy. Due to recent development of this sector, the industry is exporting medicines to global markets, including the European market. This sector is also providing 97% of the total medicine requirement of the local market. Some of the companies produce insulin, hormones, and anticancer drugs, which were not previously produced in Bangladesh. Leading pharmaceutical companies are expanding their business with the aim to expand into the export market. Establishing long-term human resources requirements is closely related to strategic business plans. Strategic business plans should provide a minimum base of information on which viable human resources plans can be built. On the other hand, management should consider labor availability when they establish strategic business plan because current and potentially available human resources affect the viability of strategic business plans (Alpander, 1982:79). At the beginning, management needs to estimate future labor availabilities and needs, that is, to assess

Academic Essay

the supply of labor, both within and outside of the organization. Also, they need to determine the future demand for specific numbers and types of employees. Implicit here is that supply and demand analyses should be conducted separately (Walker, 1980). The main reason for this is that internal supply forecasts tend to rely heavily on organization-specific variables, such as turnover and retirement rates, transfers, and promotions retired employees & recall of laid-off employees, etc. Forecasting supply involves determining availability of labor force in the market and new recruitment. Factors managers typically consider when forecasting the supply of personnel include promoting employees from within the organization; identifying employees willing and able to be trained; availability of required talent in local, regional, and national labor markets; competition for talent within the field; population trends and college and university enrollment trends in the needed field (Ball, 2012; Henderson, 2010). Forecasting supply of human resource provide an industry with of benefits from several ways. It helps both from internal and external perspective. The potential benefits of internal supply include greater stability and predictability of a firm's stock of skills and capabilities, better coordination and control, enhanced socialization and lower transaction costs ( Pfeffer & Baron, 1988,Jones & Hill, 1988; Williamson, 1981,Edwards, 1979, Mahoney, 1992; Williamson, 1975). On the other hand external supply enable firms to decrease overhead and administrative costs, balance workforce requirements, and enhance organizational flexibility (Davis-Blake & Uzzi, 1993; von Hippel, Mangum, Greenberger, Heneman, & Skoglind, 1997; Welch & Nayak, 1992, Pfeffer, 1994, Miles & Snow, 1992; Snow et al., 1992). An important consideration for forecasting supply of human resource is to reduce the cost related to manpower. Forecasting supply of human resource has several importance that has gain strategic standpoint specifically, human capital theorists suggest that since firm-specific skills are nontransferable, the value of any employee's human capital will be less with any other firm, and internal supply will be less likely to result in a capital loss (Becker, 1976). Moreover, it can help to ensure the delivery of quality services, and can save money by cutting costs associated with high vacancies and turnover. Costly redundancies can be minimized if redeployment processes are taken into account during workforce planning. Careful consideration of the age profile of an organization can ensure that skills gaps will not have to be met through costly interim measures, such as high numbers of agency staff and overtime payments.
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Another important purpose of forecasting supply of human resource is to identify skilled talent to fill job vacancies. It determines human resource needs, assesses the available HR inventory level to perform the job. In formulating industries strategic objective it necessary to identify best talent form sources. So, it is important to identify ability of skilled talent in local, regional and national labor market (kreitner, 1995). HR supply forecasting base on ability of talent helps to identify the right strategy for the organization. Acquiring the right candidate is beneficial to meet future surplus or shortage. However, scholars as Quinn (1992) and Venkatesan (1992) claim that firms should base employment forecasting decisions based on the core capabilities of the firm. Firms need to identify the talent from the best source available in order to meet the future talent shortage or surplus. In these regard (Stewart, 1997) mentioned that all employee does not possess the skills and capability that is valuable to particular firm. So the need for selecting best talent can be beneficial for achieving competitive advantage. To estimate future supply of labor needed to perform a specific job it is necessary to forecast supply of human resource. Human resource supply forecasting ensures that people are available to provide the continued smooth operation of an organization. It means, human resource supply forecasting is regarded as a tool to assure the future availability of manpower to carry on the organizational activities. It determines the future needs of manpower in terms of number and kind. Forecasting the supply of human resource helps to increases organizational flexibility. There are other several environment factors like economic uncertainty, technological change; demographic changes and shifts in values often pose substantial pressure to bring flexibility in the organization (Sheehan, 2006). The promise of these forms of flexibility to help organizations respond more easily to environmental fluctuations and match labor resources more closely with variations in supply and demand have led to major shifts in the workforce profile. Despite the benefits in terms of flexibility that are offered by alternative forms of work, the arrangements create numerous challenges for both employees and organizations. Moreover, (Ghosh et al. 2009) research indicates that non-standard forms of work are associated with a greater financial impact when firms are operating in less uncertain but more competitive environments. High level of task flexibility, knowledge and expertise are specific to help an organization to sustain itself at a time when conditions are unpredictable. So it is important to consider the impact of forecasting supply that provides flexibility.

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Academic Essay

Our purpose in this academic essay was to identify the importance of supply of human resource for Pharmaceutical Industry in Bangladesh. Focusing on the forecasting supply of HR help to understand why it is important to estimate the available of human resource. Forecasting has an important role in successful human resource management of a company. By predicting the number of employees to be hired and also by estimating and knowing their quality, a company would get the best people for the right places and at the right time. This is necessary if a company wants to compete. Moreover, forecasting supply of HR may help both academics and practitioners understand which forms of forecasting have the potential to be a source of competitive advantage today and in the future, as well as those that do not. If that potential is identified, developed, and deployed strategically, firms may well be able to gain a competitive advantage. So to avoid the situations of surplus or deficiency of manpower in future, it is important to plan your manpower in advance. For this purpose a proper forecasting of futures business needs helps you to ascertain our future manpower needs. From this angle, forecasting supply plays an important role to predict the right size of manpower in the organization. (Words Count: 1428)

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Academic Essay

References
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