When an organisation needs to determine the supply of labour obtainable, they must evaluate how many people are available to work, the duration they can work for, their capability to do the necessary jobs, their efficiency, etc.
There is internal supply, contained by the organisation, and external supply, which comes from the labour market.
Internal supply
To work out the internal supply, certain information must be evaluated, like:
The number of employees in specific job areas
The possibility of employees gaining promotion
Age range
Length of service
Skills available, to determine if they are transferable to other areas of work
The level of performance, which may be obtained from productivity levels, or appraisal interviews
Staff turnover
To work out the amount of staff leaving or staying in an organisation, it is important to look at the employee wastage rate and the labour stability rate.
Wastage rate =
Number of staff leaving in a time period
X 100
Average number of staff employed in time period
This information shows whether or not it is necessary to recruit new staff, to substitute the ones leaving.
Labour stability rate =
Number of staff leaving,
with more than 1 years service
X 100
Number employed a year ago
This shows how likely it is for employees with long service to stay within the organisation.
The external labour market, also affects the supply of labour to organisations, and this can be nationally or locally. This involves trends in age distribution, labour competition, government policies, economic activity, training and education.
Many organisations will be affected by changes in age distribution within the UK, and this will influence human resource planning. In the UK there are more older people than younger people, so organisations will perhaps have to consider recruiting older people.
People with specialist skills will be in more demand, so therefore there will be competition of labour. This means that organisations will have to provide more to appeal to potential employees, in order to compete with other organisations.
Due to Birmingham City Council being such a large organisation, with a payroll budget of over £500 million, it is important that processes are planned efficiently within the human resource. The human resources planning process of Birmingham City Council cannot be classified as a whole, as it is up to the initiative of individual managers. Generally, there is not an overall requirement for human resources planning; it just relies on staying within the salary budget. In a lot of cases managers do not have to make plans on employing staff, they usually wait until the vacancy arises.
Birmingham City Council plans to avoid the need for redundancy and handle changes in organisational workload by:
Recruitment control
Using agency and temporary staff
Redistributing duties
Reducing overtime working
Using voluntary redundancy
Redeployment
To cut down on the amount of money they are spending, Birmingham City Council are trying to control recruitment by employing internally, by redistributing employees throughout the departments. The problem they have to overcome is convincing individual managers of different departments to accept that these employees are capable of completing duties, even it means providing them with some sort of training.