Labor Demand

Topics: Employment, Ratio, Future Pages: 1 (303 words) Published: October 1, 2011
"Labor demand is a derived demand, meaning it is a result of consumer demands for the organization's products and services. The organization acquires and deploys its workforce in ways that will allow it to be responsive to consumer demand in a competitive manner." 

Above is a quote from your textbook Chapter Three.  Given that this statement is true, what will the organization have to do in order to forecast its future labor demand?  What is one technique that could be used to accomplish this? 

Put your answer in a journal entry - NOT in an attached Word Document.  Since I am getting this active a day late, you have until September 20th at 11:59 pm to complete the assignments in this Module.

  The company will need to combine current staffing levels with anticipated staffing gains and losses and compare to an estimate of the supply of labor for the target position at a certain point in the future. Anticipated gains and losses are based on historical data combined with managerial estimates of future changes. There are many techniques a company can use I am going to talk about Ratio Analysis. Ratio Analysis, which assumes that there is a relatively fixed ratio between the number of employees needed and sales forecast. Using historical patterns within the firm helps to establish a reasonable range for these ratios. This process can be used for either justifying new positions or demonstrating the need for layoffs. However, it is not very effective for changes in technology or skill sets. You will need consistent historical trends to calculate ratios. Possible Ratios: Production to employees, Revenue per employee, Managers to employees, Inventory levels to employees, Number of customers or customer orders to employees, Labor costs to all production costs, The percent utilization of production capacity to employees.
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