Human resources

Table of Contents

1. Topic pack - introduction
2. 2.1 Human Resource Planning - Notes
   1. Human resource planning
   2. Supply of human resources
   3. Workforce Planning
   4. Recruitment and selection
   5. Appraisal
   6. Training and development
   7. Internal and external training
   8. Benefits of good training
   9. Dismissal and redundancy/lay-off
   10. Legal employment rights
   11. Legislation on employment rights
   12. Achieving workforce planning targets
   13. Changing employment patterns and practices
   14. Analysing changes
   15. Handy's Shamrock
3. 2.1 Human resource planning - questions
4. 2.2 Organisational structure - notes
5. 2.2 Organisational structure - questions
6. 2.3 Communication - notes
7. 2.3 Communication - questions
8. 2.4 Leadership and management - notes
9. 2.4 Leadership and management - questions
10. 2.5 Motivation - notes
11. 2.5 Motivation - questions
12. 2.5 Motivation - simulations and activities
13. 2.6 Organisational and corporate cultures - notes (HL only)
14. 2.6 Organisational and corporate cultures - questions
15. 2.7 Employer and employee relations - notes (HL only)
16. 2.7 Employer and employee relations - questions
17. 2.8 Crisis management and contingency planning - notes
18. 2.8 Crisis management and contingency planning - questions
19. Printable version

Supply of human resources

The supply of labour varies between countries and regions within countries and is affected by demographic change.

The process of workforce planning will be constrained by the availability of labour. The supply of labour dictates the future availability of workers. So what determines the supply of labour? We can split these into national determinants and local determinants.

National determinants

Economists define the supply of labour as a stock, which increase or decreases according to a number of factors:

• The birth rate: the ratio of live births in an area to the population of that area; expressed per 1000 population per year
• The death rate: the ratio of deaths in an area to the population of that area; expressed per 1000 per year

Note: The ratio of birth rate to death rate (the net birth rate) affects the supply of labour because those countries with a high net birth rate, such as many developing and emerging economies, will in the long run have a larger supply of labour.

India, for instance, has witnessed a five-fold increase in population over the last 100 years and is expected to surpass China's population by 2050.

• World population clock
• China population clock
• India population clock

• Net immigration rate: the difference between the number of persons entering and leaving a country during the year per 1,000 persons. An excess of persons entering a country is referred to as net immigration; an excess of persons leaving the country as net emigration. The more mobile labour is internationally, the greater the potential supply of labour. This is an increasingly important factor given the reduction in barriers in areas like the European Union, where there is complete freedom of movement for people and goods.
• The retirement age: retirement is the point where a person stops employment completely. Retirement may be a legal requirement at a certain age. However this varies from country to country although it is generally between 55 and 70. In some countries this age is different for males and females and varies between professions. For example in France, the retirement age for teachers in France is thirty eight years after employment began, but it is at the age of 50 for train engineers on the national railway. It is also possible for employees to take early retirement. If the retirement age is raised this will increase the supply of labour.
• At the moment there are four working-age people for every person over 65 in the 27-nation EU. That ratio will drop to two for every person over 65 by 2060. The EU is presently urging governments to increase the age of retirement across the community.
• Education participation: developing economies have imposed minimum school leaving ages; typically 16, and have seen increasing participation rates in higher and continuing education. As more people are accepted into university, the lower the supply of labour.

The supply of labour is affected by additional factors such as the ratio of part-time to full-time employees, the willingness of women to enter, or re-enter,the workforce after having children and the occupational and geographical mobility of labour (the ability, or willingness, of individuals to move between different jobs and regions).

Local determinants

The supply of labour for an individual firm will be affected by the factors affecting a country or region, but will also be influenced by competition between firms in the area and the costs of living in that area.

• Labour mobility: Are employees prepared to move into and out of the area? This may be influenced by the attractiveness of the region in terms of location, climate, infrastructure, communications and beauty. The higher the level of mobility, the greater the potential supply of labour.
• Local income levels: Higher income levels will attract people to an area and may lead to a greater supply of labour. However, firms in high cost regions may find it difficult to attract employees, especially for poorly paid jobs.