Forecasting Labor Supply and Demand

This activity is important because trends and events that impact the economy also create opportunities and challenges forecasting the optimal number of human resources in an organization at any given time. The keys to utilizing labor markets for the organization's own competitive advantages are (1) to have a clear idea of the strengths and weaknesses of its existing internal labor force, (2) to be aware of where the company is going in the future and how the current configuration of human resources relates to what it will need in the future, and (3) to know where discrepancies exist between current staffing levels and those needed in the future to meet organizational goals.

The first step in the human resource planning process is forecasting. Forecasting is an attempt to determine the supply and demand for various types of human resources to predict within the organization where there will be future labor shortages and surpluses. Historical statistical models and judgmental techniques are used for forecasting labor supply and demand. One type of statistical procedure that can be used for this purpose is the analysis of a transitional matrix, which is a chart that lists job categories held in one period and shows the proportion of employees in each of those same categories in a future period. The goal of this activity is to complete the transitional matrix to forecast labor supply and demand for several marketing positions within an organization.

Instructions: Match the prompt describing the proportion of marketing employees at different times to the appropriate transitional matrix label. Use the information below to inform your answers.

Transitional matrix labels:

1. Maintain Manager Position
2. Manager-Apprentice Demotion
3. Apprentice New Hire
4. Manager-Rep Demotion
5. Rep-Apprentice Demotion
6. Manager Turnover
7. Apprentice Turnover
8. Apprentice-Rep Promotion
9. Rep New Hire
10. Maintain Rep Position
11. Rep Turnover
12. Rep-Manager Promotion
13. Manager New Hire
14. Maintain Apprentice Position
15. Apprentice-Manager Promotion

Employee movement (i.e. the proportion of marketing employees at different times)

• 65 percent of sales managers in 2017 were still sales managers in 2020.
• 20 percent of sales reps in 2017 were promoted to sales managers in 2020.
• 10 percent of sales apprentices in 2017 were promoted to sales managers in 2020.
• 5 percent of sales managers in 2020 were not with the organization in 2017.
• None of the sales managers in 2017 were demoted to sales reps in 2020.
• 60 percent of sales reps in 2017 were still sales reps in 2020.
• 30 percent of sales apprentices in 2017 were promoted to sales reps in 2020.
• 10 percent of sales reps in 2020 were not with the organization in 2017.
• None of the sales managers in 2017 were demoted to a sales apprentice in 2020.
• None of the sales reps in 2017 were demoted to sales apprentices in 2020.
• 15 percent of sales apprentices in 2017 were still sales apprentices in 2020.
• 85 percent of sales apprentices in 2020 were not with the organization in 2017.
• 35 percent of sales managers in 2017 were no longer with the organization in 2020.
• 20 percent of sales reps in 2017 were no longer with the organization in 2020.
• 45 percent of sales apprentices in 2017 were no longer with the organization in 2020.