The general human resource management involves manpower planning, which when focused on well, may result to improvement in the organizational performance. Therefore, concerning labor market, the human resource manager has to focus on both internal and external labor market. A manager who relies on internal labor market tends to depend on judgment and intuition unlike the external labor market, which relies on rigorous statistical analysis. Furthermore, the forecasting techniques applied by the human resource manager can aid in generating flexible responses (Cascio & Aguinis, 2012).
Moreover, internal labor market addresses the situation in which workers are hired into entry level jobs whereas higher levels are filled from within the organization. Consequently, the wages are determined from within and might be free from the pressure existing in the market. However, external labor market depicts that workers move fluidly between organization and wages through a certain cumulative process in which a company has no willpower over wage settings (Cascio & Aguinis, 2012).
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Forecasting of the internal labor market entails the identification of human resource through consideration of various factors such as gender, age, length of service and age, determination of internal management issues like retention, promotion and separation. Another component involved in internal labor market forecasting process is identification of the potential areas of the workplace, which are susceptible to current or future skill gap imbalances and viewing the geographical issues, which might be the causes of issues determined. All these components have impact on the recruitment as well as retention of workplace throughout the organization. On the other hand, the key elements involved in the process of forecasting the external labor market entails the demographic alteration in organization’s possible workforce, distressing both the call for services and staff supply to occupy the gap (Cascio & Aguinis, 2012).
Reference
Cascio, W. & Aguinis, H. (2012). Staffing Twenty First Century Organizations, Journal of
Human Resource Management , 2(1), 133-165.
