Forecasting supply of labour and identifying workforce gaps

Forecasting supply of labour sits at the heart of AC 2.1 in 5HR02, and this video focuses specifically on how organisations analyse both internal and external sources of talent and then compare that supply against anticipated demand. The internal side draws on skills audits, workforce inventories and the use of HR information systems to map current employee capabilities, qualifications, performance levels and career aspirations. The video also addresses how workforce dynamics — including turnover, retirements, promotions and internal transfers — shape predictions about how the existing workforce will evolve over time, and how succession planning connects directly to reducing reliance on external recruitment for critical roles.

External labour supply forecasting forms the second major strand, covering labour market analysis that takes in unemployment rates, wage levels, skill availability, demographic trends, education and training provision, competitor activity and geographic factors. The video examines how employer brand influences both retention of existing staff and attraction of external candidates, and it considers the tension between developing talent internally and bringing in new perspectives from outside. These two dimensions of supply — internal and external — are treated as interdependent rather than separate, with the relationship between them shaping the overall workforce planning picture.

The final section turns to gap analysis, which the video addresses at multiple levels: organisation-wide, by function, by location and by job family. It distinguishes between skills gaps, headcount gaps, competency gaps and experience gaps, noting that competency gaps — covering behavioural capabilities such as leadership and innovation — are frequently the hardest to assess and resolve. The video then examines how to analyse the strategic significance, urgency and cost implications of each gap type, including the cost of leaving a gap unaddressed relative to the cost of available solutions, and how certain gaps can carry existential consequences for an organisation's ability to operate.