Introduction to workforce planning and forecasting demand for labour

Workforce planning sits at the heart of 5HR02, and this video introduces the subject by framing it as a strategic organisational process rather than a routine administrative function. The video addresses Assessment Criterion 2.1 by establishing what effective workforce planning involves — analysing the current workforce, anticipating future requirements, and developing responses to the gaps between the two. The familiar shorthand of "right people, right skills, right place, right time, right cost" anchors the discussion, and the video examines the consequences organisations face when planning breaks down, including reactive recruitment, inflated costs for scarce skills, and an inability to deliver on strategic objectives.

A substantial portion of the video is devoted to forecasting demand for labour, which the video treats as distinct from simple headcount projection. The coverage extends to skills, competencies, experience levels and timing. Two broad categories of forecasting method are examined: quantitative approaches, including trend analysis, ratio analysis and econometric modelling, and qualitative approaches, including the Delphi technique and scenario planning. The video explains what each category draws on and why organisations benefit from combining them rather than relying on a single method.

The video also maps out the internal and external factors that must be considered when forecasting labour demand. On the internal side, this includes business strategy, growth plans, restructuring, technology investment, and changes to products or services — with particular attention to how productivity shifts can simultaneously reduce demand for certain roles and create demand for entirely new ones. External factors covered include market conditions, economic trends, regulatory change, technological developments, and demographic shifts. Together, these threads connect demand forecasting directly to the broader strategic context that AC 2.1 requires learners to analyse.