1.The size of the total population.

This is obviously very important because the size of the total population sets in the upper limit to the supply of labour.

2.The age composition of the population.

The age composition of a population takes into account the proportions in the different age groups . Two countries may have the same total populations, but very different age compositions and hence very different numbers in the working age groups.

3.The working population.

In many countries the minimum age at which a person may engage in full-time employment is legally controlled. In the UK this is now 16 years and the normal age for retirement is 65 years (60 in case of women). The age range from 16 to 65 years (or 60) covers the working age groups, but this does not mean that the total working population embraces all the people in these age groups.

The working population may be defined as the number of people who are eligible for work and offer themselves for employment.

4. The working week and holidays.

The number of people who work (or available for work) is an important determinant of the supply of labour, but so is the average number of hours each person works. The supply of labour provided by 20 people working for 40 hours is the same as that provided by 40 people working for 20 hours. Other things being equal, the shorter the working week, the smaller the supply of labour.

The gradual reduction in the working week has been accompanied by an extension of the annual holiday period. Again this amounts to a reduction in the supply of labour.

It must not be assumed, however, that a fall in the supply of labour implies a reduction in the output of goods and services . In spite of the decline in the average number of hours worked by each person, output per worker has continued to rise because of improved technology.

5. Remuneration.

The relationship between quantity supplied and price is discussed in economic literature and it should be apparent that there will be a relationship between the amount of work offered and the price paid for this work. Generally speaking, when wage rates are relatively low , increases in wages will tend to lead to an increase in the supply of labour, but there comes a point when higher incomes make leisuremore attractive. When incomes are relatively high, therefore high wage rates may reduce the amount of labouroffered by the individual worker.

Supply and demand are factors in human resource planning, just as they are in more general business planning. Forecasting begins with estimates of demand, the numbers and kinds of workers that will be needed at various points. The next task is to estimate the supply of workers. In many cases, that supply is within the company already – perhaps just needing training to fill the future needs. If not, the human resource manager must figure out how difficult it will be to find people in the general work force who have the required skills.

Another problem planners must take into account is that today’s fluid business conditions may leave companies drastically overstaffed or understaffed without much warning. Many companies are turning to part-time and temporary workers, who are easily added when business picks up and easily let go when it slows down again. The number of temporary workers supplied by agencies doubled when economic growth was relatively uncertain. It is also less expensive to hire part-time and temporary workers, because the company doesn’t have to provide benefits. Some companies have begun to provide at least some benefits, however, in order to attract high-quality workers.

Wages and salaries are the most typical component of employee pay. Some employees also receive incentive payments (bonuses, commissions, profit sharing), which are cash payments tied to their performance or that of the company in order to encourage productivity and accountability.