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Balancing supply and demand

Most countries, including Australia, are faced with issues in managing, retaining and building a skilled health workforce.
A team of doctors, two females and two males.
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Most countries, including Australia, are faced with issues in attracting, retaining and building a skilled health workforce. Some countries are also confronted by demographic challenges such as an ageing population and workforce.

Not only do health services need doctors, nurses and allied health clinicians, but cleaners, cooks and administration staff. If our health systems are going to adapt to address growing health needs, health systems and workforce will need to implement innovative models to continue to deliver responsive health systems. Ageing is an issue not just for the general population but also within the health workforce. In Australia in 2015, for example the average age of nurses was 44.4 years and one in four medical practitioners were aged greater than 55. (Australian Institute of Health and Welfare, 2015).

Rural and remote towns and cities can be difficult locations for clinicians to work and live in. In geographically vast countries, such as Australia, India, Canada and Africa, access to health professionals is an ongoing dilemma.

Strategic human resource management

Strategic human resource management is an approach where an organisation aligns workforce planning to the organisation’s overall strategy and objectives (Nankervis et al, 2013). Workforce planning involves forecasting the human resource needs for an organisation and then planning the steps to ensure that supply matches the demand in the future. It involves analysing the current workforce, and then extending that analysis to identify the future skills and competencies needed to deliver the required health services.

Workforce planning is one way that health service managers ensure that skilled workers are employed within our health care systems. It is not only important to have the right number of nurses, doctors, pharmacists, physiotherapists, dieticians, pathologists, but also the correct mix of skills. On the other hand an oversupply of health workers has negative consequences with wasted training costs and potential for over-servicing.

So how do we tell if we have the right balance of health workers? The starting point to workforce planning is to understand the services necessary for a healthy population. This will also depend upon the funding that is available and the health priorities.

Health system indicators

When deciding the types of health priorities and services needed, the following health system indicators can be used as a starting point.

  • life expectancy
  • causes of morbidity and mortality
  • infant and maternal mortality rates
  • gross domestic product
  • health expenditure
  • number of nurses, midwives, doctors and allied health professionals
  • primary health centres
  • aged care facilities
  • rates of immunisations
  • deaths from infectious diseases
  • hospitals and hospital beds

So how can health service managers plan for the workforce of the future and what are the principles for success?

Understanding supply and demand

The three key steps to understanding supply and demand are:

  1. Demand forecasting – Estimating the quality/quantity of employees required to meet organizational objectives
  2. Supply forecasting- Determining how many employees the health care organisation will require to meet the demand. Indicators to assist with supply forecasting are understanding internal labour supply, the available skills within the organisation, external labour supply such as unemployed, new graduates, students, individuals returning to work
  3. Filling the gap between demand and supply

It is important to remember that there is no single model for workforce planning. There are many different approaches. We will look at some specific strategies later in the course.

Your task

Do you think all the information needed for forecasting demand and supply would be readily available from health care organisations? Where could you find this information and who could you ask?


Crettenden et al. (2014). How evidence-based workforce planning in Australia is informing policy development in the retention and distribution of the health workforce. Human resources for health 12(1)

Follow-up on commitments at the Third Global Forum on Human Resources for Health: Indonesia, Sudan, Tanzania. Retrieved from:

Global Health Workforce Labor Market Projections for 2030. Retrieved from:

Nankervis, Alan; Baird, Marian; Compton, Robert; Coffey, Jane (2013). Human Resource Management Strategy and Practice. Melbourne, Cengage Australia.

Phillips, T., Evans, J. L., Tooley, S., & Shirey, M. R. (2018). Nurse manager succession planning: A cost-benefit analysis. Journal of Nursing Management, 26(2), 238-243. doi:10.1111/jonm.12512

Willis, G., Cave, S., & Kunc, M. (2018). Strategic workforce planning in healthcare: A multi-methodology approach, European Journal of Operational Research, 267(1), 250-263. doi:10.1016/j.ejor.2017.11.008

© Griffith University
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