Forecasting

Workforce planning means looking into the future and forecasting the number of staff and required skills your organization will need to achieve its objectives. This is referred to as workforce demand forecasting.

The workforce demand forecast should include two estimates.

1. Workload and related staffing requirements (Which roles are business critical?)
2. Competencies and skillsets.

Estimating workload is the heart of demand forecasting but all estimates are valuable. Future staffing needs can be challenging to predict. Start by asking yourself the questions below, and consider how you will seek accurate answers. You are aiming to answer the overall question: What is the most appropriate staffing level? The aim is to prepare your organization for the future while managing labor costs and minimizing risk.

• What type of work is required?
• What is the volume of tasks to complete and how many people are needed to perform them?
• How many staff are currently employed in each department? What do these roles entail?
• Are all staff needed, or are some roles becoming redundant due to changing technology or decreasing demand for a product?
• Is your organization growing?
• Have external factors such as the economy reduced business profitability?
• What is the future direction of your organization?
• How many staff are eligible for transfers, promotions, and retirement?
• How many open job vacancies do you have? How many new starters and in what roles?
• How many staff are on permanent vs casual contracts?
• What is the current expenditure from each department on staff salaries?
• What are the demographics of your current staff? (We will explore this further later this week)

In future steps, we will also discuss workforce turnover and the usefulness of this data.

Awareness of the wider environmental landscape

By reviewing internal data you can begin to gain an idea of what roles you demand for your workforce. Later this week we will also explore the skills gaps in your organization and how these contribute to what staffing you demand.

Alongside these demand estimates you also need to take into account broad environmental factors that may impact workforce numbers i.e. available supply. For example, in recent years there has been a significant gap in the number of skilled workers available to perform the jobs created. An increasing number of roles require advanced knowledge, education, and qualifications. Industries and companies are struggling to hire qualified, educated, and experienced workers for these specialized positions.

You may estimate you need more staff with a specific set of skills, but find that the available supply of such workers is small. In this case, you either need to adapt your plans or consider what incentives you can offer to recruit talent to your organization.

Below are some examples of other environmental factors you should remain aware of in your forecasting.

Technology

Changing technologies impact the way organizations operate, and the types of roles and skills required. The number of manual production staff can be reduced if automation technology is adopted on production lines for example. The required staff, in this case, are those with technical expertise or managing a help desk.

The economy

Changing factors in the economy, such as a recession or pandemic, lead businesses to close, downsize or restructure operations.

High unemployment in society places pressure on salary and conditions, as workers will be willing to sacrifice these for securing a job. If there is low unemployment, organizations need to meet the candidate’s salary expectations to secure the workers they need.

Migration

Migration can significantly alter the demographic of a country and the pool of available candidates for work. In week 2 we will discuss how organizations that adapt their practices to increase diversity and adopt practices of cultural competence can better compete in the labor market.

Over to you

Consider the questions below and share your ideas in the comments below.

• Can you think of any other examples of environmental factors that can impact workforce supply?
• Which of the questions listed above do you think will be most difficult to accurately answer?

In the next step you will explore tools and methods to forecast demand and supply.