Smarter workforce forecasting 101

Accurately predicting the resources you’ll require in the year ahead will help you remain competitive and take advantage of emerging opportunities, writes Brendan Maree.

Is your leadership team preparing to shift into planning mode, as the end of the 2024 calendar year fast approaches? If you answered in the affirmative, join the club.

Now’s the time when goals are set, strategies are formulated to reach them, and budgets are prepared for divisions and departments. Most leadership teams take a data-driven approach to this last process, utilising historic reports and forecasting methodologies to arrive at a set of figures that will enable them to operate effectively.

Going with your gut on workforce planning

But, in many instances, that level of scientific rigour is less in evidence when it comes to determining the size and composition of the workforce needed to execute upcoming plans and projects.

Forty per cent of businesses own to having no more than a rudimentary understanding of, and capability for, workforce forecasting, according to a recent World Economic Forum survey.

In such organisations, workforce planning is generally based on gut feel rather than an objective and systematic analysis of where and when staff are likely to be required.

And that approach is likely to be costing those organisations dear.

Instinct is expensive

That’s because the “instinctual” approach to workforce management has some significant drawbacks. Chief among them is reduced efficiency, courtesy of the fact that market demands and capacity may not be aligned.

Stretching workers too thin, too often, is a recipe for fatigue, disgruntlement and, ultimately, employee turnover. So is over-staffing. While a proportion of workers may enjoy the opportunity to take things easy, just as many prefer being challenged and busy. Left to twiddle their thumbs, they’ll soon enough start using that spare time to scan the Situations Vacant listings for roles that won’t leave them feeling bored and unhappy.

Meanwhile, not having the right people with the right skills on board can make it impossible for businesses to take advantage of emerging opportunities to grow their customer base and revenue. By the time they’ve clocked those opportunities and staffed up to tackle them, a competitor has likely swooped in and eaten their lunch.

Doing better with data

Conversely, rigorous, data-driven workforce planning has a host of benefits. It enables businesses to optimise both efficiency and staff costs by aligning workers with demand.

Recruitment can be planned and budgeted more effectively, and HR teams can make better decisions around training, career paths and promotion opportunities for existing employees. That’s a recipe for a happier, more engaged team and a lower employee churn rate.

And, perhaps most importantly, it makes keeping up with changing market needs easier – a critical consideration for businesses at a time when economic conditions are tough and competition has never been tougher.

Tools to make the task easy

While the benefits of proactive workforce planning are difficult to dispute, it can be challenging to realise them without the right tools. We’re talking operations and enablement technology, which allows you to analyse your business’s workforce requirements in unprecedented detail.

Implementing an operations enablement and workforce platform makes it easy to examine every aspect of your operations in real time, including its staffing requirements, on a daily, weekly, monthly, and annual basis.

You’ll be able to conduct in-depth data analysis, chart your activity levels and extract actionable insights to help you hire and utilise the human capital you need to succeed.

Advanced modelling capabilities will allow you to map your workforce requirements in a range of scenarios and explore the financial and operational implications of scaling your team up and down.

Making 2025 your year for working smarter

Irrespective of the nature of your business, a strong workforce is likely to be your greatest asset. Having the right people on your team, at the right times and in the right places, will ensure you have the capacity to service your customers and make the most of opportunities to diversify and grow in the new year.

By replacing guesswork with sophisticated data analytics, the right workforce platform can de-risk the workforce planning process and help you align talent with demand. If optimising your operations is a priority for your organisation in 2025, it’s foundation technology that should sit at the heart of your ICT stack.

Brendan Maree is the vice president and country manager for Australia and New Zealand at ProHance.