Workforce Forecasting: A Helpful Guide for Managers

Your business is anything but static, and managing employees when your company is changing and growing can be tricky. The best way to ensure you have the right people scheduled at any given time is with a workforce forecasting plan.

In this article, we’ll tell you what workforce forecasting is and how it benefits your company. Then we’ll walk you through how to implement your own workforce forecasting plan.

What is workforce forecasting?
The benefits of workforce forecasting
Essential elements of workforce forecasting
Workforce forecasting techniques
Steps to workforce forecasting implementation

What is workforce forecasting?

Staffing the right people in the right jobs is key to a successful business. You might be managing the schedule without trouble now, but as you set a strategic plan to grow your business, your resourcing needs are bound to change.

Workforce forecasting is simply a tool to help businesses assess and align their employees with the company’s strategic goals. You’re basically looking down the pipeline and determining the right number and type of employees needed to do the job.

As a manager, workforce forecasting is not just a nice to have; it’s a strategic imperative. You don’t want to pay too much and waste your budget when there is no need, but you can’t be left without an essential resource or crucial skill.

With workforce forecasting, you can proactively anticipate staffing needs to avoid these pitfalls as much as possible.

The benefits of workforce forecasting

It’s no surprise that when you plan for the skills and resources you’re going to need in the future, it’s going to have a positive impact on your business. Let’s dive into some of the benefits you can expect.

Better resource planning

One of the most important things workforce forecasting will do for you is help to quickly identify and fill any gaps in your team.

Imagine you’re staffing a restaurant, retailer, or hotel and you’re getting close to the holiday season. By forecasting, you can look at last year and see how many employees worked and if demand was properly met, and then use that information to adjust for current business trends.

Easier budgeting

Of course, it’s much easier to manage your budget when you’ve effectively forecasted what your resource needs will be.

Less overtime and staff shortages

The better you are at matching your resource supply and demand, the less you’ll pay for unnecessary staffing. You’ll also avoid lost revenue associated with a lack of personnel.

Strategic employee management

Yet another benefit to workforce forecasting is that it allows you to delve into your current employees’ skill sets. By doing so, you can get a head start on any training or recruiting you’ll have to do to meet future needs required to grow your business.

Benefits For Restaurants

As labor is one of the largest costs of a restaurant (along with food), keeping staffing in step with demand is essential. A workforce forecasting plan will help you manage your bottom line as you delight your diners and the employees who serve them.

Essential elements of workforce forecasting

Demand planning

Demand planning requires anticipating the number of employees needed at any given time, keeping in mind things like seasonality, events, trends, and large-scale tasks.

Historical data patterns

Look to the past and you can see your future: Employee trends like staffing patterns, overtime needs, tardies and call-outs, seasonal patterns, skill gaps, and turnover are important data points for forecasting future needs.

Current workforce assessment

To forecast future needs, you’ll have to look at your current employees to create a baseline. Headcount, demographics, roles and responsibilities, and skills are key factors to consider.

Gap analysis

Once you’ve assessed your current workforce, look to your strategic plan and capture any gaps in resources and skills you’ll need.

Workforce forecasting techniques

Quantitative forecasting

As the name suggests, with quantitative forecasting, you’re building mathematical and statistical models to determine what will be needed to implement your strategic plan.

You’ll look at historical trends as they relate to financial outcomes to determine correlations that may be predictive. Some data you might look at include employee numbers, demographics, and turnover rates to find correlations with sales.

Sling’s Employee Scheduling Software can help in reviewing your staffing trends, as it can provide an accurate accounting of everything from shifts worked and total hours, to tasks completed.

Qualitative forecasting

Another way you can forecast your workforce needs is by reviewing qualitative data. Examples include talking to experts who have been with the company, running focus groups, and conducting market research.

Qualitative forecasting can often pick up nuances that the numbers alone cannot.

Hybrid forecasting

Seeing the merits of both forecasting methods, many opt for a hybrid approach. Combining expert opinions or scenario planning with data, trends, or a regression analysis might give you better insight into future needs.

Steps to workforce forecasting implementation

1) Define your business goals

The first step in workforce forecasting is defining your business goals. Once you know where you want to go, you can create a strategic plan to get there.

Be sure to capture the skills and costs that will be needed for your plan to succeed.

2) Review current workforce

Now that you know what you’re going to need to meet your strategic plan, take a look at your current workforce.

How many people are on your team? What do they do? What are their skills and capabilities? Getting a handle on where you are now will create a baseline.

3) Think about future needs

Now you’ll want to take a look at your strategic plan. Ask yourself some questions:

How many more people will you need to meet your strategic goals?
Will there be additional skills needed? If so, what are they?
What is the potential cost of recruiting and hiring additional employees to fill these gaps?
Is it possible to retrain current employees to do any of the needed roles?

4) Decide on a workforce forecasting technique

Once you have a handle on your goals, current workforce, and future needs, it’s time to figure out whether you’re going to use quantitative, qualitative, or hybrid techniques in forecasting.

5) Build your forecasting model

Now that you know what technique you’re going to use, it’s time to pull the data points that you will be comparing and build your model.

6) Consider potential variables and find gaps

Add to your model a range of variables — or “what ifs” — and see where that leaves you. This can help you find gaps or additional resources that should be considered.

7) Set a plan to close any gaps

Once you have identified the gaps, tweak your forecast to close them. This might mean adding an extra resource or skill set in case that variable comes to fruition.

8) Review your progress and adjust as necessary

Now you can test your model in real-time against your true headcount, skill set, and business outcomes. You may want to update any assumptions as you go to make your model more accurate.

Better planning, better business

two employees doing workforce forecasting

At the end of the day, workforce forecasting is another way to plan for your business’s future with its most precious asset: its people. Doing this makes you more confident with your budgeting, saves you money, and creates greater employee satisfaction.

Sling’s employee scheduling software is an essential tool for resource planning. It will help you simplify time tracking and payroll while controlling labor costs so that you can stay on budget.

With Sling, managing your people is made easier for today — and tomorrow.

This content is for informational purposes and is not intended as legal, tax, HR, or any other professional advice. Please contact an attorney or other professional for specific advice.

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