Check out our New Book: Red Cloud Road, How Strategic Process Management Drives Competitive Advantage. LEARN MORE >

HR forecasting: A guide to effective personnel management

Human Resource workforce forecasting (HR forecasting) helps company’s predict workload to ensure they have the right staff at the right time to handle the work. HR forecasting helps in personnel management for both day-to-day operations and unusual situations. This planning process is important, as it covers both short and long-term business goals. 

HR forecasting helps organizations effectively plan resources and optimally utilize the workforce. It allows companies to understand the workforce requirement and reduces the risks of staffing shortages. Furthermore, it helps to streamline recruitment responsibilities. 

Developing staffing or HR plan: a step-by-step guide 

1. Goal setting and strategizing 

Optimal employee development and staffing levels are essential to ensure the attainment of measurable goals. Human resource professionals must work with all areas of the organization to create a vision for how products and services will be delivered to customers.  

When it comes to setting goals and delivering staff, decisions must be based on data and performance measures that predict resource requirements. It is crucial to decide the factors and HR metrics you want to track, such as the turnover rate, the employee retention rate, capacity, and the roles needed. 

2. Assess the current workforce landscape 

The next step is to take stock of the current human resource requirements. It helps to know long it takes to carry out tasks, providing a clear idea of how many people are needed to fill roles. 

Considerations include the in-house skills, employees’ current performance, compensation rates, growth plans, etc. 

Analyze data to get an accurate landscape of the performance of your current workforce.  Gather and centralize your data to get deeper insight and invest in employee feedback to understand your current workforce profile.

3. Forecast staff for optimal HR management

When forecasting staffing levels, you don’t necessarily need to hire additional employees.  Like sales forecast templates, ready-made staff forecast templates in excel are available. These templates offer a structure and format that is easy to utilize. Gather the necessary data and fill in the template, which makes the entire forecasting process relatively easy. 

Accurate forecasting is possible through diligent trend analysis. By looking  at the historical data in your system, you can get a trend of future staffing levels. Analyzing industry benchmarks can also help with accurate staff forecasts. Invest in researching what your competitors are doing. 

4. A thorough gap analysis must be carried out 

The final step to HR forecasting is developing a staffing plan to identify the gaps where your organization doesn’t have the skills to achieve company objectives. This assessment considers the skills employed in your enterprise versus the skills available in the market. 

  • Assess previous shift management information: Typically, skill gaps happen during unusual or busy situations. You need to identify those peaks to ensure proper workforce planning so that your organization doesn’t suffer from a lack of employees when the need arises. If you notice that the skill gap is temporary, you can consider hiring contract workers to complete tasks during busy periods. 
  • Develop effective and accurate budgets: Determining workforce requirements enables companies to forecast costs. Companies may need to hire seasonal workers to meet business goals or increase salary levels to retain skilled workers. Workforce forecasting offers insight into predicted workforce expenses and helps businesses plan their overall human capital costs accurately. 
  • Better predict workforce needs: Forecasting helps businesses meet evolving needs for new production, skills, and productivity. Through HR forecasting, you can gain a deeper insight into your workforce trends and predict the turnover rate. 

Wrapping up

Business conditions are constantly changing. It means that your workforce is evolving and transforming too. To meet your HR needs effectively, it is important to review talent and skill requirements on an ongoing basis. 

HR forecasting works similarly to sales forecasting. You need to study and assess past data to make accurate future predictions so that your organization is ready to handle future staffing plans. With HR forecasting, companies don’t have to face the risk of worker or staff shortage during peak times or when they’re planning an expansion.

HR forecasting should not be a one-time process. Regularly analyze and review forecasts to make informed decisions based on changing business conditions.