What Is Work Distribution And Why Is It Important?
For your team to function efficiently, complete projects on time, and produce the highest-quality work possible, it’s...
If you feel like your business is always behind the eight ball when it comes to staffing levels, labor costs, and employee management, workforce forecasting may be the solution you need.
Looking “down the road,” so to speak, can help you figure out how many staff you’ll need on any given day and give you insight into when to hire and when to hold.
In this article, we define workforce forecasting and discuss why it’s important and how to implement it in your business.
Workforce forecasting is the data-driven process of using historical information, internal and external influences, and predictive analytics to anticipate your business’s future staffing needs.
In reality, you may be doing a form of forecasting already when you think about how you could have structured a shift to make it run better.
For example, you remember last Friday during a dinner shift that your team could have used one more server to handle all the traffic and you make a note to schedule another staff member next Friday.
That’s basic workforce forecasting in a nutshell.
With the right data and the right analysis, you can extend the prediction past your own memory well into the future so that you can plan staffing levels weeks, months, and years in advance.
Workforce forecasting provides another layer of control to help you manage one of the business’s largest expenses: labor costs.
When you can match planned staffing levels with the actual needs of your business, you’ll be better positioned to avoid both overstaffing and understaffing — both of which may lead to increases in labor costs.
Overstaffing can result in paying more employees than is really necessary to do all the work on hand. Understaffing, on the other hand, can result in paying more overtime costs to cover the work that needs to be done (not to mention lower productivity and lower customer satisfaction).
Workforce forecasting can help you schedule the right number of skilled and experienced staff to meet the customer demands for the day, week, month, and year.
Matching staff to demand in this way can help your team deliver high-quality service as efficiently as possible.
When that happens on a regular basis — as it can with workforce forecasting — customer satisfaction and loyalty are more likely to increase and remain at levels that benefit your team, your customers, and your business as a whole.
When you are able to “see into the future” of your organization, you’ll be better positioned to identify skill gaps before they become a problem.
Workforce forecasting can help you develop targeted recruitment, hiring, training, and retention programs so that staffing remains steady, consistent, and exactly what you need for your business to be successful.
Strategic planning also makes it easier for your business to set goals and have the right team in place to meet — or exceed — those milestones every time.
Another important aspect of workforce forecasting is its ability to help you understand employee engagement.
When you switch to the long view that forecasting provides, you’ll have more information with which to address integral employee issues, such as:
These variables can help you build a positive work environment that keeps employees engaged, challenged (in a good way), and excited to work for your business.
The first step in implementing workforce forecasting in your business is to define your needs.
In most cases, this involves asking specific questions, such as:
Some of these questions (and others) may be relevant to your business, some may not be, but each one can help you figure out integral staffing metrics, including:
Indeed, that’s what this step is all about: Identifying and defining the needs of your business so you can tailor the forecasting process to help you find the solution(s).
The next step in implementing workforce forecasting in your business is to gather relevant data.
To make the process a bit less overwhelming — because there’s a lot of data out there — divide your search into two categories: Internal data and external data.
Internal data often includes such metrics as:
External data often includes such metrics as:
If you feel that another piece of data will help create a more accurate forecast, don’t hesitate to include it in your search.
The types of data that you’ll need will depend on specific needs and questions you established in the previous step.
There are various forecasting methods available, each with its own strengths and weaknesses. The best method for your business depends on the data that’s available, the complexity of your needs, and the level of accuracy that you want.
In some cases, you may be able to conduct the workforce forecasting for yourself. In other cases, you may need to engage a third-party company that specializes in data analysis.
They can help you utilize some of the more advanced methods, including:
Within the field of Quantitative Analysis, your business can choose to employ:
Once you have the results of your workforce forecasting, analyze and interpret the information in order to apply it to your business.
As you do, look for trends, bottlenecks, and deviations from expected results and ask questions such as:
Analyzing the data in this way will help you understand the best way to approach the final step in the process: Developing a staffing plan to address future issues.
This is where the rubber meets the road, so to speak.
Armed with the results from the previous four steps, you’ll have everything you need to develop a staffing plan that fits the needs and goals of your business.
Keep in mind that you may not be able to do exactly what the forecasting method suggests because of budgetary constraints (and a long list of other variables), but you will likely be able to implement some of the strategies on the list.
Even implementing just one or two suggestions can move your business closer to controlling the future staffing needs and labor costs of the team.
Workforce forecasting is only as good as your ability to develop a staffing plan and put it into practice. For that, you need software that can make every aspect of staff administration as easy as possible.
You need Inch.
Inch helps you coordinate, organize, simplify, and streamline all your workforce management activities with a suite of tools for:
Regardless of the type and size of business you run — or whether your employees work in the office, in their own homes, or on the road — Inch can help everyone stay organized and focused on the task at hand.
For more free resources to help you manage your business better, organize and schedule your team, and track and calculate labor costs, visit TryInch.com today.
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