4 ways HR forecasting can improve workforce planning
How many employees do you have? How do you need? How many will you need next month? Next year? Where will you need them? Where will you find them?
A solid HRMS, populated with up to date employee data, and equipped with current reporting and analytics functions, can be very useful in answering these questions.
For workforce planning – maintaining headcount, anticipating training and skills needs, planning talent and succession management, creating recruitment pipelines – you need data, because that’s the currency your HRMS deals in. So, rather than the old-fashioned head-scratching discussion about staffing needs, how can your HRMS forecasting functionality assist with planning?
1. Balance your supply and demand
As with any resource it’s a question of supply and demand, and the trick is to maintain the balance between the two. Put simply, the demand is your organization’s forecast need for employees; the supply is the workers that are available to you, either already in-house, via recruitment, or via casual or temporary sources such as agencies.
Recommended reading: HRMS Software Guide - find an HRMS which provides the right functionality for your forecasting activities
Taking a point in the future, your HRMS, especially if integrated with your ERM, should be able to predict the number and positions/roles of the employees needed, and the anticipated internal supply (factoring in the impact of your current turnover rate on the headcount). The difference is your anticipated need, to be filled from external sources.
2. Align the HR function more closely with organizational strategy
For the HR function, the eternal struggle is one of image. The cliché that HR is ‘not strategic enough’ or does not contribute to the bottom line still exists. Data-based HR forecasting is one way to demonstrate that your department is making a direct contribution to organizational efficiency. The basic steps are:
- Establish the organization’s strategic aims and targets/KPIs.
- Calculate the personnel requirements.
- Assess the current and likely future in-house resources, taking into account available skills and other characteristics in addition to simple numbers.
- Determine the requirements that the recruitment and training strategies must address.
- Agree relevant HR plans and activities to have the right people in the right place, at the right time.
Not only is the HRMS fulfilling its function but HR is making a tangible contribution to organizational productivity and flexibility in the process.
3. Carry out different kinds of HR forecasting
By drilling down into the data a little further, a more sophisticated contribution can be made with a range of forecasts. First, there’s the staffing-driven forecast in which the determining factors are the anticipated changes to staffing: turnover, promotions, retirements, and so on.
Secondly, event-driven forecasts take into account significant changes such as new impactful legislation or major business changes (e.g. diversification).
Finally , process-driven forecasts anticipate the effect of changes to ways of working (e.g. changes to the manufacturing process, or client engagement strategies) that will have a staffing implication.
4. Reduce costs
The bottom line for any technology-based change or function should include a cost saving. More accurate forecasting of workforce changes should result in cost efficiencies for the business - an HRMS which improves the quality of HR forecasting must be providing a satisfactory ROI.
Featured white papers
HRMS Software Pricing Guide
Get your comprehensive guide to the cost of HRMS software.Download
HRMS Software Vendor Directory
Put the most up-to-date HRMS vendor directory on your desk today! Over 60 vendors listed.Download
HRMS Selection Survival Guide
Select the right HRMS for your company with this easy-to-follow guideDownload
Five signs your HRMS needs an upgrade
If your HR software is making you work harder, not smarter, it’s time to take the plunge and seek...
How HRMS can improve HR benchmarking
Top areas where HRMS can support your HR strategy and benchmarking
How to develop a knockout HRMS project plan
Learn how to develop an effective plan for your HRMS project - from the scope document to schedul...