Workforce Forecasting aims to estimate current and future trends, historical patterns, and external events and their impact on an organisation. There is no method of forecasting that can predict the future with 100% accuracy/ However, the more sources of data, the more accurate forecasts will be.
Workforce Planning takes Forecasting a step further and uses the Forecast, along with other detailed analysis methods, to design a course of action to ensure the organisation has the resources to achieve their business goals and priorities. This way, the organisation doesn’t suffer due to lack of talent or skills.
Strategic forecasts are usually made by Senior Leaders, the Finance department, Analysts, or even outsourced specialists.
Workforce Planning is typically implemented and carried out by HR and Talent Acquisition, as they are responsible for hiring, retaining and training employees.
Workforce Forecasting is a top-down approach that is based on assumptions from several departments across an organisation. These assumptions are made based on historical data, such as attrition, as well as current trends and business performance. The forecast may be made based on facts, but it is still an estimate and relies on a certain degree of guesswork.
Workforce Planning uses assessment tools to figure out the current state of the workforce, and then creates plans to address these issues in the short- and long-term. Workforce Planning is a holistic approach that considers Workforce Forecasting as one element of the process, as well as skills gap analysis, succession planning, and retention.
When you run a Workforce Planning and Forecasting process, the outcome should be actionable data to work with and create plans from. Forecasting may be able to tell you what your competitors are up to and how much budget is available next year, but with a robust assessment Workforce Planning can tell you:
This data can only be collected using a bottom-up approach, ie. Assessing each team individually. This is because managers at a line manager level are more in tune with the needs of their team compared to higher-level managers who have a more strategic role.
By using a Workforce Planning assessment tool, all the data you need is quickly and easily collected from line managers. You can then use this information in conjunction with business/workforce forecasts to create actionable plans. For example:
Every business, regardless of size, benefits from Workforce Planning. Organisations are constantly in a war for talent, and building and maintaining a robust skilled workforce in a sea of competitors is no easy task. Especially in harder to fill roles where there’s a lot of competition for a small pool of talent, not having the right people in the right roles at the right time can mean a huge loss of productivity, affecting the bottom line. Competition will only get fiercer as time goes on, so the earlier organisations start workforce planning, the more of an advantage they’ll have over their competitors.