As a business owner, you’ll know the positive impact of capable employees and the negative effects of not-so-competent ones. When you’re planning for the future of your business it’s essential that you take stock of your resources and where you may need to invest in improvements as you move forward. That’s where headcount forecasting and its many benefits come in.
What is Headcount Forecasting & Planning?
Also commonly known as workforce planning or organisation sharting, headcount forecasting is the process of strategically creating and implementing growth initiatives with the aim of achieving both long and short-term goals. At its most basic, “headcount” refers to the number of people employed by your business at any given time. The process of headcount forecasting helps create a plan that indicates the amount of staff required to meet your company’s needs.
What are the Different Types of Headcount Forecasting?
There are many noteworthy ways to approach headcount forecasting, and everyone will argue that their strategy is best. Regardless of the strategy you prefer, there are two primary categories for which forecasting is appropriate and necessary. These are as follows:
1. Headcount Demand Forecasting
Demand forecasting is the process a business works through in predicting the number of employees and roles that it requires for the future. These estimates are based on the hours required and are impacted by several factors, both internal and external, such as production levels, economic climate, changes in technology, and organisational structure.
2. Headcount Supply Forecasting
Supply forecasting refers to the estimations made around the supply of human resources based on availability, as well as internal and external supply.
4 Steps to Create a Successful Headcount Plan
Now that you know what headcount forecasting is, how should you go about creating a successful one? Here’s our 4-step strategy to a successful headcount forecasting strategy:
1. Identify Business Struggles & Challenges
Taking an introspective look at your business operations is a tough but necessary task. And when it comes to headcount forecasting, analysing the challenges you face is a crucial first step. Not sure how to start? Answering these questions should get you going:
- Are there technologies that you can employ to add to your competitive advantage?
- How are your customer’s needs evolving and how can you adapt to these expectations?
- How have your competitor’s offerings changed?
- Are there industry regulatory changes ahead that will change how you do business?
- Do you have any growth goals? What are they, and how do you plan to achieve them?
2. Establish Metrics for Analysis & Insight
Leads of successful organisations make important decisions based on data and evidence. The best way to gather useful insights is by establishing and implementing a set of metrics that you know will tell you what you need to know. Common workforce metrics include the following:
- Position requirements
- Attrition rates
- Salary data
- KPIs and other performance ratings
- Department hierarchy
- Employee skill sets, licenses and certifications
3. Evaluate Your Workforce
Once you’ve determined the metrics that work for your business and the insights you require, it’s time to put these to the test. At this stage, it’s important to consider the following:
- Is your business expanding in any way?
- Are there any positions that you can do without in order to maximise the overall ROI of your workforce?
- Are you able to identify your high potential employees?
- Do you know which employees are a flight risk?
As you analyse your workforce, pay attention to critical roles and the employees who currently fill them. Focus specifically on those who fill roles that are necessary for implementing your business strategy in the near and mid-term. Consider whether they’re the best people for the job, and make adjustments where necessary.
4. Make Sure Your Headcount Forecasting is Agile & Inclusive
Regardless of how often you decide to engage in headcount forecasting, we recommend that your strategic approach is agile, iterative and inclusive. Prioritise revisiting your forecast strategy on a regular basis to assess what’s working and make adjustments where necessary.
How can EasyRoster Help with Headcount Forecasting?
EasyRoster is a workforce management solution that helps keep track of your employees at every level. A software system like ours comes in handy when you’re planning for the foreseeable future of your business. How? With all your employee data stored in one place, it’s easy to take stock of what’s working, what’s not, and where your potential gaps may be.
Headcount forecasting has its place in all businesses, but it’s up to you to decide where it fits in with your strategies and workforce management style. What we can say for sure is that using a platform like EasyRoster is the best way to keep your ducks in a row for when your forecasting day does inevitably roll around. Book your customised demo with us today to learn more about how EasyRoster can help your business move forward.
As a Senior Product Manager at Adapt IT, I lead the division responsible for one of our flagship products, EasyRoster. Our primary focus is to empower organisations with top-tier Workforce Management Software, enabling them to optimise operational efficiency and streamline processes.
With over 12 years of experience in the industry, I have collaborated with clients across 25+ countries, delivering training sessions and offering labor efficiency consultations to diverse groups of professionals.
In my capacity as Senior Product Manager, I oversee a multidisciplinary team that together, strive to create innovative solutions and maintain our commitment to excellence in the realm of workforce management.