Human resources (HR) forecasting involves projecting labor needs and the effects they’ll have on a business. An HR department forecasts both short- and long-term staffing needs based on projected sales, office growth, attrition and other factors that affect a company’s need for labor. In addition to forecasting the number and type of workers you’ll need, HR planning includes analyzing the various costs and administrative work that go along with adding workers or downsizing.
Using an Organization Chart
One of the most basic forecasting tasks for a human resources manager is the creation and maintenance of a company’s organization chart. If your business uses a flat organizational structure consisting of a few key employees who work directly with you, it’s a good idea to create a chart that shows how your company will be organized a year or two down the road. You might begin adding departments, such as accounting, marketing, sales and human resources, each of which requires a department head and multiple employees.
An organization chart helps you hire proactively and avoid ending up with employees who don’t fit in to your future organization.
Production and Scheduling
If you make a product, your labor needs change as sales rise and fall. Your human resources manager should keep in close touch with your sales manager to be aware of any spikes or declines in sales that affect your labor needs. This prevents falling behind on order fulfillment or paying idle workers.
A simple example of labor forecasting is a restaurant that has nights with many bookings and large parties and other nights when few diners make reservations. The manager forecasts the restaurant’s wait staff, bar and kitchen needs. At a factory, the sales, production and human resources managers work together to address seasonal spikes, large orders or the loss of a major customer or retailer.
Forecasting and Succession Planning
Human resources forecasting helps you avoid long-term holes in your staffing needs by keeping on top of which of your employees might be retiring, leaving or asked to leave. Using this information, your HR manager plans to fill these holes with internal staff or prepares for a quick recruiting effort.
As you receive the results of your staff forecasting, prepare your coordinators to move up to manager positions one day and your managers to make the move to directors, if possible. Lower-level staff can’t fill some positions because they require specific degrees or certifications, but some positions might best be filled by internal employees. Add employee training to your human resources efforts to prepare key staff to rise within the organization as staff members need to be replaced.
Budgeting Based on Future Staffing Levels
In addition to forecasting labor needs, human resources forecasting helps you plan budgets based on your future staffing levels. For example, demand forecasting might show a need for more seasonal workers. An HR review might determine the best way to handle this is with part-time workers or paying overtime to current employees.