How To Conduct a Workforce Analysis To Inform Your Recruitment Strategy
In today’s business landscape, data is the lifeblood of a company. Leveraging data to conduct a comprehensive workforce analysis provides employers with powerful, actionable insights to help them optimize their operations. Understanding data points such as turnover rate, skill gaps, profit per employee, and general demographics can be beneficial for making critical business decisions.
Conducting a workforce analysis is an involved process and can differ based on the company and industry. But when done correctly, it can be an invaluable tool for reaching your business goals.
What is a workforce analysis?
By definition, a workforce analysis is a process where the company itself (or an outside firm) collects information about the workforce and analyzes it. The company can do this through surveys, interviews, or audits. The analysis can be localized to a particular department, or it could be a companywide review.
The data is used to determine if the company’s labor supply is adequate, if more hires will be needed, if the turnover rate is too high, and other details related to the workforce. It can also be used to identify potential gaps, and subsequently devise plans to address them.
Why is a workforce analysis important?
Every company has goals and objectives it’s trying to achieve. A workforce analysis essentially gathers data to help the company make staffing decisions to reach those goals. The data collected by a workforce analysis can have long-lasting effects according to Forbes, so it’s important to execute them properly.
These effects may impact your recruitment strategy. For example, if your company has finished developing a new product and is preparing to bring it to market, you may want to bring in more talent to produce that product. Or if your analysis finds the turnover rate of your production workers has increased this year, you may want to hire more, or learn more about why the rate is so high.
How to conduct a workforce analysis
A workforce analysis is a meticulous process that can be done by your company’s HR department internally, or by outsourcing the task to a staffing agency. We’ve outlined the common steps below.
1. Supply Analysis
According to the National Institute of Health (NIH) a supply analysis helps companies understand their current workforce and how it may change over time. Activities may include cataloging the total number of employees, demographics, skill sets, promotions, and more. This analysis can be used to make future projections about your workforce’s needs.
2. Demand Analysis
To forecast your company’s future workforce composition, the Society for Human Resource Management (SHRM) recommends a demand analysis or demand model. The demand analysis projects the future needs of a company by focusing on the expectations of your employees, new projects, products or services, market conditions, upcoming regulations, new responsibilities, etc. This analysis can be used to project potential upswings in demand on your staff and respond with staffing changes.
3. Gap Analysis
SHRM also suggests conducting a gap analysis to identify discrepancies between the supply and demand of your workforce. The results differ based on your company’s needs and values. You may need another installer, or you may have too many assemblers or not enough HVAC technicians. The data gleaned from this exercise may have immediate impacts on your overall recruitment goals and strategy.
How to create a recruitment strategy from your workforce analysis report and data
This is where you use the results of your analysis and apply them to your recruitment. Sometime after making a series of new hires, you may want to repeat the workforce analysis to see if the gaps were adequately addressed. It may prove useful to schedule these exercises at regular intervals to stay on top of necessary adjustments to your workforce to meet your business needs.
For example, if you’ve identified a gap in supervisors — the turnover rate is high, you have a new project ready to start, and are anticipating needing more management-level employees — you’ll want to tailor your search strategy accordingly.
Conducting a workforce analysis takes time and preparation but the results can lead to long-term benefits. To learn more about how we can help you overcome your workforce challenges contact us today.