The holy grail for any business would be the ability to predict the future. This, of course, is impossible.
Fortunately, today are available that give businesses insight into how busy they are likely to be in the future.
Why workforce planning matters
Accurate workforce planning is beneficial to small and medium-sized businesses.
Scheduling the exact number of employees, at the right time, in the right place to meet your demands will get you around two major problems:
- The cost of overstaffing, and
- Service issues that are more likely to happen when there aren’t enough people on shift.
Planning also helps you to effectively scale up or down quickly for busy events and periods to maximise profitability.
Research has shown that effective workforce planning can increase sales and employee productivity. One study revealed that when a retailer gave their staff stable schedules that met the demand, sales and productivity rose by 7% and 5%, respectively.
Currently, most business owners plan their workforce by gut feel, or complicated spreadsheets and workarounds. As expected, this doesn’t always work.
These days, businesses need accurate answers to questions like:
- How many customers will we service throughout the day?
- Based on this, who should be scheduled according to skill level, experience, and availability?
- What’s the ideal number of people required to match demand?
- How do we ensure that we always schedule people in the most efficient way?
Smart workforce planning
There’s a more scientific way of getting these answers. First, efficient workforce planning needs to know these two observations:
Demand signals: What drives volume?
This is the secret to forecasting demand and, therefore, staffing needs. For example:
- Past data on customer flow: How many customers did you have at the same time in the past? Accurate customer trends are a vital metric on which to base your forecast.
- Product popularity and sales trends: What are your best sellers? What’s sitting on the shelves, not selling at all? Historical metrics can ensure that you place staff where they are most needed in the business.
- Labour percentage: For some businesses, the cost of labour compared to sales is a critical driver.
- Seasonal and weather trends: Sunny days, public holidays, or important sporting events can impact how busy you’ll be, depending on your line of business.
Employee availability: Who have you got?
Understanding which employees you have available is the next essential data input for efficient workforce planning. For example:
- How many staff do you have in total?
- When you consider shift preferences, working days per week and holidays, what is their availability like? How are they contracted? Full-time, part-time, variable hours, etc?
- What is their cost?
- What are each of their skills, capabilities, and qualifications?
Sources for data
Where you find these two data inputs will depend on how you’ve set up your business.
Electronic point of sale (EPOS) systems will save historical sales data for many businesses. Booking systems or practice management systems can also show you trends in customer flow over time.
Data on labour costs and availability can be found within HR software, payroll systems, or workforce management software.
Making it smart
To get the most value from these data inputs, you need to ensure they feed directly into a system that can use them to answer important questions about scheduling and demand.
Cloud-based apps make this a breeze. You can gather all relevant data in a business insights app, or you can use the data from one app to improve the performance of another.
An example could be inputting sales forecasts into a workforce management app to advise employee requirements.
Starting with only past sales and employee availability can already drive major savings.
Here’s what smart workforce planning looks like:
- Optimum scheduling: Using your own business logic, you can automatically schedule the employees you require to meet the predicted demand, effectively turning guesswork into an accurate and scalable scheduling model. A restaurant, for example, may need more servers on a Friday than on a Monday.
- Clear insights: For example, tracking the variance in workforce percentage and tweaking schedules accordingly, or setting custom metrics against demand signals that are unique to your business.
- Tighter budgeting: Especially important when cost control is a factor, managers can clearly see where they can save, as hours and wage budgets are clearly available at all times.
- Constant visibility: Real-time performance stats ensure you keep abreast of performance throughout the week.
Final thoughts on workforce planning
Many companies attempt to keep costs to a minimum by sticking to extremely tight budgets as they place their focus on survival and recovery. Because scalability is necessary, you must be confident you have the right amount of people at the right time.
Smart workforce planning is perfectly suited to today’s requirements. Tight scheduling and accurate data help reduce waste and keep costs low. And with planning based on actual metrics, it’s simpler to scale without additional admin and to plan for future peaks and troughs.