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- 27 Feb 2023Zenefits Review
Workforce analysis systematically estimates an organization's current and future workforce needs and capabilities to identify gaps and opportunities for improvement.
Moreover, the analysis typically involves analyzing various factors such as the number of employees, their skills, qualifications, experience, education, compensation, and performance, as well as trends in employee turnover, workforce demographics, and diversity.
However, the main purpose is to help organizations make informed decisions about Human Resource Management (HRM) strategies.
Workforce analysis is a critical tool for organizations to ensure they have the right people, with the right skills, in the right place, at the right time to achieve their strategic objectives.
So, workforce analysis is important for organizations for several reasons, including:
Workforce planning has several advantages for organizations, including:
Workforce planning enables organizations to identify their workforce needs in advance and take action to address any potential shortfalls.
This can help organizations avoid costly recruitment and training expenses and ensure they have the right people with the right skills.
Workforce planning can help companies identify skills gaps and take steps to address them through training, development, and other programs. This can help improve employees' productivity and performance, leading to better business outcomes.
Organizations can have a clear understanding of their future workforce needs, enabling them to make better decisions about recruitment, training, and other human resource management activities, using workforce planning.
This can help organizations to align their workforce with their strategic objectives and improve their overall business performance.
With workforce planning, organizations respond more quickly to changing market conditions and other external factors.
By clearly understanding organizations' workforce needs, they can adjust their staffing levels and skill sets to meet changing demands, reducing the risk of underutilized or overburdened staff.
Career development opportunities for an organization’s employees arise due to workforce planning. It can improve their job satisfaction, engagement, and retention.
By investing in their workforce, organizations can build a culture of loyalty and commitment, reducing turnover and attracting new talent.
Workforce planning or analysis helps organizations identify areas to improve workforce diversity and inclusion.
By identifying areas of improvement, they can create diversity and inclusion strategies that enhance organizational culture and promote diversity within their workforce.
Overall, workforce planning benefits organizations by improving their overall performance and competitiveness. It enables them to align their workforce with their strategic objectives, reduce costs, and improve productivity and employee engagement, leading to long-term success.
Workforce analysis has many categories that help companies evaluate their current and future workforce needs. However, the three main types remain involved in every company’s workforce analysis.
Supply analysis involves analyzing the current workforce and existing employees' skills, experience, and qualifications. This analysis can help organizations identify the skills and expertise available and determine whether additional training or recruitment is necessary to meet future demand.
For example, if a company loses 5% of its employees and always maintains a staff of 10,000, it shows it loses 500 employees annually. Now can prepare efficiently to replace the lost employees to decrease the loss rate.
Gap analysis involves comparing the demand for labor with the supply of labor available within the organization. It can help organizations identify areas where they have a surplus or shortage of skills and expertise and can guide decisions about recruitment, training, and development.
Moreover, gap analysis can also help organizations identify potential risk areas, such as skills shortages, that could impact the organization's ability to meet its goals.
Demand analysis analyzes the demand for labor within the organization, including the number of employees needed to meet business goals, the skills and qualifications required for those roles, and the timeframe for filling those positions.
This type of analysis helps organizations understand their future hiring needs and can guide decisions about recruitment and training.
An organization can easily conduct a workforce analysis using the following steps:
Define the purpose of the workforce analysis, including the questions the process aims to answer and the specific objectives to be achieved.
Gather data on the current workforce after you have set your goals. It may include demographics, job descriptions, performance metrics, skills and qualifications, turnover rates, and other relevant information.
Use appropriate analytical techniques to evaluate the data collected. The company can choose from Statistical analysis, Trend analysis, Correlation analysis, Competency mapping, or Diagnostic analysis.
Then, identify trends and patterns in the data that may be relevant to the objectives of the analysis.
After the analysis, determine gaps between the current state of the workforce and the desired state based on the objectives of the analysis. These gaps may be related to skills, qualifications, performance, or other factors.
Based on the findings of the analysis, create recommendations for addressing the identified gaps needed for company growth. These may include recruitment and retention strategies, training and development programs, job descriptions, or organizational structure changes.
Put the recommendations into action. Then, monitor progress and adjust strategies as needed to achieve the desired outcomes.
You should monitor the results of the workforce analysis and the actions taken based on its recommendations and evaluate the impact on the organization.
Use this information to make any necessary adjustments to the workforce analysis process in the future.
Overall, conducting a workforce analysis can be a complex process. Still, by following these steps, organizations can gain valuable insights into their workforce and make informed decisions to improve performance and achieve their objectives.
Employers should seek the following strategies during workforce planning:
Efficient workforce planning involves three structured and strategic approaches to achieve the company’s business objectives.
