Authored by: Juanita Coley
Guest Interview: Alec Bowman
First of all, What is Forecasting?
Before we delve deeply into the role of forecasting, let’s discuss WHAT forecasting is.
Too many times, individuals and organizations alike don’t have a clear picture of the difference between what forecasting is and the role of forecasting and forecasters.
Therefore, the impacts are limited. So, let’s start here first!
Forecasting, in its simplest terms, is predicting the future.
In the context of Workforce Management (WFM), forecasting predicts demand and workload requirements based on historical events, trends and working knowledge of the
industry and business behaviors.
There is a practice to forecasting, especially when it comes to WFM. However, for the sake of this blog we won’t get into the details of the “HOW To’s… that’s more of a workshop.
What we DO want you to get from this blog is a keener understanding of the role of forecasting and the forecaster within your organization, to ensure that you (1) have a deeper appreciation and understanding of how to best leverage the function of forecasting AND (2) deepen your relationship with the forecaster inside your organization for the benefit
of driving a deeper WFM culture and effectiveness.
Now, let’s break down the ABCs of forecasting:
Analyze Historical Data – Effective forecasting means going deep into historical data. Scrutinizing past staffing trends unveils patterns and cycles, enabling businesses to
proactively navigate peak seasons, anticipate growth, and fill workforce gaps strategically.
Internal and External Factors – Forecasting isn’t just an internal matter – it’s also about considering external influences. Economic trends, industry shifts, and technological
advances significantly impact skill demands. By integrating these external factors, businesses can continuously adapt to the ever-changing landscape, staying ahead of the competition.
Predictive Analytics – Meet the superhero of forecasting: predictive analytics. Armed with advanced algorithms and machine learning, it doesn’t just predict headcounts;
it foresees skill gaps. This empowers businesses to proactively address shortages through targeted training and development programs.
Now the role of Forecasting…
Ok, now that those disclaimers are out of the way and you finally understand WHAT forecasting is (predicting demand and workload based on historical data and working
knowledge of the industry and business behaviors), let’s now discuss its role.
The role of forecasting is critical because it does MANY great things for a business if done well. Let’s discuss some of my favorites:
- Strategic Decision Making – Forecasting, when executed well, should enable an organization to make strategic and informative decisions. By relying on not only
historical data but also on industry knowledge, forecasting becomes an asset to any business.
- Keeps You Agile – Many people make the critical mistake of allowing their plans to make them rigid when, in reality, planning SHOULD allow you to be more
agile and be able to pivot. It is because you have a baseline that you should be able to respond instead of having knee jerk reactions. One of the main reasons to
forecast is not simply to know what to expect but to be able to pivot (one of my favorite things about having a plan is being able to pivot if needed…
I know it sounds odd but it’s true) quickly when what you expected doesn’t occur. In project management, I believe this is called planning for the unknowns.
I’ve adopted this concept in forecasting as the “known unknowns” LOL! If it can happen, it likely will.
- Gives You Perspective – The role of forecasting gives an organization a proper perspective on expected outcomes. How so? Many times, as founders/executives,
especially if they are passionate about the product/service, we can be zealous, meaning we want to just create, create, and create without regard for the
“how” or “the cost of the how.” Forecasting can be strategically leveraged to convey in a non-critical way to leadership the how and the cost of that how.Take for example a very service-oriented leader (which I believe we should be) that wants customer service to be available 24/7 and for their customers to
always have access to the business for support. Forecasting, in a supportive and non-critical way, can give the leader perspective on what they would need to
accomplish that, putting the ball back into the hands of the leader to determine if that is the best use of resources at that stage of the business.
Again, while there are many other things and tactical things about forecasting, I want to leave you with this as a leader. You need the role of forecasting in your business,
AND a forecaster can be a strategic asset to you if leveraged and appropriately appreciated.
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