Workforce Analysis: The Starting Point for Smarter Workforce Planning

Businesses spend significant time planning where they want to be in two, five or even ten years. But alongside plans for growth, technology and changing customer demands, there is another important question:

Will you have the workforce you need to get there?

That is where workforce analysis comes in.

What is workforce analysis?

Workforce analysis is the process of gathering, analysing and interpreting information about an organisation’s workforce to understand its current position and future requirements.

It can examine areas such as workforce size and structure, skills and experience, capacity, recruitment and retention, employee turnover, workforce costs and succession risks.

The purpose isn’t simply to produce more data. It is to turn workforce information into useful insight that supports better business decisions.

For example, an organisation may have enough people to meet its current workload, but analysis could reveal that several critical skills are concentrated among a small number of employees. If those people leave or retire, that creates a significant future risk. Identifying that risk early gives the organisation time to act.

How does workforce analysis work?

A good workforce analysis starts by establishing an accurate picture of the workforce today.

What do we have? How many people are employed? What roles do they perform? What skills and qualifications do they have? Where are vacancies occurring and what does the workforce cost?

Where are the gaps and risks? Are particular skills in short supply? Are certain roles difficult to recruit? Is specialist knowledge concentrated among a handful of individuals? Are some areas experiencing high turnover?

What will we need in the future? Organisations then need to consider how growth, technology, regulation, changing customer demand and wider industry developments could affect their workforce requirements.

Comparing where the organisation is today with where it needs to be creates the foundation for an effective workforce plan.

Why does workforce analysis matter?

Without workforce analysis, workforce decisions can easily become reactive.

Someone leaves, so a replacement is recruited. Demand increases, so more people are hired. A skills shortage appears, so the business competes for increasingly expensive external talent.

Workforce analysis helps organisations identify these challenges earlier.

That can lead to better recruitment decisions, reduced workforce costs and improved productivity. It can also highlight opportunities to retrain or redeploy existing employees rather than automatically recruiting externally. Most importantly, it gives organisations more options.

When a critical skills gap becomes an immediate operational problem, the number of available solutions tends to shrink, while the cost of solving it can increase.

From analysis to action

Workforce analysis is an important first step in strategic workforce planning.

By understanding current capacity, capabilities, costs and risks, and comparing them with future requirements, organisations can make more informed decisions about recruitment, retention, development and workforce investment.