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Minimizing Risk through Talent Forecasting

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As the nature of work evolves, businesses struggle to transform. They face an existential challenge as digitization continues alter the way people work, how labor and jobs are defined, and how workers are recruited and employed.

By now, most enterprises have accepted that contingent workers will be a part of their workforce solution moving forward. Statement of work talent, independent contractors, freelancers, and other non-employee resources give companies the flexibility to weather down times and the nimbleness to take advantage of opportunities. Integrating contingent workers with full-time staff is a proactive way to guard against talent risk, optimize teams, and plan for future needs.

For the process to work, however, companies must be able to forecast their talent needs and business trends in the short-term. This will ensure the firm can act quickly enough to secure and engage outside talent when demand is great. Talent demand forecasting also helps companies determine the best mix of workers and to build and nurture talent pools and pipelines for strong bench development.

Talent-demand forecasting entails much more than merely taking inventory of the talent companies already have and can call upon in the future. A workable plan also can pinpoint the tasks the organizations will be undertaking, the demand for the products and services they provide, the skills they will need in order to remain competitive, and the capacity supply within the contingent market.

Internal and External Assessments

To accomplish the mission, companies must assess not only their expected needs, but also the expected state of the industry and the talent market.

Internal reviews should focus on how the company itself will change over the coming few months or couple of years. Predictions should be based on trend analysis, operational strategy, market shifts, etc. From there, the company can determine its labor needs. Here, the spotlight should be on capacity needs, not numbers of employees or freelancers. Start by calculating how the industry and company changes will influence the number and nature of tasks and projects that must be initiated and completed. Then estimate how those changes will affect the revenue and cash flow inputs that will govern investments in talent. Compare these numbers to what your skills reservoir – employees and contractors – will look like during the forecast period. Will key employees retire? Will non-renewable contracts expire?

External reviews will determine not only how abundant (and therefore, how costly) the needed supplemental talent will be. It will also help establish how long you will be able to count on its availability and how quickly you can access it. Answers to these questions and your specific needs then can inform your decisions as to what talent types are best suited and best targeted for your strategic intent. For instance, if you decide you have a long-term need for website development, you can decide to hire a full-timer or two. If an extended, complex, one-time project looms, a statement of work arrangement might be in order. If you will need to write sporadic press releases or white papers, building a stable of freelance writers might be the best approach.

Lessons from Other Departments

Workforce projections and demand forecasting are difficult and imprecise undertakings. Fortunately, many of the insights and techniques you need can be borrowed from departments and professionals within your organization. Your marketing, HR, procurement, inventory management, IT, and other departments can guide you through many of the action items you need to accomplish in order to predict and fill future talent needs. Here are some tools you can use to determine which skills and worker types will work best for you and how to ensure you will be able to attract workers with those skills when you need them:

  • Marketing– Take a page from your development and marketing teams to gauge demand. Just as these teams create and then meet demand for products, you need to stimulate your firm’s appetite for contingent talent as a superior alternative to full-time staff. Use these resources to formulate the most effective way to develop external talent.
  • Procurement – Use your team’s product-demand forecasting skills to determine the elasticity of your talent demand. The relative cost of hiring internal staff vs. engaging contingent workers will go a long way toward determining which talent type you use. Similar to make-or-buy decisions, weigh the cost of finding, attracting, training, on-boarding, paying, and providing benefits to in-house employees against the fees, loss of control, cultural factors, and other considerations that come with using outside talent.
  • Inventory Management – Just as “just in case” inventory sitting in a warehouse exacts opportunity costs and ties up valuable capital, over-staffing soaks up space, maneuverability, and operating assets that could be used more productively. You cannot afford the luxury of high-priced talent sitting on the bench. Rather than supporting a redundant supply of “just in case” talent, consider adopting a just-in-time approach to talent. Like its namesake inventory process, just-in-time talent supply relies on department-level managers to estimate their needs and contribute to bottom-up simulations of overall talent needs. Running several simulations with different variables and assumptions can create most likely talent scenarios.
  • Supply Chain Management – Demand forecasting must also calculate and minimize the time it will take to fill skill service gaps and open positions. Much like delivery time for raw materials and equipment parts can delay production resulting in lost opportunities, lags in talent acquisition and implementation can hinder productivity. With speed of the essence, there is the possibility that worker quality would suffer as your team hastens to plug holes in key programs and departments. It is the job of demand forecasters to pre-qualify candidates to negate that risk. Working with a trusted managed service provider (MSP), engaging talent agencies that access diverse worker pools, and staying in contact with apt candidates via social media are excellent ways to accomplish this.
  • Information Technology – Like sophisticated MarTech and FinTech software, workforce management platforms’ strengths lie in shedding light on and allowing analysis of current performance and future scenarios. Contingent workers compose parts of several departments and are drawn from diverse sources. This makes them difficult to track for many organizations. Contracting with an MSP can increase transparency and combine various performance metrics to create a crisper, more vibrant picture of worker demand and usage. MSPs can draw upon their experience and the industry-wide data they have collected to customize contingent workforce formulas based on “what-if” models. The more robust your data, the more accurate your models will be and the easier it will be to adjust talent strategy as market factors change.

Metasys offers comprehensive workforce solutions that include the optimal mix of full-time, freelance, contract, and statement-of-work talent. We can create a plan for your worker integration that includes hiring schedules, training, and on-boarding that alleviates the risk of overspending when skills demand is low and suffering through under-productivity when demand is high. Contact us to discuss how Metasys can analyze the internal and market factors that drive your firm’s talent demand and how our modeling and simulations can pinpoint your worker needs in the short and middle term.

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