Predicting Workforce Gaps

Updated: Apr 23, 2019

Dear Workforce:

How exactly do we perform a gap analysis during workforce planning? It’s easy to analyze the current situation, but getting a handle on our future needs is the challenge for me. What analytical model should I use?

--Bridging the Gap

Dear Bridging the Gap:

A gap analysis, typically done as part of workforce planning, helps you decide what steps are needed to address workforce shortages or excess capacity. You start by establishing a future date for the gap analysis, such as 12, 24 or 36 months. Then determine the gap between the workforce you expect to have and the workforce you will need as of that date, based on your assumptions about the future, such as: We expect our turnover rate to hold steady for the next 24 months.Our workload will increase significantly during the next 24 months, so we will need to increase our nonexempt workforce by 20 percent.With 35 percent of our senior executives eligible for retirement, we expect to have a serious shortage of managers ready to assume senior leadership roles. Since nobody can predict the future with complete accuracy, the quality of your assumptions is a key element in creating a useful gap analysis. Depending on what your analysis shows, you will want to take action to address the needs: typically either strengthening your recruitment and development activities to meet an expected talent shortage or identifying ways to absorb or redeploy excess head count through attrition, retraining or outplacement.

The typical gap analysis incorporates the following key information:

Target date. The future date that you establish for your forecast. If you do a staffing analysis each fiscal year, you might compare head counts from day one of this year to day one of next year. This year’s numbers are “actual” and based on records from historical sources; next year’s numbers are projected and based on trends and “best guess” estimates using assumptions about the future.Current employees. Current full-time equivalent employee head count on the starting date of the gap analysis.Expected transfers and promotions. The number of employees you expect to be promoted or transferred out of their current positions by the target date.Expected retirements. The number of employees you expect will retire by the target date.Other turnover. The number of employees you expect will leave their current positions for reasons other than transfer, promotion or retirement. This could include voluntary turnover, dismissals and the like.Employees required as of target date. The number of employees you believe will be needed to do the work of your company or department.Employees expected as of target date. The number of employees you expect will remain in position as of your target date (or the number of employees remaining after accounting for transfers, promotions, expected retirements and other turnover).Gap. The number of employees required, minus the number of employees expected to be on staff at the target date. The number reveals how many employees you will need to recruit externally or how many existing workers you must redeploy.

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