Forecasting Demand: 5 Questions to Help You Staff Accordingly
Jul 14, 2020
Let’s be honest, a crystal ball would be a lifesaver in any business or industry. We’ve all been there: an unexpected Tuesday rush, a surprisingly slow travel month, or a sudden influx in orders. Unfortunately, we haven’t yet discovered a crystal ball. However, there are things we can do to better predict what’s coming—and while not perfect, these things can help to improve efficiency and reduce headaches.
Managers are constantly walking a fine line in order to plan for the staff on hand. In one respect, they need to keep from understaffing when business is booming. They’re also striving not to over-staff when the market may be...not-so-booming. This constant balancing act, finding the right number of employees to maximize production without negatively affecting the bottom line, is tricky. Yet, there are ways to determine a solution.
What’s the answer to finding that staffing sweet spot? It starts with asking the right questions. Start with asking yourself these five questions in order to determine how many employees your company needs to thrive at any given time:
- What is the current economic climate?
How is the job market? Is there inflation? When the economy is great, people have money to spend and are more apt to spend their dollars on luxury items, like dining out or traveling. When times are tough, they’re holding tight to every penny they have. Depending on your actual service or product, your future bottom-line may dictate your strategy. Research not just where you are today, but where consumers will be spending their money tomorrow, and address staffing accordingly—don’t assume your vertical will come back as strongly as others right away.
- How is the social climate?
There are many factors that correlate with the current environment consumers are living in. Recent events, such as the COVID-19 pandemic, have obviously had an impact on people’s lifestyles and interactions with their community. With higher restrictions, people are more apt to stay sheltered. Depending on the state in which they reside, the ability to go about, shop, and dine out may continue to fluctuate. In order for your business to adapt, you could increase the ways your services or products are offered to generate more demand. People may not be venturing out, so you might bring your product to them by means of a delivery method. However, updated logistics may need more people to get the job done. Is there an opportunity to reprioritize your current team?
- Are there any new regulations or laws being passed?
It’s important to keep a pulse on current laws and regulations that can directly affect your business. COVID-19 has thrown a wrench into how every company is operating. Checking the Center for Disease Control and OSHA websites will keep you informed of not only the conditions your employees must work under, but how many patrons are allowed in your establishment, if at all.
This global pandemic has been especially tough on the hospitality and tourism industries. As Forbes.com reported, in order to help make up for the deficit, there is a proposal for an “American Tax Rebate and Incentive Program Act.” This legislation will give Americans tax credit to be used toward domestic travel and will directly help boost the hotels, restaurants and entertainment sectors. For example, if you’re a resort anticipating more travelers, you’ll need to make sure you hire or have enough staff to book rooms, adhere to the cleaning regulations, and provide exceptional service under the new regulations. How will these mandates affect your day-to-day operations? When a law is being voted on that will potentially lead to an increase in the demand of your company, it’s time to adjust your team accordingly.
- What’s your competition up to?
Focusing on running your own company is just as critical as keeping an eye on your competitors. Are they promoting a new menu item? Have they found ways to continue to be profitable during tough times? Do they have locations that are permanently closing? Being in the know of their current operations not only helps your company avoid making the same mistakes, but allows you to adjust your business strategy accordingly. For example, if their chain of coffee shops are closing at 6 p.m., you might find it profitable to keep your doors open for an extra hour or two. Modified planning by your competitors may very well turn into opportunities for you if you act quickly.
- How is your company really doing?
Looking within your company is key to making the proper operational adjustments and protecting your bottom line. When it comes to HR demand forecasting, Sonja Kukreja of ManagementStudyHQ.com reiterates the importance of not only looking at external factors but taking into consideration a number of internal factors such as organizational structure, budget constraints, and production levels. If there is a budget cut to a department, start by trying to get creative with the current roles of employees before jumping immediately to downsizing. Is there an area in the company that could use more attention? If you do need to downsize, is there an agency you can freelance with in the interim? Taking the time to assess your staff, gauging their individual strengths and weaknesses, can help you prepare for the unknown fluctuations of demand.
While you can’t control all the variables that affect demand, finding answers and asking new questions will help you better plan your staffing needs. These can help you be prepared to not only survive the tough times but ready to handle an influx in demand—like a crowd of customers at your corner restaurant—any day of the week.