Trend analysis is the process of collecting and analyzing data about the past marketplace and workforce changes to predict what the future might bring.
It is not a crystal ball, but a forecasting tool that can help an HR department estimate the qualities of the employee lineup the company will need in the future. Let’s have a closer look at why trend analysis is so valuable for HR and which types of data it uses:
Analyzing Workforce Demographics
Collecting workforce demographic information is the important first step of trend analysis. Knowing the age, gender, education, and skills of current employees allows HR to make predictions that will influence how the company responds to the market in the future.
Performing Supply and Demand Analysis
Supply analysis will focus on estimating the competencies of an organization and its workforce. Doing so will uncover turnover and retirement trends, which is where some HR issues will likely be uncovered. For example, an analysis may find an increased percentage of employees who may choose to retire early, thus decreasing the supply of experienced middle managers or heads of departments.
On the other hand, demand analysis will help HR estimate how the labor supply will respond to the needs of the company in the future, and how the company will meet the needs of the market. Knowing whether the workload will increase or decrease and whether work processes will be more or less complicated will determine the strategy of the company moving forward.
It is almost a given that technology will lead to complete automatization of some sections of the labor market. Each company must analyze the likely future situation in their industry to interpret the data they have correctly.
Running Gap and Solution Analysis
Performing gap analysis is likely to uncover gaps between what the company’s current workforce can offer, and the workforce needed to meet the future demands of the market. The necessary number of employees isn’t the only factor that can be determined here. Gap analysis also covers skill gaps and age gaps.
When all of the analyses are complete, the final step is to develop a solution for future staffing issues that may arise, or opportunities to capitalize. If the supply is bigger than the future demand, or if the demand will be greater than what the company can provide at the current turnover rate, the HR department must adjust hiring practices for all gaps that may develop.
HR professionals must avoid hiring practices that lead to understaffing, which puts more pressure put on current employees. Also, they should prevent overstaffing, which would drain company funds.
How Data Affects Trend Analysis
Relying on trend analysis allows HR to make a data-based, detailed hiring strategy that is more likely to benefit the company than a strategy based on the subjective judgment of HR managers.
Having quality data in your HR systems will make a huge difference when performing any trend analysis. With Runner EDQ’s software integration solutions that provide enterprise data quality such as CLEAN_Employee, the job becomes much easier for the HR department. What’s more, it ensures that your trend analysis predictions will be more accurate than ever.