From defining your timeframe to running scenario models, learn how to build a data-driven forecast that accurately predicts talent demand and identifies skills gaps.
Patrick Evenden
Head of Thought Leadership, EMEA
Workday
Workforce forecasting is the practice of using data and predictive analytics to anticipate future staffing needs. It enables organisations to determine how the people and skills they'll need to meet business goals over time.
By connecting strategic workforce planning with larger financial and operational plans, forecasting allows HR leaders to align talent strategies with the realities of growth and change happening for the business.
The need for accurate workforce planning and forecasting has never been greater because the talent landscape is showing unprecedented challenges. According to the Workday Global Workforce Report, 75% of industries saw an increase in voluntary turnover among high-potential employees this year.
Separate research from SHRM found that 7 in 10 organisations still report hiring difficulties years out from the post-pandemic high.
When leaders have a clear view into the capacity of their current workforce and its future needs, they can make proactive decisions about hiring, talent development, and resource allocation that drive greater stability even when challenges arise.
Effective workforce forecasting requires a clear structure that connects business goals, data, and decision-making. The following eight steps outline how to build a forecast that accurately predicts staffing needs and gives leaders confidence in their workforce plans.
Start by clarifying what the workforce forecast will inform. Identify the specific decision at stake—such as how to staff a new location or support a major product launch—and determine the timeframe it will cover.
A short-term forecast might guide quarterly hiring, while a long-term view can support three-year growth planning. This clarity keeps the forecast aligned with measurable business goals instead of becoming a generic headcount exercise.
Collect workforce and business data that may impact staffing needs, such as headcount trends, turnover, hiring rates, and performance results. Include projections from finance and operations, such as revenue or production goals, to stay aligned with wider business plans.
Standardise job titles, departments, and date formats so data from different systems can be compared easily. A single, consistent dataset forms the foundation for accurate forecasting and makes modeling outcomes more reliable.
Once you’ve identified the relevant business goals, you need to translate them into future workforce requirements. Use resources like growth targets, project plans, sales forecasts, or market trends to estimate how many people and which roles will be required.
For example: If revenue is projected to rise 20%, model how that increase translates to new sales, customer support, or engineering positions. Document assumptions behind each driver so they can be reviewed later.
A single, consistent dataset forms the foundation for accurate forecasting and makes modeling outcomes more reliable.
4. Build the Supply Forecast
Next, evaluate how your existing workforce may change over time. Include expected retirements, attrition, promotions, and internal moves.
Compare the demand and supply forecasts to pinpoint where shortages or surpluses are likely. Without this point of comparison, you’re likely to overlook something critical. Look for patterns across departments, locations, and roles.
Predicting the future is never easy, which is why it’s important to build several “what-if” versions of the forecast. Model optimistic, conservative, and baseline outcomes by adjusting key assumptions such as growth rates, turnover, or hiring timelines.
Scenario planning helps leaders understand the risks of over- or under-staffing and prepares the organisation to pivot quickly when market conditions change.
Accurate workforce forecasting is only useful if you can turn the insights into a concrete plan. For each potential gap in your staff, outline specific actions such as new hires, reskilling programs, or internal transfers.
Align the plan with financial budgets and operational milestones so execution is realistic. The goal in this step is to connect forecasts directly to hiring, development, and retention activities.
Forecasting works best as a continuous feedback loop. Establish a review schedule—monthly, quarterly, or biannually—to compare actual results with projections. Capture lessons learned, refine assumptions, and update models to reflect current data.
Over time, this habit improves accuracy and makes workforce forecasting a core part of business planning. By following these steps precisely, workforce forecasting helps organisations ensure they’re prepared for all possible outcomes.
Teams that balance advanced capabilities with human judgment at the center of workforce planning are best positioned for success.
Modern workforce forecasting depends on solutions that make complex data both usable and predictive. These tools extend far beyond simple reporting—they help organisations connect disparate data sources, reveal future talent needs, and model how business changes will affect staffing levels in real time.
Learn how each of the following technologies are shaping next-generation forecasting:
Artificial intelligence and machine learning: Use historical and live data analysis to predict where gaps are likely to emerge and which factors most influence hiring outcomes
Predictive analytics: Model how future business activity will affect talent demand, helping leaders understand the downstream impact of strategic decisions
Automation: Keep forecasts accurate by continuously updating inputs and outputs without manual intervention
Natural language processing (NLP): Turn open-ended employee feedback into measurable indicators of engagement or attrition risk
Integrated workforce platforms: Systems like Workday combine all workforce data in one place, providing real-time visibility and coordination across planning functions
When these capabilities work together, forecasting becomes more adaptive and strategic. Organisations using them effectively are seeing its impact, experiencing higher levels of success and satisfaction as well as 10% higher performance speed.
And while HR team members, as governance leaders, are right to approach new technologies with care, the evidence is clear: Teams that balance advanced capabilities with human judgment at the center of workforce planning are best positioned to reap the benefits of workforce forecasting.
Over half of business leaders are concerned about talent shortages—and only 32% are confident their organisation has the skills needed for success. See how AI is transforming skills management in this report.
Guide
In the past decade HR has undergone a major evoluton from a supportive role to a strategic one. However, as this report finds, HR teams are more conservative on AI than finance and IT. That makes the potential competitive advantage even greater—learn more below.