Posted by Paul McDonald on Friday, October 7, 2016 - 08:30 | Follow me
It’s business planning season, and employers are trying to determine how much staff and budget they’ll need to meet their goals for the coming year. But without a crystal ball, projecting future hiring needs is tough. I have some tips that can help you create a smart staffing plan and thoughts on the newest jobs report that may help inform your decisions.
The U.S. economy saw job gains of 156,000 in September, according to the Bureau of Labor Statistics (BLS), the smallest monthly gain since May. Revised numbers for August and July show that 7,000 fewer jobs were added than previously reported. Based on the updated data, employers have created more than 1.6 million new positions since the start of 2016 — or about 178,000 jobs per month, on average.
According to the BLS, employment in professional and business services increased by 67,000 jobs in September and has risen by 582,000 over the past year.
Healthcare also continues to add jobs. September saw 33,000 new positions created in this industry. Over the past 12 months, healthcare employers have increased employment by 445,000 jobs.
The national unemployment rate edged up slightly to 5.0 percent last month, after holding steady at 4.9 percent in June, July and August. Meanwhile, the unemployment rate for college-degreed workers who are 25 or older — those in greatest demand by employers — was exactly half the national rate in September: 2.5 percent.
Creating your staffing plan
Because now is the time when employers are starting to set budgets for the coming year, they pay closer attention to the monthly jobs report. And for good reason: Any signs that might indicate changes in business or economic conditions can help them decide how their workforce should grow or contract in the new year, if at all.
Assessing your firm’s staffing plan for the coming year begins by answering one question: Do you have an adequate number of workers currently in place to achieve your objectives, at least over the near term?
This is much more than a simple yes-or-no question, though. Let me explain, using two scenarios.
Scenario #1: You are fully staffed
Even if you feel you already have enough employees to meet your business goals for the coming year, and your staffing plan is complete, you still have a few more things to consider. And not accounting for them could spell disaster.
More than anything, you need to ask yourself these follow-up questions to ensure your staffing plan will help move your business forward in the months ahead:
- How quickly can you adjust to unforeseen staffing challenges? Even though you may have enough people on hand to support the plans you’re making for next year, what would happen if business conditions or priorities change in 2017? What if a critical team member — or worse, multiple key players — suddenly left the organization? In today’s employment market, that’s well within the realm of possibility. According to the BLS, 3 million people quit their jobs in July. That’s the second-highest total in the past nine years and indicates a willingness on the part of workers to search for greener pastures.
- Do you have the right skills in the right places? Just because you have the right number of people doesn’t mean you have them focused on the right projects. What are your business goals for 2017, and what portion of your team is working to achieve each one? Roughly speaking, the more important the goal, the more people you should have dedicated to meeting it. Prepare yourself now for the possibility that you may need to reallocate members of your team — or bring in new workers if your staff lack key skills to support changed business priorities.
Given these realities, I recommend setting aside a portion of the 2017 budget you’re creating for unplanned hiring needs. I’d also suggest establishing a relationship with a reputable recruiter in your area who can help you locate skilled professionals should you have an immediate need. A good one can help you react to a staffing shortfall more quickly than you could on your own.
Scenario #2: You plan to hire in the year ahead
If, on the other hand, you don’t have enough people or the right skill sets in-house to achieve your business objectives in the new year, you’ve got a little more work to do in formulating a realistic staffing plan. In particular, you need to ask yourself several key questions, including:
- How quickly do you need to hire? Skilled candidates are in demand, and it can take several weeks to find the right hire. If you’re in a geographic location where competition for talent is fierce, it might take even longer. So, you might need to start your candidate search right away, especially if you need to have these additional team members in place by early 2017.
- How quickly can you hire? A key step in setting your staffing plan is making sure all stakeholders understand the hiring priorities and have agreed on key details, such as the number of people you plan to hire, salary ranges, start dates and the like. Start preparing now. Getting these particulars ironed out early on will make the hiring process go more smoothly and increase your chances of success.
- What factors could make it difficult for you to hire? Be aware of anything that could make hiring even more challenging — or near impossible. Start with the employment market in your area. How deep is the pool of candidates you seek? What is the demand for these professionals? Also, think about your job offers. Your firm must be prepared to offer compensation that is at least on par with what competitors and peers are providing to top candidates.
- Should you adjust your priorities? Consider postponing any initiatives that aren’t imperative, at least until you’re confident that your business is truly prepared, from a staffing perspective, to take them on.
My point with all this is that it takes a great deal of thought and effort to put together a staffing plan, even if you think you don’t need one. It’s worth the work. Really understanding where your business is at today in terms of its staffing strength provides a foundation for determining where it needs to be in the near future — and allows for you to withstand the unexpected.
Don’t slow your hiring efforts now
One more thing to keep in mind: Many employers slow their hiring efforts in the fourth quarter, assuming the job is more difficult now and that they can restart the process after the beginning of the year. Now is not the time to tap the brakes.
There is a shortage of skilled professionals, and those who are looking for employment do not remain available for long. In addition, our research shows that it can take several weeks for employers to make a hire at either the staff or management level. So, if you need to secure in-demand talent for your team — whether it’s to achieve key objectives by the end of 2016, embark on new initiatives in early 2017 or both — you must continue to move quickly and recruit aggressively.