Today, I'm sharing insights on forecasting in resource management. Forecasting is one of the most interesting and challenging aspects of resource management. Certain aspects of supply and demand will always be unpredictable, and that's especially true in the accounting industry. Forecasting is about anticipating future needs, like using a crystal ball to see into the future and prepare for what's coming.  

The importance of time and demand 

The first step in forecasting involves defining a time period aligned with your fiscal year, which could vary depending on the firm. Aligning your forecasting with your firm's fiscal cycle holds several benefits, including synchronization with your yearly operational cycles and budget planning for hiring.  

Once the time period has been defined, getting a clear picture of demand is crucial. In accounting, despite the complexities, the industry's seasonality and historical data can simplify demand forecasting. This involves analyzing previous years' data to predict the upcoming fiscal year's requirements and considering the scope of work needed. It's always beneficial for forecasting to be done several months in advance, with a quick refresh at the start of the fiscal year to tie up loose ends. 

When assessing demand, consider recurring work, potential changes in scope, and the possibility of new or lost work. It's important to distinguish the annual workload and the fluctuations throughout the year; peaks and valleys that vary by industry and client needs. Different industries within the audit space, like healthcare or asset management, may experience peak times outside the traditional busy season, affecting workload distribution and staffing needs. 

When assessing demand, consider recurring work, potential changes in scope, and the possibility of new or lost work. It's important to distinguish the annual workload, the fluctuations throughout the year, and the peaks and valleys that vary by industry and client needs. Different industries within the audit space, like healthcare or asset management, may experience peak times outside the traditional busy season, affecting workload distribution and staffing need. 

Operational insights 

After considering the holistic year and quarterly perspective and establishing a demand forecast, the next step is integrating operational insights. This includes educated assumptions about factors like attrition, headcount, and what can be expected in the coming months, which are influenced by market trends and internal organizational dynamics. Understanding these elements helps in planning for both immediate and future staffing requirements. Another factor to consider is the natural career progression of your staff, including promotions and changing role expectations, which can significantly affect your resource needs. 

Seasonal staffing 

Now that you understand expected work and staffing dynamics, you can analyze your workforce supply to identify potential surpluses or shortages. This quarterly analysis helps you adjust recruitment strategies and operational planning effectively.  

Forecasting and identifying the need for specific skill sets or roles as and when they're needed throughout the year allows you to create targeted recruitment strategies that align with both immediate needs and long-term organizational goals.  

Recognizing when supplemental staffing is necessary due to seasonal peaks is crucial, as is considering variable workforce solutions as a flexible option to supplement and complement temporary increases in workload without overstaffing during slower periods and having staff with nothing to do.  

Pipeline and campus recruitment 

Forecasting should also account for pipeline strength and a keen sense of what's in the pipeline, and, of course, a successful communication strategy around that to ensure it syncs with the hiring numbers and forecast from a headcount perspective. Another element to account for is campus recruitment, often done well in advance, so it requires you to balance immediate delivery capabilities with the development of future leadership.  

Finally, it would help if you decided on the appropriate buffers to ensure your team isn't too lean during peak times while offering development opportunities and aligning staff with engaging projects, 

Forecasting is more than just an anticipatory tool or a crystal ball to see the future; it's a strategic compass guiding us through the unpredictability of supply and demand in accounting. With a solid forecasting framework, you'll be prepared for the expected ebbs and flows of the fiscal year, and your firm will be positioned to adapt to unforeseen challenges and opportunities swiftly. By embracing the complexities of our field and continually refining your forecasting techniques, you'll be creating not just room for growth but a foundation for sustained success and stability in a constantly evolving market.  

ABOUT CHRISTINE ROBINSON  

Christine Robinson is a Makosi Advisory Board Member. She’s a resource management expert, strategic advisor, award-winning speaker, author, and the mother/stepmother of six.