Having too few, or too many, staff can have negative financial, service and productivity implications – affecting both an organisation and its employees.

Hiring excess staff can result in superfluous wage pay outs as well as inefficiencies. It also denies all employees sufficient opportunities for growth and development and is the root cause of interpersonal clashes.

On the other hand, staff shortages add to the workload of existing employees and pushes them to put in overtime which can lead to low morale, loss of productivity, burn-out and absenteeism.

These factors cost an organisation, both financially and in terms of time and reputation as they may be required to pay excessive overtime to existing staff or spend time and effort in searching for a last minute replacement for staff who were unable to handle the pressure. Such situations also often have a knock-on effect in terms of service provided to existing client who may then feel the organisation is unreliable.

Assessing staffing requirements depends on accurately anticipating future demand for workforce levels. This is an essential consideration in order to ensure that you meet the goals of your business and customer expectations whilst maintaining quality.

Factors that affect demand for employees include business volumes, marketing campaigns, and competitor offerings. Additional factors include the business climate and a country’s economic outlook. While these factors are out of our control, they will affect businesses.

There are things that organisations can do to ensure that they are equipped to handle any eventuality with the appropriate size workforce available.

Suggestions include:

• Determining where you would like your organisation to be in the next three to five years: This will enable you to map where you are, where you are going and how you plan to get there along with goals you will need to meet along the way. It will also give you a better understanding of your organisation’s human resource needs.

• Performing a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis of the organisation: Look at the attributes of the organisation that assist in achieving the abovementioned goals and consider those that are detrimental to realising goals. Explore external conditions that are helpful to attaining goals and those that are potentially damaging. These should include changing customer expectations, new legislation, fluctuations in the national and world economy, employment trends and staff expectations.

• Developing a profile of the current workforce and projecting workforce supply: Assess the current supply of human capital in your organisation and factor in variables such as retirements, resignations and transfers. Consider any business changes that you assume will occur and which could impact your workforce needs. This information will help you determine future staffing requirements in line with demand for your services.

• Identifying the current and future work functions necessary for achieving goals: Things to consider include those functions that will change, be discontinued or introduced.

• Reviewing competencies required to meet business outcomes: Focus on defining the competencies (skills, knowledge, abilities, and personal attributes) that your staff should possess to successfully perform the functions identified above. This will assist you in correctly briefing your staffing provider in terms of your staffing requirements.

• Comparing the supply and competencies of current staff with the anticipated staffing levels and attributes: Assess your existing staff to uncover any gaps in the size of the workforce and competencies necessary for accomplishing current and future functions. Based on these gaps, you can figure out whether your recruitment methods match your priorities and if you have sufficient training or knowledge transfer methods available to develop these competencies.

• Determining the most critical future workforce gaps and developing solutions: Prioritise the areas where you have the most pressing needs so you can continue to meet your goals and critical business outcomes whilst targeting recruitment and retention efforts to specific levels of staff that possess the right knowledge, skills, and abilities.

Knowing the direction in which your business is headed, together with having an appropriately sized and skilled workforce to get there, will benefit both your organisation and staff.

Kay Vittee is the CEO of Kelly.