How to Effectively Manage Your Workforce Through Changing Levels of Demand 

Managing a shift-based workforce can be a challenge, but with the right demand planning software in place, it doesn't have to be.

To quote Ariana Korman, the Chief Operating Officer of Juice Press, "We have saved over $200,000 a year on front-of-house labour just by being able to manage it better and being able to put the right people in the right places."

In this Q&A interview, Deputy's Senior Solutions Expert, Steve Woods, talks you through how to forecast labour demand in your business and ensure you have the right number of staff on each shift — so your business can stay as cost-efficient as possible.

First off, what is labour demand planning?

Demand planning tools are all about helping businesses better allocate labour and adapt to changing levels of demand throughout their organisation. Essentially, demand planning software helps you make sure you've got the right number of employees working the right roles at the right time.

If you imagine a hospitality business, they've got traditional peaks and valleys in demand throughout the course of the day: breakfast, lunch, and dinner. Demand planning software is about ensuring you’ve got just the right level of labour on hand during those different periods of the day. 

Effective demand forecasting tools bring together different data points in one place, such as sales data and foot traffic, to build an accurate labour demand forecast. 

Advanced labour forecasting software like Deputy also does things like analyse local events and seasonality, time of year, whether it's school holidays, et cetera to forecast the total number of orders or sales a business might have per hour, per day into the future. That’s the kind of labour demand forecasting that will build you a really accurate picture of how many staff you need at different times, no matter what life throws your way.

What are the major challenges in getting labour demand planning right?

The first challenge in labour demand planning is getting a level of accuracy in your demand forecasting. Put simply, before you can plan out the perfect staffing for your business, you need a clear view of the demand that’s coming your way in the future. Your demand planning tool needs to provide a valid level of predictability on what's coming down the track for your organisation.

Then, when we've got the demand forecast in place, the next challenge is looking at how to build relevant labour models. That’s when you work out how much labour, how many staff, you need to match those ups and downs on the demand forecast.

So let's say that my demand forecast tells me I've got 100 orders coming up for breakfast, 200 orders for lunch, and 300 orders for dinner. If that's the case, then how do I gradually ramp up my labour throughout the course of the day to match that demand? How do I know how many employees I should have working for the number of orders that are coming through the organisation? How do I map the forecast that I've so meticulously created to the actual labour requirements that I've got in the organisation itself? 

With labour forecasting software like Deputy, we look at things like the number of employees you need working versus the number of orders or sales coming into the organisation per hour, per day. Then we can set floors and ceilings around that as well. For example, you might want to set a minimum requirement for kitchen staff at one and a maximum of five — after all, only so many people can fit in the kitchen, no matter how many orders are coming in.

What makes an optimal labour demand plan?

After we’ve gone through the process above, there's lots of different work we can do to create different labour models for different parts of an organisation. When those labour models are run, they provide businesses with a labour demand forecast of their staffing levels. 

So in the restaurant scenario above, we've gone from a forecast on the number of orders coming into the business to a plan for the number of employees that we need working in different roles in different departments per hour, per day. 

And the important thing to mention is that even when you have that, it's still not the end of labour demand planning. If I've got a labour demand forecast that says I should have five employees working at 9 am and eight employees working at 12 pm, then I can achieve that with a variety of different shift types, shift durations, and shift start and end times.

But what's the optimal shift pattern that's going to help me allocate my employees in the most effective way? 

For our demand planning software to create truly efficient labour demand forecasts and employee schedules to match, we work with clients to better understand the different types of shift lengths required and when shifts should start. 

We combine this with labour demand forecasts on required labour levels to create optimised shift patterns. The final stage is then automatically allocating the right employee to the right shift. To do this, we look at their qualifications, availability, whether or not they're on leave, and any other custom requirements that might influence the shifts you want your employees to work.

What’s the level of accuracy for shift pattern creation?

The more precisely we can forecast, the more accurate everything becomes further downstream in the process. Which is why, when we work with clients, we always start with forecasting. It’s key to generate accurate forecasts for core demand drivers (e.g. sales data or foot traffic) that take into account variables such as seasonality, weather, or local events. Pattern creation accuracy depends on the parameters that a customer puts in.

What role does your industry play in accurate labour forecasting and demand planning?

The labour demand forecast our software creates is very dependent on the industry. For a care home, we're forecasting against occupancy levels, and for a hospitality organisation, we tend to forecast against things like the number of orders coming in or foot traffic.  

What are the most common misconceptions managers have about automated demand planning software?

So when we talk about demand planning tools in general, there can be a bit of confusion in the market.

One common misconception is assuming technologies such as AI and machine learning are there to take over the role of labour demand planning entirely. AI is incredibly good at prediction, and the more inputs we provide, the more accurate those predictions can be. 

What it lacks, however, is a manager’s ability to rationalise, adjust, and course-correct to changing events on the ground. It can't reason like a human can.

What is the most useful way to use automation in labour forecasting and demand planning?

Here at Deputy, when we talk about labour demand forecasting software and automation, we use the term ‘assistive intelligence’. 

When it comes to efficiently forecasting labour demand, it's not about businesses handing over everything to an automated process, because there are still things that managers on the ground are going to need to do. 

Instead, it’s about a relationship between automating the more transactional parts of labour demand forecasting, then relying on the institutional knowledge that managers have to refine and tweak the recommendations that the demand planning software is making. 

So together with our partners, Deputy’s demand forecasting and planning tools are automating 70% of the manual, tedious work, but we're still relying on the vast experience of managers to complete the process.

To summarise, what’s the best way managers can effectively manage their workforce through changing levels of demand?

Having the right labour forecasting and demand planning tools in place — that can marry up changing levels of demand to different labour requirements and availability — is key. 

Labour is the highest cost for many businesses. Without real clear visibility on what's driving that cost, it becomes very difficult to plan for changing levels of demand and increasingly expensive to both sustain and scale your operations.

If you're interested in efficiently reducing labour costs and ensuring optimal coverage across your business, check out our labour forecasting and demand planning software today, or book a demo to see Deputy in action!