What Is Trend Analysis Used for in HR?

by Vanessa Cross; Updated September 26, 2017
Business woman leading a team

Trend analysis involves collecting and evaluating data to identify patterns of information that might affect the future. An assortment of factors affects human resources needs, including supply and demand changes within markets and industries, as well as changes in work processes and procedures. Human resources professionals study employment data to predict and anticipate changes based on historical patterns to develop strategies to continue to meet market needs.

Workforce Demographics

Workforce demographic information comes from data such as job classifications, turnover rates, retirement eligibility, education, skills, age, gender, race and the national origin of the workforce. This type of information is used by human resources professionals to perform supply analysis, demand analysis, gap analysis and solution analysis when evaluating workforce trends.

Supply Analysis

Supply analysis involves evaluating the competencies of an organization and assessing its workforce demographics to assess its labor supply. Trend analysis uses formal forecasting techniques, such as time series analysis, that help professionals to evaluate HR issues such as how turnover might affect the workforce if the company takes no action.

Demand Analysis

Trend analysis also involves assessing likely changes in the type and quantity of work and workforce processes that will be demanded in the market. Demand analysis measures future workload activities against existing workforce competencies to meet future demands. Technology, as an example, has had a significant affect on reducing work performance and processes and plays an important part in the demand analysis process.

Gap Analysis

Gap analysis compares workforce supply against workforce demand trends to identify the gaps in a company's competency. Here, the capacity of a company to meet future staffing requirements might be assessed by a human resources department. Gap analysis helps to identify when existing personnel or firm competencies will not meet future needs or when a firm's workforce supply exceeds anticipated demand trends.

Solution Analysis

The solution analysis phase is an important part of trend analysis. When workforce demand exceeds supply or supply exceeds demand, a firm can develop HR strategies to close gaps. In anticipating demand growth trends, for example, HR professionals can institute recruiting efforts. When changes in technology are anticipated to have a significant impact on business processes, HR professionals can institute retraining efforts. In essence, trend analysis provides valuable tools to HR professionals who need to respond to changes in workforce demographics as well as general market changes.

About the Author

Vanessa Cross has practiced law in Tennessee and lectured as an adjunct professor on law and business topics. She has also contributed as a business writer to news publications, including the "Chicago Tribune," and published in peer-reviewed academic journals. Cross holds a B.A. in journalism, a Juris Doctor and an LL.M. in international business law.

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