The Layoff Antidote: How Workforce Analytics Can Prevent Future Downsizing

The fear of layoffs hangs over today’s economic climate. Independent job cuts tracker Layoffs.fyi reports that over 90,000 employees were laid off globally in 2024 alone. This continues a troubling trend from 2023, when nearly 240,000 people lost their jobs.

Several factors are contributing to the current wave of global layoffs: economic uncertainty, technological advancements, over-hiring during boom times, and industry-specific challenges such as slowing growth and waning investor interests.

More and more, businesses are under constant pressure to streamline operations and reduce costs to keep the company in a stable financial position. Unfortunately, this often translates to workforce reductions, leaving employees anxious and destabilizing the company culture.

No CEO takes layoffs lightly. Sometimes, the decision is completely necessary and unavoidable. Other times, with the right foresight, hiring strategy, and workforce data, business leaders can reduce the need for future layoffs.

When you have a clear window into your employees’ capacity, team performance, and attrition risk, you are empowered to make data-driven hiring decisions. That data helps you avoid over-hiring in the wrong departments or during temporary demand surges and can improve employee retention.

Workforce analytics is the key to these data-backed decisions. The powerful solution offers unmatched insight and foresight into your workforce needs, and a lifeline that could minimize the need to cut any jobs. A more stable workplace could be a dashboard away.

Using workforce analytics for strategic staffing

Workforce analytics, also known as people analytics, is the practice of collecting, analyzing, and using employee data to optimize your people strategy. It should be the number one tool in any business leader’s hiring toolbelt.

By leveraging workforce analytics, businesses can move away from reactive hiring (filling open positions as they arise) and embrace proactive, strategic staffing. This reduces the risk of overstaffing during economic booms and ensures the workforce is equipped with the skills needed for future growth.

Workforce analytics can prevent hiring or backfilling unnecessary roles by providing data-driven insights into your current workforce capabilities and future needs. Here’s how:

• Demand Forecasting: Analyze historical data on workloads, team performance, capacity, and attrition to predict future needs for specific departments. This helps avoid hiring for temporary surges in demand that may not be sustainable.
• Skills Gap Analysis: Identify existing skill gaps within your workforce through team performance and productivity analysis. Prioritize hiring based on what’s truly missing. This prevents filling positions with generic candidates when upskilling or reskilling current employees could be a more strategic solution.
• Workforce Capacity Assessment: Analyze team capacity, productivity, and workload distribution to identify areas where current employees can take on additional tasks before adding new hires. This optimizes existing resources and avoids unnecessary headcount increases.
• Performance Management Data: Use data on employee performance to identify opportunities for cross-training or redeployment within the company. This can help address short-term staffing needs without resorting to external hiring.

By leveraging workforce analytics data, a CEO can gain a comprehensive understanding of their current workforce and a crucial advantage: visibility and predictability.

4 more ways workforce analytics reduces the need for layoffs

Beyond preventing over-hiring, workforce analytics solutions offer a toolbox of strategies to reduce the need for layoffs. The data enables business leaders to make informed decisions about their teams that could stabilize their workplace. Strategies include:

• Optimizing Team Composition: Workforce data can reveal how different skillsets work (or collaborate) best together. Analyzing past successes and team dynamics allows for building high-performing teams from the ground up. This reduces redundancies, increases efficiency, and minimizes the risk of needing to downsize due to underperformance.
• Performance Tracking for Scalable Productivity: Humanyze’s workforce analytics solution tracks high-performing teams and compares them to lower-performing teams. This helps companies uncover key behaviors of top-performing managers and teams. Company leadership can then replicate successes across the organization and enable teams to perform more effectively at a greater scale. Improving performance internally and developing current employees reduces the need to hire externally.
• Succession Planning: Tracking team performance and understanding career aspirations allows for proactive planning for future leadership roles and critical positions. Identifying internal talent for succession reduces the need to search for external hires when key positions open up, potentially preventing layoffs due to a lack of qualified internal candidates.
• Retention Strategies: By analyzing data on employee attrition rates and reasons for departures, companies can gain valuable insights into how to improve employee engagement and satisfaction. This can lead to implementing targeted retention strategies like competitive salaries, improved work-life balance, and positive company culture initiatives. A happy and engaged workforce with low turnover minimizes the need for frequent recruitment and onboarding processes, which can be costly and disrupt workflow.

Workforce analytics creates a proactive, forward-looking approach that optimizes talent utilization, fosters a skilled and adaptable workforce, and reduces the likelihood of needing layoffs.

Invest in Data, Invest in Your Workforce through Humanyze

Workforce analytics isn’t just about numbers; it’s about investing in your people. By leveraging data to make informed hiring decisions, businesses can build a future-proof workforce, reduce the need for layoffs, and create a more stable and successful organization.

Humanyze is the leading workforce analytics solution, trusted by Fortune 1000 companies for our unparalleled organizational health insights. Our workforce analytics tools provide a comprehensive view of an organization’s health by leveraging data on employee interactions, collaboration patterns, and workplace behavior.

Humanyze’s new SaaS product offers incomparable visibility into employee capacity, productivity, engagement, and attrition risk. This unique solution — built specifically for C-suite executives and team managers — could be the key to preventing layoffs.

Humanyze supercharges your staffing strategy through AI-powered insights that business leaders can rely on.

A well-planned workforce is a resilient workforce, prepared to weather any economic storm.

Ready to stop the layoff cycle? Enroll in our beta program or book a demo today.