Planning for a Company’s Most Valuable Asset—its People

The long-range sales forecast is set, and targets are being communicated throughout the organization. Next on the agenda are costs, margin, and expenses leading to the bottom line. Operating and planning a business is like solving a complex puzzle: an organization can have all the correct pieces for its business but at the end of the day, the right people are required to put it all together. 

And it's not just this year’s puzzle, but one that spans three years, five years, and even 10 years from now. Achieving an organization’s long-term financial targets with a healthy, diverse, and empowered workforce ensures sustained value for the organization.

Adopting a Strategic Approach to Workforce Planning

Your organization’s people drive its revenue and the expenses incurred to generate that revenue. Understanding and modeling for those relationships allow a driver-based connection to be established between them. This connection enables the business to adopt a Connected Planning strategy by integrating HR’s workforce plan with the long-range sales forecast. An agile strategic workforce planning (SWP) solution is needed in order to facilitate this process.

Scenario Planning Enables Proactive Workforce Management

As with any long-term planning solution, assumptions change throughout the year. Having an effective scenario management solution that allows you to easily and quickly develop new scenarios can make an incredible difference in how you manage positive news and mitigate risks during crises.  Lack of agility in scenario modeling causes many organizations to be reactive when managing their workforce during uncertain times. The SWP solution allows for the long-range forecast assumptions to be adjusted by scenario. This empowers management to understand how changes to internal and external factors would impact the P&L. Flexibility to model risks and opportunities via scenario planning enables an organization to be proactive and make insightful decisions as they navigate through any situation.

Covid Financial Impact Analysis Board (1)

Covid Financial Impact Analysis Board (2)

More About Scenario Planning:  

• Scenario Planning in Anaplan, Part I: The Power of 'What If'
• Getting Better at Getting Ready: Scenario Planning for Competitive Advantage

Analyzing & Prioritizing Workforce Diversity

Fostering a diverse and inclusive workforce is a direct enabler of achieving "diversity in thought," and a healthier, more active environment. Ensuring you meet diversity targets is no easy task, and changes do not happen overnight. According to a report from Mercer, “most high-growth organizations understand that HR is a crucial player in spearheading major change initiatives.” Starting off with an in-depth analysis of your current employee mix is essential to developing and delivering real change within the organization. By benchmarking against other industries and peers, you can develop gender and ethnicity targets across regions and build actionable roadmaps. 

Diversity Target Setting Board (Gender Analysis)

Diversity Target Setting Board (Ethnicity Analysis)

Key Drivers Connecting Business Events to Workforce Impacts

The SWP solution digs into the different drivers that have a direct impact on your workforce, such as product certifications, clinical trial results, management ratios, promotion rates, and attrition rates. For example, if the business has seen issues with the quality of its output, the management ratios may be off. To align with the product quality initiative, a product line may need more senior employees to increase the ratio of quality inspectors. The management ratio driver can be adjusted (see figure below), which will increase or decrease your baseline headcount depending on the nature of the ratio change.

Management Ratios

Promotion and Attrition Ratios

Benefits of Connecting HR and Finance

Planning an organization’s workforce while considering internal and external factors may seem like an insurmountable task. Doing so requires the business to adopt a strategic approach that connects the office of the CFO and CHRO. By doing so, you can manage a healthy, diverse, and empowered workforce that is well-positioned to meet your long-term financial targets.

We want to hear what you are looking for in a workforce management solution and what your experience has been. Please leave your thoughts and questions in the comments below.