By Rami Ali, Sr. Product Marketing Manager
For many organizations, their workforce is the largest expense on their income statement, which is why hiring and staffing decisions should be approached carefully. Given the level of complexity and organizational impact, organizations need to not only make sure workforce planning is done right but that it’s a continuous process.
Here are four best practices for conquering your workforce planning process.
1. Gain visibility into your current workforce
Capturing a comprehensive picture of the current and future state of your headcount is difficult due to the dynamic nature of the data. People will get hired and roles will change. And if you try to use spreadsheets, the data will likely be out-of-date by the time you finish your analysis. Your HRMS system won’t have all the data you need. Decision makers need more, such as financial information and contingent labor. Without it, you won’t be able to develop a dependable workforce planning model. For many HR practitioners, having a real-time view of their headcount KPIs is a major benefit.
2. Implement a continuous workforce planning process
Workforce planning needs to be continuous if you want it to be successful. Once you have built your workforce strategy and started implementing it, the job isn’t done. A lot of organizations fail because they complete this exercise on an annual basis, rather than frequently updating the plan. Your workforce will change over time, regardless of what you do. People will leave, others will get promoted or retire. Market conditions such as economic, demographic, and competitive factors also affect your organization’s workforce planning requirements. Strive to record all changes. For example, keeping accurate records of staff training can help determine who is the best fit in various areas and be able to support other departments. Hiring managers should be empowered to keep track of their own teams, reporting back to finance the details every few weeks or months. After you set the groundwork, regularly updating these plans will seem more reasonable. It all comes down to sharing the workload and staying aligned with your business goals.
3. Integrate workforce planning with corporate strategy
Integrated workforce planning — where finance, HR and other business unit leaders all share one source of data — is most powerful with an integrated hiring and recruiting plan. When it’s done in spreadsheets, this is where the confusion begins. Unless you have direct links from your workforce gap analysis to your approved hiring plan, and to specific headcount plans for recruiters, it quickly becomes a difficult task to keep all key stakeholders aligned on who needs to be recruited/hired, and when.
Integrated workforce planning removes much of that confusion and frustration for HR leaders by allowing them to plan their workforce in sync with all other business plans — corporate strategy, financials, operations, departmental budgets and forecasts. This creates a comprehensive and dynamic workforce plan that is in sync with strategic corporate goals. And ultimately, it helps department managers transition from tactical headcount planning to more strategic workforce planning that puts the right people in the right place at the right time. For NetSuite customers, their finance teams often start the process alongside the HR teams, which supplies finance with critical information on the entire workforce. The workforce plan, integrated with the budget, revenue forecasts and corporate financial plan, helps finance determine where to expand next and when, how to staff new locations and what practice areas to grow.
4. Harnessing the power of scenario planning
All organizations need to plan for major changes, such as an office expansion or acquisition, and be able to react to changing market conditions. Scenario planning allows HR and finance leaders to model various what-if scenarios based on an array of potential outcomes. The types of workforce planning scenarios can range from modeling immediate needs to understanding the long-term implications of hiring, outsourcing, supporting remote workers and more. Forward-thinking organizations develop workforce plans for multiple situations, whether it involves no growth, slow growth or rapid growth. This will help department managers, HR and finance understand the range of possibilities so they can prepare for cost challenges and develop plans for different possible situations.
NetSuite Planning and Budgeting for Workforce Planning brings HR, payroll and finance together in one solution, modeling headcount and related expenses, and providing a reliable source of real-time information about workforce expenses.
More specifically, NetSuite Planning and Budgeting helps businesses with workforce planning by:
- Improving collaboration on plans across HR, finance and operations, connecting data from HCM, GL and other sources into one central repository.
- Reducing your risk of errors by automatically importing personnel rosters from NetSuite, such as employee, job-type and compensation.
- Calculating workforce-related expenses, including headcount, salary, taxes and fixed fringe benefits.
- Offering what-if labor analysis capabilities that includes salary, bonus, raise and equity compensation pool scenarios across business units.
- Providing drill-through from summary values to underlying detailed data.
- Tracking total headcount and new hires across subsidiaries, departments and other segments.
- Allowing for greater control around access to sensitive data or metrics related to personnel.
- Managing workforce planning pre-built forms and drivers with Smart View for Microsoft Office.