Workforce planning is a journey and not a destination. It is a collaborative process just like any other team activity or sports.
This is more so because of its complexity and any divergence in execution will only lead to the failure of the common objectives of the organisation.
Effective workforce planning is not an individual’s responsibility. It has to be the culmination of efforts from all internal stakeholders especially the Finance and HR functions.
Ian Booth explains in his article for VISIER, ‘Finance has the breadth of expertise that’s required to create a company wide budget.
If you consider the scope of their annual budgeting task within the enterprise.t’s monumental they need to a fiscal plan for the entire organization that takes into account organizational strategy, historical costs, future plans, and their best projections for how local and global economies will perform.
HR workforce planners, in turn, are the team members with the in-depth understanding of talent that’s critical for designing an effective plan.
Their deep, specific insights into personnel and timing requirements complement finance’s strength in painting the broader strokes of the budget. When finance passes the budget to HR, planners in HR need to be poised to use their expertise to deliver the ball to the goal line set by the company.’
HR has deep knowledge about the kind of talent available in the market and which of these talents to acquire and plan retention strategies accordingly for the organization’s growth whereas the Finance’s expertise comes handy in formulating the core of organizational accounts strategy, costs, expenditures and future plans that impact the company’s finances.
This being the case, only a synchronised strategy by HR and finance will create successful workforce planning and deployment.
Effective implementation of this strategy involves three steps broadly. These are Budgeting, Monitoring/Reviewing and Evaluating the Progress respectively.
Budgeting
Finance initiates the process top down by aligning the proposed budget limits with corporate objectives and then the reverses the process- bottom-up, collecting realistic expectations from individual departments and stakeholders.
However, the budget that finance delivers to HR won’t contain information about the types of roles and locations, and specific numbers in each sub sections. Here’s where HR’s workforce planners step in to refine the budget and more accurately allocate the headcount.
HR is the subject matter expert and has close liaison with the operations to understand what roles and skills are needed and what timelines for hiring are realistic. HR will have insights into historic attrition trends, and a macro view of workforce costs, including costs of relocation and recruiting which more often than not is overlooked in budgeting.
Monitoring / reviewing
Once budget is agreed and frozen then comes the process of reviewing. Workforce planners will need to periodically review actual spending against the budget or most recent forecast. This enables to identify any deviation and decide on what action to take to get back on track.
For effective execution of workforce planning, the latest and real time forecasts from finance are to be used for meaningful comparison and corrections thereof.
Evaluation
For any plan to succeed it has to be dynamic and flexible to be able to adapt changes as and when necessitated, hence the close monitoring of the current fiscal situation is very critical.
If finance has provided a new forecast, it would be futile for HR to compare progress against the original budget and for effective implementation changed budgets/forecasts need to be used for fool proof comparison.
Achieving the common goal
Successful corporations have an effective workforce planning process HR and Finance work as a team.
Where finance is managing the costs and HR is managing talent, the two groups in sync can create a workforce plan that brings together the right talent at the right time and budget to meet the overall objectives of the company.
