As people and culture leaders and business partners, workforce planning is a major part of our role. Workforce planning and data-driven decision-making are our top priorities, especially if we are in the middle of hyper-growth and anticipating significant changes in our workforce. Annual business plans are based on expected growth and changes to our human capital (a.k.a. recruitment and retention). It is indeed the backbone of our HR strategy.
As business partners, people and culture teams strive to narrow the gaps between the number of employees we have, their capabilities (skills and experience), and the company’s business goals.
Considering the current economic waves and peaks we’re experiencing, planning our workforce is becoming even more important. On the one hand, we want to make sure we are not over-recruiting. On the other hand, we want to support business growth by giving our customers the resources they need.
Sounds like an easy task, right? We just need to understand the business trajectory and crunch the numbers. I wish it were that easy.
We need to consider many variables when building our workforce plan, including the over- and under-achievements of the Sales department, acquisitions, additions to the product roadmap, changing attrition rates, the availability of the talent we need in the market, challenges within specific geos, and more.
Approach workforce planning as a cross-organizational team
In most organizations, the People and Culture department is typically responsible for co-leading workforce planning with Finance. We must always keep in mind that strong collaboration leads to a more accurate workforce plan. Involving key stakeholders from the beginning (such as business champions and finance leaders) in the workforce planning process is crucial to its success.
HR and Finance combine into a power couple of knowledge and business insights. Other members of senior management might be involved, as well: FP&A managers and business leaders (such as the CFO, COO, and CRO) who are responsible for organizational strategy.
Working together to anticipate business needs
Together, we must evaluate our workforce plan’s ability to adjust and respond to the business’s future needs. This allows the organization to make and execute critical business decisions on time. But, the key word here is TOGETHER. We are not alone in this process.
As people leaders and business partners, developing good relationships, processes, and routines with the finance champion is crucial for the success of our work. Ours is the partnership that drives the budget behind workforce planning.
It definitely takes a joint effort to align the financial and strategic needs of the business (e.g., expanding into new geographies, future acquisitions, etc.) with human capital needs like promotions and succession planning, anticipated attrition, and more.
Adopt a resilient, long-term strategy
One of the biggest challenges facing organizations today is the skills gap in the labor force. With fast technological advances and changes across every industry, the only way to ensure our organizations thrive today and in the future is to identify existing skills gaps and anticipate the skills our people will require tomorrow.
It’s important to identify these gaps before recruiting and training so we can address them before our people (and our businesses) fall behind.
These six elements are critical to the success of every workforce planning strategy:
1. Grow business functions
As businesses grow, they require new functions smaller organizations never needed before. It’s critical to understand the business’s future needs and prepare for this growth.
For example, smaller companies may only need to recruit more traditional roles in the customer success organization (e.g., implementation managers and support professionals). But as the business grows, it needs to find people with the skills and experience to lead business partnerships, manage enterprise customers, and more.
2. Hire in new geographies
Another top challenge for growing businesses is geo expansion. To properly prepare for opening new sites and hiring in new geographies, we must first hire someone who speaks the language. At the very least, we need to research the market, labor laws, and regulations to recruit people from different cultures and build the foundations of a successful, multi-national business.
3. Prep with high-level headcount planning and precise mapping
To successfully plan the workforce for the next year, HR leaders must account for the company’s natural growth. Headcount planning must always factor in the geo expansion just mentioned, along with the ever-changing needs of a growing organization.
But this is high-level planning. To succeed, we need to precisely identify and map out the organization’s hiring needs and how to address them. It’s always a good idea to create a list of the business’s “hiring needs” and create a plan to address them: It might mean using talent acquisition knowledge tools or enlarging the talent acquisition team to ensure the company has the capacity to address the growing challenges ahead.
4. Open a dialogue with the business
Before you start crunching numbers and laying out a specific plan, it’s crucial to begin with listening and learning.
Conducting an open dialogue with the business (hiring managers, business management, etc.) is the key to achieving excellent and successful workforce planning. Continued listening helps us stay ahead of the business’s changing needs (e.g., people changes, shifts in the market, etc.) and allows us to anticipate future needs (and plan) more accurately.
5. Familiarize yourself with the company’s history
To effectively plan for the future, it’s essential to understand the company’s past. Make it a point to study the company’s trends over time: attrition rate, time to hire, retention, turnover, etc. Understanding the learning curve and ramp-up of sales and CS teams can also help you make the right data-driven decisions when planning for your workforce’s future.
Recommended For Further Reading
6. Be flexible
As John Lennon put it, “Life is what happens to you while you’re busy making other plans.”
The world changes quickly and can make the most amazing workforce plan obsolete. These changes can include growing demand for talent within a particular market and geo, economic waves and peaks, acquisitions, and more.
While it may be difficult to anticipate the exact changes and challenges that might come our way, it’s critical to build agile plans that allow room for change and the ability to pivot fast. But how can we do this?
The best way is to create reasonable numbers of buffers and placeholders before the board approves the overall headcount plan. These placeholders can be crucial if there’s a sudden, unpredictable change (for example, if you find yourself overachieving in a specific market, you’ll want to continue to grow there, and you need a plan you can put into action immediately).
Exceptional workforce planning is the foundation of company success
When done correctly, workforce planning models set companies up for success. They ensure the current workforce aligns with the company’s human capital needs of tomorrow. It enables a company to react and adapt to unpredictable and fast market changes.
Workforce planning is one of the most critical aspects of our work as people and culture leaders. Success requires close alignment and collaboration between business leaders and involves a combination of transactional and strategic modes of thinking.
For us, as people and culture leaders, getting the right people with the right skills in place at the right time is our most important mission–the business depends on us to ensure the success of our organization.
From Cohav Nir
For the last two decades, Cohav Nir, HiBob’s people and culture operations director, has worked in the HR domain across different industries, focusing on talent acquisition, branding, and employee experience. She’s passionate about organizational culture and how HR leaders can contribute and drive a positive culture. When she’s not working, you can find her doing Pilates or out hiking with her family.