How to Keep HR and Finance in Sync on Workforce Planning

In the NFL, skilled wide receivers are often the star players on their teams. Mention Jerry Rice, Randy Moss, or Terrell Owens, and there’s a good chance that even people who don’t normally follow football will recognize their names.

Wide receivers are known for their speed – with 40-yard-dash times that compare well to track athletes. By definition, their role is to catch the football when the quarterback throws it. Before the catch, the receiver typically runs a pre-planned route on the field to escape coverage from the defensive team and get into an open space for the catch. If the receiver and quarterback time their run and throw just right, the result – assuming the ball isn’t dropped – is a successful catch that can lead to additional yardage, a first down, or even a touchdown.

Imagine, however, that on one unusual team, the wide receiver and quarterback are never in sync. During the huddle before each down, the wide receiver doesn’t hear the plays the quarterback calls, and as a result, runs routes that are nowhere near his throws. As fast and as talented as the receiver might be, the chances of him catching a pass successfully are next to none – and all of his speed and skill is wasted.

Play as a Team, Win as a Team

When it comes to workforce planning, it’s just as critical that all the players involved are in sync. If HR creates a workforce plan that doesn’t square up with the budget that Finance sets, all their work is in vain. The workforce planning process, because of its complexity, truly needs to be a collaborative effort, just like any team sport. Stakeholders in the process have specific roles that capitalize on their individual strengths.

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, it’s monumental — they need to coalesce 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.

But just like the plays of a football team change depending on its field position, the activities required for workforce planning change depending on the stage in the planning cycle. Here are how HR and Finance can keep in sync during three core stages.

1. Budgeting/forecasting

In this early stage, the core workforce plan is created, agreed upon, and distributed. Although as a best practice, workforce planning should be continuous, the reality is that the workforce planning process is usually precipitated by the annual budget cycle. In a typical organization, Finance sets headcount budgets once a year and then reviews them periodically to provide forecasts. Finance often starts the process top down by aligning budget limits with corporate goals and then switches to a bottom-up process — collecting realistic expectations from individual departments and groups.

However, the version of the budget that Finance delivers to HR is likely to be highly aggregated. It typically won’t contain information about the types of roles and locations for headcount, and it may not clearly articulate the impact each team should expect. That’s where HR’s workforce planners need to step in to refine the budget and more accurately allocate the headcount. HR has the expertise and connections with the business to understand what roles and skills are needed and what timelines for hiring are realistic. HR will also have access to more detailed information about workforce dynamics and total costs that can inform their plan. For instance, they’ll have insights into historic turnover trends, including seasonality in turnover, and they’ll have a holistic view of workforce costs, including costs for workforce events like relocation and recruiting that are sometimes overlooked when making plans.

Much like how the coaching staff of a football team scout the strengths and weaknesses of both the opposing team and their own players before creating a game-day strategy, HR and Finance need to work together to create a workforce plan that takes into account the challenges that the company faces, the resources it has, and the goals it has set.

Screenshot from Visier Workforce Planning showing refining the budget imported from Finance.

2. Monitoring

After Finance has set the budget, HR has generated the workforce plan, and the year is progressing, workforce planners will need to review actual performance and spending against the budget or most recent forecast. By doing so, they’ll be able to spot where headcount or spending is off track and decide on what action to take to get back on track.

On a football field, it’s second nature for players to monitor the movement of the ball while a play is live — they can’t assume it was run perfectly or they’ll be in the wrong position to respond to unexpected challenges by the opposing team.

In the workforce, up-to-date monitoring of the current situation is just as vital. To execute a workforce plan effectively, it’s imperative that the latest forecasts from Finance’s budget are brought back into the plan regularly to allow accurate comparison. If Finance has provided a new forecast, it would be counterproductive for HR to compare their progress against the original budget.

Visualization showing how to monitor actual total cost of workforce versus budgeted cost from Finance in Visier Workforce Planning

3. What-if/scenario evaluation

In a football game, many situations require quick decisions by the coach: If a player is injured, who should he replace him with? If his team is one yard from a first down but also close enough to kick a field goal on their last down, which play should he call for? In making his decision, the coach implicitly runs alternative scenarios through his head and quickly hones in on the best option.

In workforce planning, the decision-making time frame may be more generous, but the need to review alternatives is no less important. If partway through the fiscal year, a key workforce policy changes or an acquisition is announced, how should workforce planners respond? If a decision is made using intuition alone, it’s unlikely to be as good as a decision also backed by data. If workforce planners can access the current budget or forecast from Finance as well as accurate, up-to-date information about the workforce, they’ll be able to generate a series of alternative what-if scenarios, understand how they differ, and decide how existing plans should be revised.

Data visualization of scenario comparison in Visier Workforce Planning - comparing options for a tough economy versus a growing economy

Driving towards a common goal

To ensure that everyone drives towards a common fiscal target, up-to-date budget limits from Finance need to be distributed to sub-planners such as division managers and HR business partners. The main planner in HR can then review sub-plans and see how they vary from Finance’s fiscal-year-end goals before consolidating them into the final plan.

In short, an effective workforce planning process requires that HR and Finance work as a team. When Finance is in charge of managing the costs and HR is in charge of managing talent demand, the two groups together can create a workforce plan that brings together the right talent at the right time and cost to meet the business objectives of the company.

Screenshot from Visier Workforce Planning showing collaboration capabilities

 

Workforce Planning How HR Can Stay in Sync with Finance and Talent Acquisition

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Ian Booth |

At Visier, Ian helps companies better plan the future state of their workforce by helping them identify the right mix of talent they need at the right time and the right cost to meet business objectives. Ian brings over 20 years of experience as a product manager, starting in the enterprise content management space. Prior to joining Visier, he held key product management roles at SAP and Business Objects. With his background in analytics, Ian is passionate about creating new products that not only help companies make sense of their data but also leverage the patterns found in data to better predict what will happen in future.

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