In most organizations, people are always considered to be the biggest cost of the business. Getting control of this process is vital for companies to financially perform well.
It is not only about headcount. The cost of the workforce is impacted by many factors, which include retention, salary, departmental structures, recruitment rates, and automation. The more control an organization has over the vast organizational expense, the better it is.
How workforce planning can be defined?
The employees in the organization are not only the biggest cost – but also the asset of the company. Workforce planning is everything about aligning the strategy of employees with your evolving business plan and organizational needs.
Employees are the ones who make the organization. Everyone needs to understand, no people lead to no business. This is why any strategy in the business that doesn’t understand considering how the workforce will be distributed and organized gets flawed deeply.
Workforce planning ensures the right employees in the organization, with the skills needed at the right time. It looks at your current position, where you want to see yourself, and shows what is needed to fill the gap.
This involves everything from questioning about work that needs to be completed in the organization and the one that needs to be outsourced, to keep the balance between part-time and full-time employees.
It could be addressing the growing question of which tasks are performed effectively with the help of Robotic Process Automation, or deciding where the work needs to be done in experiencing the best financial results and biggest opportunities.
Why is workforce planning essential?
The lines are still blurred when it comes to who should be the leader of workforce planning, while this sounds more like fHR work than finance. For some companies, the process is owned by HR because of the obvious link to all things people in the business.
Others might give out this responsibility to the organizational development team if there’s one in place, while large organizations comprise a specific team that is entirely dedicated to workforce planning.
The role which is known as a key player in making the strategies of workforce planning is considered as a CFO.
The employee costs a large proportion of workforce planning, so the CFO needs to keep an eye from starting. Good workforce planning means bringing the business near to reaching its financial and strategic goals.
The CFO’s voice works as credibility when it comes to:
- Understand the impact of changes in the number of employees on operating expenses fully.
- Determining the investment plan required for the implementation of the workforce plan.
- Recognizing the impact of different workforce scenarios on the margins of products and services.
- Defining organizational structure and crucial roles.
Real-time visibility of all the factors in workforce planning, each of them carrying a cost, empowers CFOs to achieve accuracy, speed, and confidence about the changing and complex workforce data with whom they are working.
The planning of the workforce should be constantly done by every organization, but more emphasis should be on change like mergers or acquisitions.
After all these things, effective workforce planning gets neglected often, but it has been found in the research that it is getting more essential than before. If you are considering “how to become an investment banker,” you need to understand the cost of owning a workforce that is increasing than the budgets available.
Organizations are forced to learn how to generate more value with less resources rapidly. As a result, the biggest cost of the organization, which is the workforce, needs to be optimized with the workforce planning systems that fit perfectly.
It was revealed recently in a study that more than one-fourth of executives globally said their companies are not prepared to address the skill gaps. While 70% of them expect that half of their company’s workforce will need replacing or retraining within five years.
Workforce planning shows the future obstacles and the organizations are taught about what can be done to mitigate risk and look for growth opportunities.
The advantages of automated workforce planning process place it a lot more in the CFO’s domain: more time spending on higher-value tasks, faster insights; real-time analysis; more decision-making accurately, ability to model ‘what-if’ scenarios before making any decision commitment, better cost-saving by time, and better ability to match spending the resource.
Workforce planning examples
Understanding gaps in the process
Use workforce planning to know where the skills are missing, and determining when the capabilities are needed and how long it takes to obtain them.
Predict workforce needs for future
Know about the possible scenarios that can come in the future and use it to understand what it means for your workforce.
Improve work quality and productivity
Know where time is getting wasted and increase productivity by taking certain benefits such as outsourcing repetitive work and adopting new technology.
Identify the spending which you are making unnecessarily and take certain actions so that it can be reduced.
Keep the balance between different employees
Know the perfect ratio of remote workers, full-time employees, freelancers, and contractors for success.
Create initiatives to reward employees
Effective workforce planning helps to understand how the employees can be rewarded in a way that keeps both you and your budget happy.
Adapting changes easily
Understanding clearly what is in the workforce lets you seamlessly adapt to the changes in the long or short-term.
Recruit with confidence
Recruiting can be a tedious process that is left to intuition. Workforce planning shows how hiring new people will impact the overall vision of the organization.
There’s no doubt that strategic workforce planning is increasingly getting complicated in the investment banking arena. Now the employees are facing a battlefield that has moved markedly from the landscape of ten years ago – and this will continue to evolve.
The need in adapting engagement strategies and talent attraction quickly is now more essential than it has ever been.