Maximize Business Results by Preparing Your Headcount Plan Within Budget

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Maximize Business Results by Preparing Your Headcount Plan

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Kellye Whitney Associate Editorial Director Workforce magazine


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John Kranz Product manager of workforce planning and analy>cs PeopleFluent


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© PeopleFluent 2015

Maximize Business Results by Preparing Your Headcount Plan within Budget

October 7, 2015 John Kranz, Product Manager

11 of 60 © 2015 PeopleFluent Maximize Business Results

Agenda •  Budge>ng vs. Planning •  Alignment to Workforce Plan •  Planning Considera>ons to Maximize ROI

•  Evaluate Workforce and Cri>cal Roles •  Manage Headcount and Spans of Control •  Managing Your Talent Pipeline •  Retaining Top Talent •  Succession Planning

•  Building the Headcount Plan

© 2014 PeopleFluent | Confiden>al PeopleFluent VMS 11.6 Product Update Overview 12 of 44

Budge>ng vs. Planning


Budge>ng vs. Planning


Focus on maximizing return on every dollar invested associated with the overall Headcount Plan… What drives this ROI? How do we mi=gate investment risk or reduce expenditures? How can we make more informed Planning decisions?


1.  Connect all Planning efforts with the overall business strategy 2.  Ensure senior leaders’ involvement and commitment to Workforce Plan is

visible 3.  Foster collabora>on throughout the organiza>on, par>cularly in HR, to

drive informed Plan decisions 4.  Train leaders in how to differen>ate employee performance 5.  Keep your processes, tools, and technology simple, easy-‐to-‐use and

offering clear and immediate value to managers 6.  Hold managers accountable for reaching Plan objec>ves 7.  Posi>on Planning as a management priority not an HR project or simple

budge>ng exercise

Maximizing Investment/Return on Plan

Source: Adapted from 7 Tips to Maximize Your Investment in Human Capital Management, Nancy Heet, Workforce Management Strategies


Alignment to Workforce Plan


The Importance of Planning



The Importance of Planning

Searchpp.com/workforce-‐planning


10 Steps to Workforce Planning

Source: KPMG’s 10 Steps to Strategic Workforce Planning


Workforce Planning Process


Do we have the talent in place to meet our strategic goals?

Source: Bersin by Deloige, 2014 HR Predic>ons


•  Translate business strategy into organiza6onal capabili6es

•  Determine the talent needed to deliver on organiza6onal capabili6es

•  Confirm current talent needs and future talent forecasts

•  Conduct a talent gap analysis for current and future states

•  Iden>fy ac6ons and investments to close current and future talent gaps

•  Monitor and measure results

Do we have the talent in place to meet our strategic goals?

Source: Sibson Consul>ng Source: Bersin by Deloige, 2014 HR Predic>ons


Planning Considera>ons to Maximize ROI


Headcount Planning Considera>ons 1.  Evaluate workforce and cri>cal roles 2.  Manage headcount and repor>ng rela>onships to

maximize employee engagement 3.  Manage your talent pipeline

•  Minimize Reten>on Risk •  Maximize Quality of Hire •  Implement measureable Talent Plans •  Consider con>ngent workforce (Build vs. Buy)

4.  Building the Headcount Plan •  Align the finance team’s budget with your goals •  Compare and contrast mul>ple headcount plans •  Deliver your headcount plan for execu>ve review


Evaluate Workforce & Cri>cal Roles


Evalua6ng Workforce with Talent Data •  Performance/Poten>al Ra>ngs •  Performance of New Hires •  Cri>cal Roles •  Reten>on Risk •  Posi>on Requirements •  Readiness / Development Plans •  Posi>on and Company Tenure •  Qualifica>ons •  Time to Hire •  Good/Bad Agri>on •  Internal Placement •  Re>rement Eligible Date


Are You Able to Visualize Key Talent Data?


What is a Cri6cal Role? Jobs that must be performed—and

performed well—for companies to succeed


Iden6fying Cri6cal Roles

Internal •  What is the level of risk to the enterprise if the posi>on is len

vacant for an extended period? •  To what extent does the posi>on:

•  Drive revenue and impact bogom-‐line financial results? •  Involve developing strategy, designing new products, or crea>ng growth opportuni>es for the organiza>on?

•  Require broad decision making authority? •  Involve rela>onships with external customers and key stakeholders?

•  Influence the performance of or manage other cri>cal posi>ons?


Iden6fying Cri6cal Roles

External •  What is the current market value of the posi>on? How has the value changed over >me?

•  How is the posi>on valued by other companies? •  What is the degree of compe>>on for qualified candidates for this posi>on in the marketplace?

•  To what extent does the posi>on require the use of rare/unique capabili>es and skill sets?


Ques6ons

•  What is a cri>cal role in our organiza>on? •  How do we iden>fy and compare candidates for cri>cal roles?

•  Do we have a succession plan around our cri>cal roles?

•  What is our voluntary turnover rate for cri>cal roles?

•  Do we have Development Plans to fill Cri>cal Roles from within the Organiza>on?


Poll Ques6on #1

Have you defined Cri>cal Roles for your organiza>on?

•  Yes •  No


“Yes, We’ve Iden6fied Cri6cal Roles”


“Yes, We Also Know Our Bench Strength”


Manage Headcount/Spans of Control


Headcount and Span of Control Analysis •  Organiza>onal Leveling •  Evaluate direct report distribu>on •  Posi>ve Indicator for Employee Engagement •  High Performers by Manager •  Internal Promo>on Rate by Manager •  High Performer Employee Reten>on by Manager


Poll Ques6on #2

Do you measure Headcount and Span of Control across your organiza>on?



Headcount and Span of Control Analysis


Managing Your Talent Pipeline


Key Considera6ons

•  Iden>fying Talent Gaps •  Minimize Reten>on Risk and Agri>on •  Maximize Quality of Hire •  Implement Measureable Talent Plans

•  Consider con>ngent workforce (Build vs. Buy)


AXri6on vs. Reten6on

•  Agri>on/Turnover -‐ the gradual reduc>on of the size of a workforce by not replacing personnel lost through re>rement, resigna>on, sickness or death

•  Reten>on -‐ an effort by a business to maintain a working environment which supports current staff in remaining with the company

Source: SHRM


Business Impact of AXri6on •  Costly ($11B Annually*) •  Effects business performance

•  Customer Rela>onships •  Company Reputa>on •  Loss of Intellectual Capital •  Reduced Produc>vity

•  It can be hard to manage

Source: SHRM *Bureau of Na>onal Affairs


Costs Associated with AXri6on

•  Direct replacement costs can reach as high as 50%-‐60% of an employee’s annual salary

•  Total costs associated with turnover ranges from 90% to 200% of annual salary

Source: SHRM


Why Employees Leave •  Rela6onship with Immediate Supervisor •  Low Employee Engagement •  Poli>cs •  Recogni6on •  Lack of Onboarding Program •  Company going under •  Believe in Senior Leadership •  Employee Value Proposi>on •  Lack of good working condi>ons •  No flexible work schedule •  Very few suppor>ve colleagues •  Work-‐life imbalance / Re6rement eligible •  Lack of challenges in job / goal seung •  Mismatch between job and person (80%) / onboarding

•  Lack of coaching and feedback

*Center for Management & Organiza>on Effec>veness


Poll Ques6on #3

Do you track Re>rement eligibility to forecast Employee agri>on?



Re6rement Eligibility


Retaining Top Talent


Recrui6ng Prac6ce impacts Reten6on

•  50% of companies with high reten>on don’t use job boards

•  Social media is cheaper and more effec>ve (7% of applicants from referrals account for 40% hires)

•  Hires referred by other employees more likely to s>ck around (3 yr. study: 47% referrals, 14% job boards)

•  Average referral bonus for FTE’s is $1,200 (compare this outlay to cost for replacement hire!)

•  Measuring Up: Performance Ra>ng of New Hires and reten>on by Hiring Source


Can Employer Improve Reten6on?


Preflight Checklist for Higher Reten6on

•  Social Media/Referral-‐based Recrui>ng •  Quality of Hire •  Effec>ve Onboarding Process •  Quarterly Goals/Review Process •  Employee Engagement Surveys •  Cri>cal Roles •  Flight Risk Mi>ga>on •  Development Plans •  Succession/Replacement Planning •  Good Turnover •  Benchmarking and Goal Seung


Succession Planning Considera>ons


Poll Ques6on #4

Do you conduct formal Succession Planning today?

•  Yes – for Director-‐level and above only •  Yes – extending down to Line Manager posi>ons •  No


Succession planning needs to be in place up and down the en6re chain of command, not just for

management roles

Defini6on: Succession Planning/Development

The structured and coordinated prac6ce of iden6fying and preparing pools of internal talent to fill key posi6ons, with the goal of mee6ng business objec6ves.


What is Lacking in Succession Planning?

•  Not enough opportuni>es for employees to learn beyond their own roles – 39%

•  Process isn’t formalized – 38% •  Not enough investment in training and development – 33%

•  Not ac>vely involving employees or seeking their input – 31%

•  It only focuses on top execu>ves – 29 % **Managers also reported that workers’ awareness of and input on their own succession planning is important. 49% of employers said employees don’t set up career paths with their managers with >melines and milestones

Source: CareerBuilder


Value of Succession Planning

•  Avoids costs. Replacing someone, especially with an external candidate, creates costs in the areas of recruitment, HR administra>on, lost produc>vity, and missed opportuni>es.

•  Retains skills and knowledge. These are assets with real value that may be impossible to replace.

•  Prevents backfilling. Stop the unintended ripple effect that’s created down the ranks as employees act as stop-‐gaps for vacant roles.

•  Creates fluidity. An “irreplaceable person” won’t be promoted, blocking advancement for those below. This entrenchment forces a costly external search.

•  Improves engagement and reten6on. Reduce turnover by engaging and keeping talented people. Offer clear career paths and build a team culture.

•  Removes vulnerability. Skills redundancy ensures business con>nuity if a key staff member leaves.


Ques6ons

•  What is our Bench Strength for Cri>cal Roles?

•  Are we extending Succession Planning below Director Level?

•  Do we understand the posi>on requirements to properly iden>fy Successors?

•  What programs are proving effec>ve to increase Successor Readiness?


Succession Planning


Succession Planning with Successors


Succession Planning Dashboard


Building the Headcount Plan


Headcount Planning: Tools of the Trade


Headcount Planning: Tools of the Trade


Headcount Planning


Headcount Planning with Budge6ng


Headcount Planning: Closing the Gap and Staying Within Budget


Headcount Planning: Before and Aber


Headcount Planning Recap 1.  Evaluate workforce and cri>cal roles 2.  Manage headcount and repor>ng rela>onships to

maximize employee engagement 3.  Manage your talent pipeline

•  Minimize Reten>on Risk •  Maximize Quality of Hire •  Implement measureable Talent Plans •  Consider con>ngent workforce (Build vs. Buy)

4.  Building the Headcount Plan •  Align the finance team’s budget with your goals •  Compare and contrast mul>ple headcount plans •  Deliver your headcount plan for execu>ve review

TM © 2015 PeopleFluent Managing Your Talent Footprint

Thank You

Find PeopleFluent on… TwiXer: twiger.com/peoplefluent LinkedIn: linkedin.com/company/peoplefluent Facebook: facebook.com/peoplefluent Blog: peoplefluent.com/resources/peoplefluent-‐blog

John Kranz Product Manager [email protected] (m) 480.225.8204

For more informaJon, call:

214-‐574-‐5020 or visit our website at: www.peoplefluent.com/products/organizaJonal-‐planning

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