Strategic Workforce Planning Framework 101

Product. Market fit. Good service. Financial stability. Brand awareness. Trust. There are a wide range of factors that businesses need to succeed. What they all come down to ultimately though, is people. Not just headcount planning (though that’s vital too) but more strategically – If your organization isn’t leveraging its people efficiently, or planning human resources effectively, nothing will succeed long-term. That’s what a strategic workforce planning framework is for.

Strategic Workforce Planning Framework in a Nutshell

Finance leaders and teams will rarely be the ones leading a strategic workforce planning framework process, but they will often have a key role to play in it, so it’s important to understand the concept, the goals, and why the insights that finance and perhaps especially FP&A teams can bring are so valuable.

In a nutshell, the point of a strategic planning framework is to ensure that an organization gets the right people, with the right skills, in the right places at the right time. This leads, in turn, to an organization which is the right shape and the right size, and is spending the right amount on employees.

This sounds like it should be the job of an HR department, and strategic workforce planning frameworks are often led by HR. However, successful frameworks are built by understanding the business’ reality, its goals, and its strategy. Without that context, the framework can’t optimize for the right elements in employees. As Gartner puts it, “Strategic workforce planning begins with business strategy.”

Headcount Planning is Not a Strategic Workforce Planning Framework

It’s important to understand the distinction between headcount planning and strategic workforce planning frameworks as these are sometimes confused, to the detriment of both processes and to the appreciation of those who do the hard work of implementing them.

Headcount planning is an important tactical process which ensures that businesses have the right talent in place to meet current operational needs and avoid short-term problems or panics. Strategic workforce planning frameworks incorporate headcount planning, as well as other factors such as scenario planning, revenue planning, business analytics and more. (For a breakdown of typical stages in building strategic workforce planning frameworks, see here).

The aim of creating strategic workforce planning frameworks is to evolve a strategic understanding of the ways in which workforce requirements impact and reflect the current status and success of the business, and to assess how the workforce will need to adapt going forward to meet the company’s goals and changing market conditions.

The Crucial Role of Finance in Strategic Workforce Planning Frameworks

Successful strategic workforce planning frameworks require deep collaboration between diverse departments within an organization. Each department has the best sense of its own employees, the spread of tasks for which they are responsible, the skills they have, the skills they’re missing, and how things are changing or have been changing in the last year or so. This is of course true for finance as well.

The unique role that finance teams can play in strategic workforce planning frameworks, however, is due to their in-depth access to data. This data might be connected to other departments as well as their own, to wider trends that impact workforce planning, and to the broader picture that comes together when all of these things are considered holistically.

Finance teams can be a key resource for the department spearheading the strategic workforce planning framework creation in two vital ways:

Understanding the present by helping to ensure that everyone involved has a clear understanding of the current state of the business, its objectives, and where it may be achieving or missing those in real time.
Planning for the future. Analyzing how changing markets, customer expectations or requirements, supply chain dynamics etc. may impact the kind of workforce the business will require in 3-5 years time.

In the past, this kind of process would have involved tremendous heavy lifting from a finance team. Today, the use of FP&A platforms such as Firmbase that centralize data from across an organization make it simple and fast to analyze factors such as current workforce allocation, impact of proposed changes including modeling out compensation costs etc., and areas that may soon require additional support or improvement.

Spotlight on FP&A Teams in Strategic Workforce Planning Frameworks

FP&A teams typically focus more on the future than many other teams in an organization. That can be particularly valuable in helping to ensure that workforce planning takes into account not just the trends that are currently being experienced by the business, but those which are only just beginning to evolve.

Finance teams and processes that use FP&A platforms often draw on a wide range and significant scale of data from both internal and external sources, reflecting a real time picture of the company and also an accurate understanding of industry, consumer and market trends that impact not only current business but also future probabilities.

All this is directly relevant for strategic workforce planning. Moreover, workplace planning frameworks are intended to be agile, adapting regularly to be in line with developing trends and changes. For this, being able to make data-driven decisions is essential – another place where FP&A teams can illuminate the data for actionable insights.

Additionally, the processes such as BvA that FP&A teams often engage in to track how things are changing can be leveraged to keep workplace planning frameworks fresh and relevant.

Preparing for the Future

Strategic workforce planning frameworks are becoming more and more vital for organizations as fast-evolving technology such as AI means that companies need to be agile to adapt. The right answer to the question of what you need, in order to have the right employees with the right skills in the right places at the right times, changes quickly as the nature of those skills changes too.

Getting it right is crucial for long-term business success. McKinsey reports a 22% reduction in productivity when employees do not have the right skills to do their jobs. With the right strategic workforce planning framework in place, continuously adapted to meet changing needs and circumstances, organizations can ensure that their workforce will be able to do what’s needed, when it’s needed.

All this results in happier and more productive employees, work processes that are more efficient and effective, and business results that meet company goals and objectives.

See how Firmbase automates 80% of manual FP&A work, enabling FP&As to focus on strategic planning.