The new guide highlights that collaboration between HR and finance is critical for effective headcount planning, with HR's involvement improving decision making and bringing a people-first perspective to the planning process.
TORONTO, May 24, 2023 /CNW/ - Many organizations are seeking to trim labor costs and optimize their existing workforce in a time of economic recession. Headcount planning offers a host of benefits, allowing organizations to become more efficient in the management of labor costs, promote organizational agility, align labor spend with business strategy, and inform and elevate other HR initiatives. To assist HR and organizational leaders in their planning efforts, McLean & Company, the trusted research and advisory partner of HR leaders around the world, has outlined a three-step plan to create a headcount plan in its new industry guide.
In the recently released industry resource, the firm explains that although related to workforce planning, which is the process of forecasting and planning for gaps between talent supply and demand, headcount planning is its own critical function.
Headcount planning is the process of planning required changes to the number of positions in an organization while ensuring alignment with labor budget to meet organizational goals. Headcount planning also helps organizations understand how labor costs are distributed across the organization and can lead to more effective management of those costs.
"The main goal of headcount planning is to determine the right number of jobs and positions needed to achieve organizational goals while still operating within budget constraints. Without collaboration between HR and finance, there are missed opportunities to effectively achieve that goal," says Will Howard, director, HR research and advisory services at McLean & Company. "Headcount planning has a lot of moving parts, so HR's involvement in all the steps aligns stakeholders, brings focus and clarity to the process, and gives a larger perspective to the individual steps."
McLean & Company's research finds that when HR is included alongside finance as a strategic partner, organizations are 1.5 times more likely to be highly effective at changing quickly at scale to capitalize on new opportunities. HR understands quantitative and qualitative people data, while finance has knowledge about labor costs and budgets. Together, this data leads to making realistic, data-informed decisions when headcount planning.
The leading firm's new guide includes a step-by-step process for HR and organizational leaders pursuing the implementation of an effective headcount plan within their organizations. The three-step plan is below:
- Prepare to draft a headcount plan – The first step guides planning leaders in identifying stakeholder responsibilities in the headcount planning process, reviewing organizational goals and strategies, obtaining labor budgets for the current and next fiscal years, and gathering and documenting data on current workforce costs.
- Engage with stakeholders to draft and finalize the headcount plan – Step two requires determining the level of collaboration with department leaders as well as documenting and evaluating headcount requests provided by department leaders. This stage of the process also includes rolling up requests to create an organizational headcount plan that aligns with strategy and budget and submitting the plan to executives for approval.
- Communicate and iterate the headcount plan – The third and final step directs HR and organizational leaders in communicating the approved headcount plan with department leaders, identifying how the plan impacts other HR programs, and planning for the periodic review of the plan.
In addition to its three-step planning process, McLean & Company's industry resource further highlights the key differences between headcount planning and workforce planning, and it includes a glossary of key terminology used in the headcount planning process for HR teams to consider and use.
To access the full guide, download the new Headcount Planning Guide.
For additional research and support, visit mcleanco.com/services or follow on LinkedIn and Twitter.
Through data-driven insights and proven best practice methodologies, McLean & Company offers comprehensive resources and full-service assessments, action plans, and training to position organizations to meet today's needs and prepare for the future of work.
McLean & Company is a division of Info-Tech Research Group.
Media professionals can register for unrestricted access to research across IT, HR, and software and over 200 industry analysts through the firm's Media Insiders program. To gain access, contact [email protected].
SOURCE McLean & Company
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