How to create organizational alignment with strategic workforce planning
By: Anju Rao
Tags: Connected Planning, Workforce Planning, CFO, Human Resources, Anaplan

“When it comes to C-suite relationships, the mandates of a CFO and CHRO may sometimes feel at odds. CFOs are charged with safeguarding the organization’s financial health, and HR — specifically, human capital — is a major cost center.” — Partnering on Benefits: The Advantages of CHRO, CFO Collaboration

As organizations transform to meet the needs of their markets, CFOs and CHROs must work together to align their long-range financial plans with the future workforce. In most companies, people operation costs are the largest spending area. Every CFO’s mandate is to control, manage, and predict an organization’s financial health over the course of its lifespan. As organizations move into the next decade, it will be crucial to create a vision for how workforce transitions can affect the company’s financial health. Identifying these transitions, including diversity, skill mix, and retirement planning, will help your company remain competitive.

Organizational workforce planning challenges

When it comes to creating synergy and insights between the CFO and the CHRO, there are a variety of challenges. Because of external factors and the fact that we live in a connected, data-driven world, creating a road map for the business has become more complex than ever. Being able to model multiple trends on an organization’s workforce simultaneously is a complex and typically manual process that involves multiple siloed systems, spreadsheets, and guesswork. All of these create a gap in aligning the needs of people operations with the organization’s business and financial goals.

Challenges facing the CFO and CHRO

As a CHRO trying to model the workforce of the future and the required strategic shifts, you’ll also need to share the financial impacts of those shifts with your CFO. Being able to accurately plan long-term workforce trends is essential to creating a healthy financial plan.

As a CFO, how do you understand what makes up your long-term operational costs? When you’re managing your long-range plan, how accurate is the department spend? Are other parts of the business taking the same factors into account? How can you create a long-range plan that all parts of your business are contributing to and supportive of? Most importantly, how can you get more insight into your largest spend center?

Creating a connected workforce plan for your organization

The path to creating a more connected vision for your organization begins with using a cloud-based Connected Planning platform to link your long-range financial plan to your strategic workforce plan.

Consider the case of a growing tech company that needs to plan headcount for the next 10 years. The company decided to use gross sales from its financial models and staffing ratios as a baseline. After the HR team does a baseline forecast for headcount, the strategic workforce planning model allows the team to plan various scenarios for company growth, promotion, and attrition rates. The results are then consolidated back into the long-range planning model to inform finance of the HR forecast — connecting the two plans to provide a comprehensive view of the organization over a broader period of time.

This is just one example of how connecting your financial plan to your workforce plan will allow you to accurately and strategically plan for market shifts. Not only can you manage promotion and attrition rates, but you can also plan out hires based on gender and ethnicity to achieve your diversity targets. All of this, including the impact of economic growth or a recession, can be seen immediately in corporate profits and losses to create a connected planning ecosystem. A Connected Planning platform like Anaplan can help you connect multiple parts of your business in real-time to enable a more accurate long-range plan, a more strategic workforce plan, and better insights into your organization.

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