Definition: workforce planning

According to CIPD, workforce planning is defined as a core business process that links the changing needs of an organisation with your human resource management strategy. Essentially, you are attempting to optimise the management of your people so they can best accomplish the needs of your organisation.

The workforce planning process is adjustable to suit any organisation's size, scale, and specific market needs. It can be made highly complex – encapsulating a broad range of diverse information and data or streamlined and simple.

Due to the ever-changing nature of business, workforce planning is considered one of the most effective activities an organisation can do to achieve their KPIs and business objectives. Practising workforce planning provides organisations with the market and industry insights that help them focus on the opportunities and threats that may impact them. Identifying these insights, opportunities, and threats prepares organisations to create strategic initiatives and actions that support their long-term goals.

The importance of workforce planning

For the majority of organisations, the largest controllable cost is headcount. According to Deloitte, labour costs often account for 50-60% of company spending. Due to this large portion of expenditure, it is essential for organisations to optimise their management of full-time and part-time employees to ensure they are allocating the right resources to meet their businesses’ needs. For organisations this means that they need to sort out the right number of people, who have the right skills, being in the right place at the right time. Concurrently, FP&A teams need to analyse the numbers related to labour and engage with business managers to ensure costs are justifiably allocated.

However, workforce planning and management extend past cost control. Over-staffing indeed creates costly over-capacity that directly impacts profits – but under-staffing may be even more damaging. Under-staffing could amount to overwhelmed staff, and service failures that may negatively impact revenue short-term, delay important strategic actions tying to competitive advantage and long-term revenue and even make your organisation more susceptible to lawsuits.

Workforce planning software and what to look for

Now that it has been established that workforce planning is a vital component to ensuring business success, let’s explore workforce planning software.

Workforce planning software has a wide variety of functions across an organisation, and selecting an external workforce planning software requires careful consideration of the needs of both finance and departmental managers.

MODLR has compiled a checklist of key considerations when evaluating workforce planning software and their respective solutions:

1. Align staffing with demand

Often workforce planning solutions are used to visualise how demand forecasts translate into staffing requirements. This allows organisations to identify the recruitment gaps that they have or excessive capacity. Because of this usage – it is important to select a solution where it is easy to write and adjust the business rules, alongside setting up alerts for capacity constraints.

If users of the solution cannot easily write or adjust these rules, they would need to rely on either internal IT resources or external consultants, who often resort to utilising offline spreadsheets, instead of using dedicated workforce planning software.

However, when workforce planning in MODLR, authorised users can easily integrate demand forecasts from other data sources or models, even external ones. Furthermore, MODLR empowers non-technical users to define, manage and adjust business rules without needing to rely on IT – saving a significant amount of time and resource strain.

2. Simple internal transfers

In an organisation, staff often move between different roles and departments. Making this transfer process as simple and easy as possible saves a great deal of time and cost while helping retain valuable staff. Utilising the MODLR platform for workforce planning allows for this process to be extremely easy. Within MODLR, an individual can be represented across multiple different hierarchies such as by skill sets, location, achievements, and roles in different departments. Regardless of where an individual is represented in MODLR, expenses related to them will be streamlined into a designated cost centre, based on the effective dates they transferred in or out of a role. This means that individual staff can move around within the organisation without the need to restructure the model – greatly improving user productivity.

3. Rapid model building

As MODLR’s workforce planning solution is cloud-based, users can quickly start with the MODLR platform within minutes, without needing to wait, or rely on IT for any hardware or software. Furthermore – as MODLR tailors its solution to an organisation’s specific needs – we will utilise built-in logic for time, versions, and scenarios, familiar business syntax, and drag-and-drop hierarchies that allow models to be built at a fraction of time from traditional software providers.

4. Dynamic Scenario Analysis

For any organisation, the ability to quickly course-correct and re-plan due to unexpected disruptions such as sickness, or overwhelming service demand, is vital. Using MODLR, users can smoothly and easily change, copy and update models with real-time calculations. This means they can dynamically make changes to even granular models on specific data relating to individual employees, anytime, anywhere – even while grabbing a coffee.

5. Flexible Time Periods

Within an organisation – not all staff will be or want to be working in the same time periods. Some staff will be allocated with flexible work times, different shifts, and even working seasonally at different times of the year. A lot of workforce planning software struggles to work around this flexibility, but MODLR thrives with flexibility. No matter what time periods are being used, MODLR can automatically provide a relevant monthly view for financial reports and forecasts.

Start evaluating workforce planning software today

Implementing workforce planning software is imperative to ensuring an organisation optimises the productivity and profitability of their labour. Ensuring that staffing is efficiently allocated to the demands of the organisation will save on costs while avoiding the pitfalls of under-staffing. MODLR’s workforce planning software has your organisation covered – with the quick, clear, and easy alignment of your staffing with the demands of your business, simple internal transfers, rapid model building, dynamic scenario analysis and flexible time periods.

Schedule a free demo of MODLR to see the CPM Cloud in action