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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Maximize Business Results by Preparing Your Headcount Plan
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Kellye Whitney Associate Editorial Director Workforce magazine
Maximize Business Results by Preparing Your Headcount Plan
Within Budget
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John Kranz Product manager of workforce planning and analy>cs PeopleFluent
Maximize Business Results by Preparing Your Headcount Plan
Within Budget
© 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
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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?
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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
© 2014 PeopleFluent | Confiden>al PeopleFluent VMS 11.6 Product Update Overview 16 of 44
Alignment to Workforce Plan
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The Importance of Planning
Searchpp.com/workforce-‐planning
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10 Steps to Workforce Planning
Source: KPMG’s 10 Steps to Strategic Workforce Planning
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Do we have the talent in place to meet our strategic goals?
Source: Bersin by Deloige, 2014 HR Predic>ons
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• 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
© 2014 PeopleFluent | Confiden>al PeopleFluent VMS 11.6 Product Update Overview 24 of 44
Planning Considera>ons to Maximize ROI
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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
© 2014 PeopleFluent | Confiden>al PeopleFluent VMS 11.6 Product Update Overview 26 of 44
Evaluate Workforce & Cri>cal Roles
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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
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What is a Cri6cal Role? Jobs that must be performed—and
performed well—for companies to succeed
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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?
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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?
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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?
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Poll Ques6on #1
Have you defined Cri>cal Roles for your organiza>on?
• Yes • No
© 2014 PeopleFluent | Confiden>al PeopleFluent VMS 11.6 Product Update Overview 36 of 44
Manage Headcount/Spans of Control
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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
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Poll Ques6on #2
Do you measure Headcount and Span of Control across your organiza>on?
• Yes • No
© 2014 PeopleFluent | Confiden>al PeopleFluent VMS 11.6 Product Update Overview 40 of 44
Managing Your Talent Pipeline
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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)
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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
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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
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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
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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
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Poll Ques6on #3
Do you track Re>rement eligibility to forecast Employee agri>on?
• Yes • No
© 2014 PeopleFluent | Confiden>al PeopleFluent VMS 11.6 Product Update Overview 48 of 44
Retaining Top Talent
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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
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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
© 2014 PeopleFluent | Confiden>al PeopleFluent VMS 11.6 Product Update Overview 52 of 44
Succession Planning Considera>ons
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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
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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.
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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
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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.
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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?
© 2014 PeopleFluent | Confiden>al PeopleFluent VMS 11.6 Product Update Overview 61 of 44
Building the Headcount Plan
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Headcount Planning: Closing the Gap and Staying Within Budget
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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