Workforce Planning in Financial Planning

Many companies view financial planning in purely monetary terms – supply and demand, profits and losses, taxes, and investments, etc. The reality is that companies and businesses are made up of people, and no profits can be made if not for the skill sets and expertise of the employees who generate those profits. That’s precisely why workforce planning, and a strong Human Resources (HR) department, is crucial for financial success.

Workforce planning is the strategic process of aligning employee productivity with desired business objectives. HR departments often handle monetary concerns such as salary negotiations, benefit packages, allocated sick days or paid time off, etc., but this type of planning rarely is considered part of a company’s overall financial plan towards growth and profitable outcomes. Here are a few key steps to consider when using workforce planning to create a comprehensive financial plan for your business or company:

Codify key workforce goals: These can be broader statements about what you’d like to accomplish overall with your workers. Things such as reducing turnover, increasing employee productivity, promoting specific staff members in preparation for other staff members’ retirements, etc.

Identify your overall objectives: Create specific, measurable, realistic, and time-sensitive objectives for your workforce that align with your overall goals. Retain 80% of employees over a 2-year period, decrease incident reports by 20%, etc.

Create strategies to obtain objectives and meet goals: These strategies will vary based on the type of business you run but should again be realistic and comprehensive strategies that you can incorporate into your workforce. For example, creating professional or financial incentives to reduce turnover, developing new recruitment strategies to fill vacant positions, etc.

Delegate: Decide who will be implementing and overseeing these strategies, what the tangible outcomes need to be, how you will identify if you’re on track to meet these outcomes, and when these strategies need to be set in motion. Think of this step as the actual action plan for carrying out all previous steps.

Anyone who works as part of a team knows that a business is only as successful as its employees – when employees are motivated, satisfied, and engaged, productivity rises, expectations are met and exceeded, and profits increase. Any comprehensive financial plan absolutely must consider the needs and desires of its workforce, and with workforce planning, you can ensure that your company flourishes as its employees do.