How workforce planning keeps HR proactive, not reactive
June 12, 2017
When an employee leaves a company, human resources professionals have to spend their valuable time and money looking for a replacement. If the employee quit unexpectedly, and HR is left scrambling and dealing with the aftermath, it can have a highly negative impact on a company's bottom line.
According to the Society of Human Resource Management, companies typically spend the equivalent of six to nine months of an employee's salary to find a replacement. That means if an employee made $60,000 per year, an employer would potentially dole out $30,000 to $45,000 to bring someone new on board.
These costs may include training, paid postings on job boards and fees for drug tests and background checks, as well as the hours of work lost when a position remains unfilled (even if other employees are picking up the slack, it's difficult to fully address the responsibilities of an empty role). Not to mention, HR may have to re-prioritize their own responsibilities while looking for candidates: According to Fast Company, it now takes an average of 23 days for employers to interview candidates—if HR managers are busy interviewing candidates, they're likely not as focused on their day-to-day responsibilities or strategic work.
How can HR combat this talent and resource drain? Instead of scrambling to find new hires every time an employee leaves, HR professionals can take a proactive approach to turnover with workforce planning.
What Is Workforce Planning?
Workforce planning is a form of strategic HR—a practice that enables HR professionals to work with executives and help their company achieve long-term goals. The top organizations around the globe use workforce planning to accurately identify and track future talent gaps.
Once HR workers predict when talent gaps are going to potentially occur, they can start looking for replacements. If they wait until the employee has already left, then they may end up hiring someone who isn't the best fit for the job. (Along with all the energy spent on finding a new employee, the companies may lose about $50,000 on their bad hire.) With workforce planning, HR can keep a list of potential candidates on record, generate forecasts and determine cost impact.
Generating Accurate Forecasts
HR professionals have a number of day-to-day obligations. They interview new candidates, post job vacancies, track benefits, perform headcount reporting and more. Aside from their organizational tasks, they're also increasingly asked to do strategic analysis to push their company forward.
One of their strategic responsibilities is to generate accurate forecasts. By utilizing workforce planning, HR professionals can determine what labor the company will need. They will look at attrition rates, see who is planning to retire in the future and factor company fluctuations and sales numbers into their predictions.
Forecast generation helps executives budget for the future, organize their departments accordingly, make changes in the office setting and figure out scheduling amongst employees.
Visualizing Cost Impacts
Effective workforce planning also involves the data visualization of cost impacts. HR professionals are responsible for showing their executives how much it will cost to lose and hire a new employee, what kind of resources they will need to train and retain an employee and how much they may spend on growing their company.
Once executives assess these visuals, they can do budget forecasting and salary forecasting to ensure they are prepared for what lies ahead.
Using an HRIS for Strategic HR
HR professionals cannot be strategic partners without the help of the proper tools and software. That's where a Human Resource Information System, or HRIS, comes into play.
For effective workplace planning, HR leaders need access to employee data and advanced analytics. An HRIS can provide high-level insight on turnover trends, and help HR professionals generate reports and forecasts to secure executive support. It helps professionals place employees in the right positions, as well as decrease the chances of attrition.
With HR software, talent management professionals can seamlessly perform workforce planning and organizational reporting. They can be proactive in their company's growth, and give their executives the critical information they need to guarantee the success of their company.
Curious about a workplace planning solution you can use at your business? Check out Cornerstone Planning.