Monday, 18 October 2021 20:43

xP&A in Action: The Benefits of Workforce Planning

Written by Chris Chan
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What is an organization’s most vital asset? Talent, otherwise known as people running the show. To retain top talent and to plan for the future of an organization, effective workforce planning is paramount. An integrated financial and workforce planning approach is becoming one of the most vital aspects of staying competitive in business.

xP&A (Extended Planning and Analysis) is a complete transformation of the FP&A function to move beyond the finance function to challenge the status quo, educate, shape continually, and influence management decisions. Workforce planning is a key aspect of xP&A: it goes beyond just finance and extends into HR, sales, supply chain, and marketing. Moreover, in many leading organizations it is enhanced by analytics.

This article highlights the immense benefits of one of the important aspects of xP&A – an integrated workforce planning approach. Let’s examine some of the challenges this approach seeks to address.

The challenges of a manual workforce planning

For most companies, headcount costs represent one of the most significant expense lines. However, FP&A professionals often dread the possibility of questions concerning headcount assumptions and costs. And with good reason! When it comes to providing information to managers, workforce or headcount planning is one of the trickiest areas.

Why is it so hard to get quality information for this critical part of a business? 

  1. Disconnected financial and human resource Systems.
    For FP&A professionals, this means going back and forth with HR to understand assumptions. Data is often traced back to outdated standalone Excel sheets. Moreover, headcount in organizations is constantly in flux, and a manual process makes it virtually impossible to stay on top of.

  2. Communication challenges and delays between functions.
    FP&A and human resources have different financial comprehension levels, which makes seamless communication challenging. This gap results in delays in obtaining quality information.

  3. Lack of insight from data.
    It is very hard to create accurate forecasts if you do not have financial and workforce data in one place. But even if you do have it together, making sense of all the data is just as difficult without advanced analytics to turn the data into consumable information

The top three benefits of integrated workforce planning

In light of the above challenges, it’s no wonder that FP&A professionals would find the thought of an integrated workforce planning model appealing. Imagine the ability to answer the CEO or CFO’s questions on the fly using dynamic reporting, including the

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