All companies create plans to help prepare for the future, aligning their limited corporate resources—people and dollars—against the strategies that they believe best leverage their competitive market advantage. Through collaborative planning, departments coordinate and allocate the company's finite resources. Companies that can best detect market opportunities and quickly realign their resources gain a competitive advantage. A company's workforce represents its most critical resource.
Using Workforce Planning, companies determine the employee resources needed to achieve their targets, assign existing employees to various positions, and plan for adding new employees. Companies must also gauge the various direct and indirect costs incurred by employees, such as health care, equipment, and taxes. Workforce Planning calculates these expenses—both simple and complex—based on certain drivers. Driver-based planning runs key business assumptions through models, providing the insight to proactively manage the volatility of future financial performance. For example, performance drives bonus and merit increases, primary factors in determining total compensation.
Workforce Planning allows actions such as transferring employees to another department, planning for their departure, and placing them on maternity leave or leave of absence.
Corporate planners, operational managers, or department managers prepare the workforce plans, sometimes including multiple scenarios. They submit them to senior financial and Human Resource managers for review and approval. A corporate planner typically consolidates the plan and prepares reports about the workforce. Companies can iterate plans, when necessary, to respond to changing conditions.