With headcount and workforce expenses comprising such a large percentage of business spending, a finance-led approach to workforce planning is non-negotiable.
These 5 emerging trends are changing the future of the workforce planning process. Workforce spending is more than a line item, it’s a critical factor in hitting or missing organizational goals.
FP&A leaders: how have these trends already influenced your strategy and decision-making process?
5 Workforce planning trends in 2024
1. Riding the economic rollercoaster requires agility
Many businesses now employ a blend of office-based and remote employees, so workforce planning needs to be more flexible to hit revenue goals. Analysts need to identify different KPIs to monitor remote workforce costs compared to in-person (varying retention rates, for example).
Economic uncertainty has affected headcount and hiring plans across multiple industries. FP&A needs to collaborate effectively with all departments and provide data-backed forecasts and recommendations to adapt to these changes.
2. AI improves the planning process
Enterprise-level strategic workforce planning tools have included AI to assist with predictive analytics and tailored salary models. AI can dissect workforce data and suggested tailored training paths for employees to build new skills (which is more important than ever, as you’ll see in trend 3).
Smaller teams without an enterprise-level FP&A tool can still apply AI to improve efficiency in their interview or onboarding process. Machine learning algorithms can automatically deliver the next pieces of content in an onboarding sequence, or sort through resumes and applications. Those resource-saving efficiencies are music to the financial analyst’s ears!
3. The rise of the contractor
Contracting isn’t just for the gig economy anymore; it's growing more popular in the corporate sector too. The growing preference for freelance and contract roles demands a strategic response from finance teams.
There are costs and benefits to weigh. Scalability and flexibility are bonuses, but possible issues with low engagement or retention rates could negate any profits. FP&A teams also need to pay close attention to the different compensation structures for ‘gig’ workers (who are often looking for the most competitive pay) into their workforce capacity planning.
4. Skills gaps require investment
87% of organizations know they have a skills gap or will face one within the next few years. To prevent high turnover and missed strategic goals, leadership teams need to prioritize employee upskilling and training. FP&A teams should advocate for budget allocations to training initiatives to build a robust and capable workforce for business changes that lie ahead.
5. A growing multinational workforce
Remote work isn't just about working from home. It has opened doors to a worldwide talent pool, even for single-location SMBs. But this global reach introduces considerations like time zone differences and cultural nuances. Finance teams will play a vital role in managing the quantitative aspects of the multinational workforce expansion by focusing on metrics around productivity or seasonal workforce availability and capacity.
FP&A teams should lead through these changes, but challenges remain.
Your team should pay close attention to these trends to increase the strategic value of your workforce plans. Planning all starts with a data-driven understanding of the present, but integrating and reconciling critical data in ERP and HRIS systems is a pain for analysts. This time-consuming step leaves almost no margin for you to pull back and consider the implications of macro trends, draw useful insights from the data, and convey that to stakeholders.
Improve workforce planning and analytics with a strategic tool
Workforce planning software is one of the most valuable resources that strategic finance teams can use to manage the headcount analysis process.
Tools like Stratify offer vital organization, data integrations, automated reporting, headcount reconciliation, and collaborative planning features that make workforce planning a much less frustrating process. These tools streamline the tedious manual work so you have time to make observations and provide strategic recommendations based on actual workforce performance.
These tools prepare your team for whatever trends are coming. For example, agility is much more attainable when you can re-forecast and produce different workforce plan scenarios in a fraction of the time. And these tools are exactly what you need to survive the economic roller coaster, acting as your source of truth on actual workforce spending as you balance headcount, contractors, and varied compensation structures. No more headaches trying to figure out who gets what and when.
As these trends begin to change headcount and workforce costs, FP&A teams should find the right toolkit to effectively manage their workforce data and support business partners with strategic advice.
Compare options and find the best fit for your organization: The Top 5 Workforce Planning Tools for Strategic Finance
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