Staffing Management

Headcount planning strategies to consider, even in the face of disruption

By Andie Burjek

Jul. 28, 2020

A vital part of any organization’s talent management strategy, headcount planning, or labor forecasting, ensures that it has the right number of employees with the right skills. But hiring more staff isn’t always an option. External forces or internal budget constraints may deter organizations from making the talent and staffing decisions it wants to make. 

Workplace experts explained headcount planning strategies, how disruption informs future plans and how hiring someone new isn’t always necessary. 

Also read: Labor analytics: A how-to guide for company leadership 

Hiring from within

There are times when an organization should hire someone new, but with budget constraints, they need to rely on a current employee rather than a new hire, said Emily Rose McRae, a director in the Gartner HR practice. This is doable when certain units or teams at the company are moving more slowly, therefore giving them space to give up a team member to a different unit. 

In many workplaces there is resistance to hiring from within, McRae said. Managers may have a long list of qualifications in mind for the person who will fill a particular role, and they may believe no internal hire meets those requirements. 

Sometimes that may be true, she said, but a current employee often can do a new job with a reasonable amount of reskilling. 

She suggested that companies find a current employee with a similar skill set who can take over the role for two weeks. This could be someone on a different team who has a lighter workload for the time being. Based on their experience in this new role, they can inform the manager from an outsider’s perspective what skills a candidate needs from day one versus what skills can be taught over time. 

Regarding the long list of requirements and skills managers seek for a candidate, McRae also encouraged managers to realize that many skills are transferable. A candidate or current staff member who knows one spreadsheet software can easily learn another one. 

Also read: Labor forecasting requires a stronger analytics skillset

While reskilling can be a valuable tool and can help workers move to roles in the company that weren’t an option before, it’s generally difficult to get people to reskill simply by making resources available, McRae added. Employees are busy and have responsibilities outside of work. 

One effective way around this is to approach specific employees — like those in a department that’s at risk of being downsized — and offer them the opportunity to reskill with a specific new role in mind, McRae said. This strategy may motivate workers to learn new skills, since it’s difficult to get people to reskill with no end goal in mind.

Staff planning in a time of uncertainty, disruption and innovation

McRae suggested that managers and leaders do scenario planning — considering what possible outcomes are and having strategies mapped out to address these different possibilities. 

headcount planning strategies

For example, if demand for the product dropped by 50 percent due to various factors, what would happen to the business, and how could it address that? If a company discovered that the delivery service in their supply chain was disrupted in some way, how would it impact business? Essentially, what are the biggest risks and the possible outcomes of those risks?

Sometimes the way a business addresses these scenarios may be costly, like hiring more people to address new business needs, McRae said. In other cases, cross training employees may help fill necessary gaps. 

Check out our white paper: Learning Alignment in an Uncertain and Disrupted Business Climate

Certain disruptions, like the COVID-19 pandemic,  prompt organizations to feel the need to react right away and be short-sighted in the decisions they make, she added. But it’s important to remember that the immediate actions companies take with employees will have long-term consequences on how people view the employer and whether this workplace is viewed as one that cares about employees.

For example, redeployment programs — the process of moving employees to a different role in the organization rather than letting them go — will help contribute to a positive employer brand, McRae said. 

“Organizations that are doing this —  that are actively building redeployment programs and didn’t already have them before —  they’re going to be much stronger coming out of this recruiting talent than the organizations that don’t,” she said. “While it’s not possible for every organization necessarily to do this for all their employees, the more organizations look to find the degree to which they can, the more successful they’ll be.”    

Considerations for HR leaders

As organizations consider their headcount planning strategies, there are questions HR leaders can ask to inform decisions about the strategy. Depending on what catalyst event or disruption may happen, will it make talent more or less expensive? Will it change the skills the organization needs in its workforce? 

Sometimes macro changes that happen in the market don’t directly impact an organization’s demand for talent but still affect its workforce in some way, McRae said. For example, during a recession, even if the company is doing well, employees may feel anxious about their job.

The potential of predictive analytics 

Broadly speaking, predictive analytics allow organizations to collect and assess information on the external labor market. It can allow companies to get insights on what competitors are doing, McRae said. Maybe a competitor is hiring for new skill sets that would be valuable for any organization in the industry and could help inform their talent strategy.

labor analytics, people analyticsPredictive analytics may also allow organizations to identify where there’s room to explore new opportunities, she said. For example, an observation that remote work is becoming more widely acceptable can lead to a company being more open to hiring talent from different geographies. 

Also read: Labor analytics add power to workforce management tools

Other headcount planning tools

John Lacy, chief operating officer at Dallas-based technology marketing agency Idea Grove, said his organization is constantly working through these questions. It’s vital to ensure they have the right people with the right skills necessary to support the different services they provide clients.

Idea Grove uses several tools to help conduct this recurring analysis, Lacy said. 

First, they are rolling out the “open-book management” style of running the company, which essentially means that employees are engaged in the process of forecasting key numbers and that they ultimately share in whatever rewards the company earns from better performance. 

Lacy expects that this will help create a business full of employees who think and act like owners. 

“At that point, the client-facing personnel will start to take responsibility for ensuring we have the right number of people to service the business, as well as ensuring that we have the right amount of each skill required to service our clients,” he said. 

The organization also has a go-to pool of contractors that help serve clients when there are skills gaps to cover or when there’s more work to be done than expected. 

“Once we know we have the appropriate level of business to support a person full time, then and only then will we bring a person on board, full time, to cover that need,” Lacy said.

Andie Burjek is an associate editor at Workforce.com.

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