4 Talent, HR, and Finance collaboration best practices to streamline your headcount planning

Struggling to make your headcount planning truly collaborative? In this post, we’ll dive into the most common cross-team collaboration challenges and how to overcome them.
min read
May 29, 2023

A good team is key to a company’s success. And on average, people make up 70-80% of a business’ recurring expenses.

As your company grows, your team grows with it. And this growth should be planned and managed sustainably by three key teams: HR, Finance, and Talent.

But it’s easier said than done. Outdated data and unclear approval chains are two of the many challenges that can make collaborative headcount planning nearly impossible.

In this post we’ll share:

  • The 4 most common challenges talent, HR, and finance teams face when collaborating on headcount planning
  • Best practices to overcome each challenge 

But first, let’s answer a very important question: Why is cross-team collaboration important for headcount planning?

Why Talent, Finance, and HR collaboration matters for headcount planning

According to a Gartner survey, 70% of CEOs expect their CHRO to play a key role in business strategy. And it’s easy to see why. With people making such a key difference and demanding such heavy resource allocation, headcount becomes a strategic priority.

The ownership of the headcount planning process varies from organization to organization. In most companies, the Finance team takes the lead in headcount planning and involves the Talent team and hiring managers as key stakeholders to execute the plan.

Meanwhile, HR and Talent play a key role in everything from detecting staffing needs to offering professional development opportunities to existing employees. And without the HR and Talent teams’ guidance, talent acquisition and retention are impossible. 

But without the Finance team’s proper involvement in headcount planning, talent acquisition won’t be:

  • Analyzed based on a sound recruiting budget 
  • Aligned with the company’s financial goals

This could result in:

  • Overhiring, which can lead to inefficiencies or budget overruns
  • Poor resource allocation, which can prevent your company from hitting goals or taking advantage of opportunities

To avoid these scenarios, it's important for Talent, Finance, and HR to collaborate closely on headcount planning. By working together, they can ensure that the company has the right number of employees with the right skills at the right time, while also staying within budget and meeting business goals.

In the next section, we'll explore the most common challenges that arise during cross-team collaboration on headcount planning, and share best practices for overcoming them.

4 Talent, Finance, and HR collaboration best practices for efficient headcount planning

A proper headcount plan, involving all key stakeholders from the beginning, can help you stay ahead of the new hires' management and make better budgeting decisions.

But it’s far easier said than done. It’s not uncommon for teams to struggle with:

  • Outdated & inaccurate data
  • Misaligned objectives
  • Unclear roles and responsibilities
  • Resistance to adopting new processes

These challenges can be overcome by:

  • Consolidating data into a single source of truth
  • Providing visibility for all stakeholders to stay informed and aligned
  • Establishing a clear governance structure involving the HR team earlier in the process
  • Providing detailed insights that help guide the business and its leaders on better planning

Challenge: Outdated & poor headcount data

It's difficult to make informed decisions and plan for the future when the data you're working with is inaccurate or out of date. And this is especially true when it comes to headcount planning.

As Krishna Vallebhenani, the VP of Finance at GRIN, put it: “The longer you let something get out of sync with reality, the more likely you are to make mistakes.”

And, at the very least, you’ll need updated data any time you need to:

  • Hire new team members
  • Redistribute or assign budget between different areas
  • Set or track headcount-related goals

This data can be found and compiled if you invest enough hours in it. However, keep in mind that this is a manual process that involves multiple systems and spreadsheets and relies on someone manually updating this data. And despite their efforts, you’ll probably end up with messy and unreliable data anyway.

This is already a time-consuming process. Now imagine having to go through it every time you need to update anything from budget allocation to headcount forecast. This happens to HR, Talent, and Finance teams on a daily basis. 

Yet, as exhausting and time-consuming as it is, manual work is the standard approach for these teams.

Best practice: Consolidate data into a single source of truth

Not having a consolidated source of truth for data is a typical mistake for startups. However, it shouldn’t stay that way as your company grows.

Providing full visibility and control over headcount data for all key stakeholders is key to streamlining processes.

That’s why we recommend implementing a collaborative headcount management platform that allows you to:

  • Consolidate all headcount-related data, through powerful integrations with your current stack (including ATS & HRIS platforms)
  • Provide real-time updates to all stakeholders

This ensures that everyone is working off the same data set and can make informed decisions about hiring, budgeting, and resource allocation. Additionally, the platform can automate manual processes and provide customizable reports, freeing up time for team members to focus on strategic planning and collaboration.

Challenge: Misaligned objectives

When HR, Talent, and Finance teams have different goals and priorities, it can be difficult to make headcount decisions that benefit the company as a whole.

But the conflict doesn’t end there. In fast-paced environments, objectives are bound to change. Besides, it’s not uncommon for teams to shift their priorities without properly communicating them to the rest of the stakeholders.

Unfortunately, this is a very common situation for many companies. My Doan Cong (VP of People at Alt) has a very relatable experience in this regard. 

“There would be what I call ‘trust gaps’ between departments. I would’ve approved this, and then Finance didn’t agree. Or Finance would approve this and I didn’t know about it.” 

The lack of alignment between both departments’ goals not only hindered decision making, but also resulted in the creation of parallel processes and records with contradictory information. As we said before, this is a challenge of its own. In My Doan Cong’s case, each department ran all of their headcount planning on separate spreadsheets, to which she concluded, “Finance and I would make almost two different headcount processes at the same time.”

Best practice: Provide visibility for all stakeholders to stay informed and aligned

Meet with stakeholders regularly and set a list of common goals. It should be easy for HR, Talent, and Finance to align. At the end of the day, they’re working toward complementary objectives.

In this sense, Florian Gendeau, Head of Finance at Novo, says that good meetings are underrated.

“Conducting the meeting in a way that's productive is very, very important and will make the difference between a good and bad headcount process.”

However, to really leverage meetings, those common goals must be reflected in your day-to-day processes. This way, it would be easy for team leaders to communicate changing goals. You can achieve this through:

  • Your headcount management platform
  • A dedicated Slack channel
  • A dedicated monthly, or weekly email thread

Challenge: Unclear roles and responsibilities

Especially when large teams collaborate, it can be difficult to keep track of who has ownership over which aspect of the process.

This obstacle can have what seem like mild consequences but are, in fact, costly delays. For instance:

  • Unapproved headcount, as no one seems to have the ultimate responsibility to approve the hiring.
  • Losing track of roles, resulting in duplicated efforts and inefficient use of resources. This also results in team members sitting around waiting for other people to update spreadsheets, which leads to the next issue.
  • Not tracking important data, resulting in missed deadlines, and a lack of compliance. This may also lead to a waste of resources later on when trying to fill that information gap.

As you can see, they all result in hiring slowdowns and, on a larger scale, missed business goals. 

Best practice: Establishing a clear governance structure

Establishing a clear governance structure that outlines the roles and responsibilities of each team involved can help streamline the headcount planning process. This can include:

  • Defining who has decision-making authority in each team
  • Developing a standard process for headcount planning and approvals
  • Creating a timeline for each step of the process
  • Assigning specific tasks and responsibilities to team members

By establishing a clear governance structure, everyone involved can feel confident that they know what is expected of them, and they will collaborate more effectively to achieve the company's headcount goals. And most importantly, you'll make sure that all the right procedures are followed.

Challenge: Resistance to adopting new processes

You could come up with the best, most effective headcount planning process imaginable. But if you’re not providing stakeholders with the right data and insights, they won’t get very far.

Most likely, business leaders are not trying to sabotage your plan. After all, they are also pushing for the best use of the company's resources. Instead, they just lack the motivation to even open the conversation. 

If they don’t have the information to perceive the potential value of changing the current processes, they will be held back by trivial challenges like:

  • How long it’d take them to adopt the new processes
  • How overwhelming the tools you chose are
  • Technical difficulties they could face

Best practice: Provide detailed insights that help guide the business and its leaders on better planning

Don’t try to impose a new workflow on the rest of the stakeholders just because it works for your team. Instead, you should open the conversation with a focus on business improvement. What does this mean? Providing stakeholders with rich insights and data about the anticipated impact of the new workflow on business planning.

This is especially important if you’re collaborating with a team that has been working the same way for a long time. Any new process would be a tough sell in this scenario.

As Keith Mesuda, VP of Finance at Modern Treasury, said:

“Despite the high stakes, [Finance leaders] still use legacy processes and systems that are not responsive to the challenges of headcount planning.” 

To have a better understanding of what business leaders would find valuable, you can also take a moment to connect with them. Inquire about each team’s specific challenges and which solutions they’ve tried in the past. Analyze why they didn’t work, and how helping them solve these issues will positively impact you as well.

With all this information gathered, you can:

  • Leverage time-saving automations
  • Avoid redundant steps
  • Integrate with existing tools and systems
  • Offer training materials for new tools
  • Go for a tool that offers useful features for all stakeholders
  • Gravitate towards tools with a smooth learning curve

The platform that makes Talent, HR, and Finance collaboration possible

In this post, we covered 4 common Talent, HR, and Finance collaboration challenges and 4 best practices to address them.

Most of the challenges we covered can be best addressed by adopting a people management tool like TeamOhana. 

TeamOhana allows Talent, Finance, and HR to turn headcount management into a collaborative and easy-to-track process, driven by accurate data. With TeamOhana, you will:

  • Stay on top of KPIs
  • Plan headcount scenarios 
  • Perform accurate headcount forecasting
  • Prevent knowledge silos, through integrations with your existing HR, Talent & Finance stacks
  • Get useful insights on headcount budgets, in real-time
  • Manage headcount compensation data
  • Monitor headcount requests and changes
  • Get a full overview of your hiring pipeline 

Take control of your headcount plan. Schedule a TeamOhana demo today

To learn more about TeamOhana and strategic headcount management, contact us.

Painless headcount planning for modern companies.