Q: Why is headcount planning so hard?
Keith: Despite the high stakes, we still use legacy processes and systems that are not responsive to the challenges of headcount planning.
Therefore, we end up with multiple spreadsheets that need to be updated manually, data silos across multiple systems and teams, and many unnecessary meetings to try to realign with HR, Talent, and department leaders.
Even when we try to create processes for the many approvals and inevitable changes that need to happen, they’re messy and scattered across multiple communication channels.
Q: What’s wrong with spreadsheets for headcount planning?
Keith: Obviously as a finance person I spend most of my time in spreadsheets. But things get tricky when we’re managing headcount plans this way. Let me give you an example.
Once a year, we create a headcount plan as part of our overall financial planning for the next year; that’s one sheet. Then, once a month we update our actual headcount numbers in a different spreadsheet.
We also meet with business leaders and recruiting teams to update our forecast (different spreadsheet), but a lot of times, by the time the forecast is published, it has become outdated.
We have additional spreadsheets for headcount reporting, recruiting metrics, candidate pipeline, and job req status, respectively. Anytime there’s a change, it affects a lot of different documents.
And let me take it a step further: even if folks out there aren’t buried in headcount spreadsheets, they likely have an alphabet soup of systems in their tech stack. There’s typically HRIS, LMS, performance management system, ATS, financial planning, and payroll systems, plus all the communication channels like email, Slack, and Notion.
Combining all the resulting data is difficult, let alone converting it into something usable, and may take just as much time, effort, and resources as doing everything in a spreadsheet.
Q: What would be an ideal solution for finance leaders?
Keith: The ideal headcount management solution would provide three main benefits.
1. Real-time visibility
We want to be able to track headcount as we would our sales. We need real-time insights into candidate volumes, conversion rates, cycle times, and turnover rates and the ability to share that information across teams.
We also want to know well in advance where headcount will land at the end of a month, quarter, or year so we can take corrective action.
2. Access to actionable metrics
We want everyone to know how the headcount process is going. In my experience, our team cares about certain questions:
- Is hiring for roles properly sequenced?
- Are staffing ratios tracking to plans?
- Have we properly balanced span-of-control? i.e. organizational and manager to IC headcount
- Are top strategic initiatives sufficiently resourced?
3. Automated workflows
We want to shift manual processes to advanced, automated workflows that capture changes to reqs, headcount, salaries, offers, and other information in real-time and push that data downstream to other systems.
Then, we could spend more time with business leaders, HR, and recruiting on more strategic headcount topics.