2024 Headcount planning is a huge strategic endeavour, and so much more than simply a “hiring plan”. For me it is the cornerstone of organizational strategy, shaping your workforce to navigate the complexities that await us in 2024 and beyond.
Headcount plans fail because HR and leaders alike simply don’t have enough context to inform their decisions. Without a full understanding of the business, the people, and it’s goals it’s all too easy to build misinformed plans.
- Inaccurate forecasting: Getting growth projections wrong in either direction creates performance challenges, budgeting issues, redundancies, or reactive hiring.
- Lack of agility: While appearing a little counterintuitive, robust planning improves adaptability. If leaders account for uncertainty, they are much better placed to deal with it.
- Hiring disasters: Knee jerk, reactive hiring with limited or no foresight results in the inability to hire or, worse still, the hiring of the wrong people. The damage caused by the latter from a financial and disruption perspective is enormous.
- Attrition and turnover: Having “good leavers” is as important as having “good hires”. Having robust plans and processes around turnover puts an entirely different lens on people leaving.
- Misalignment to business goals: This context and information are the foundations for planning. Without it, your planning efforts are fragile and flawed, with the chance of success greatly undermined.
Strategies for Success
Here are my practical steps and tips, to avoid the traps of failure:
Engage leadership as early as possible. Understand the current picture, forecast the company’s growth, or changes in business strategy that might impact workforce requirements. Work with functional leaders to identify skill gaps, develop new roles, reskill, or upskill talent, or add external hires to achieve strategic objectives.
- Tip – A SWOT analysis of existing resources and future needs is a simple but effective tool to get a needs assessment and the brain matter working.
Anticipate future demands aligned with projected growth, customer requirements, market trends, and business strategies. Planning doesn’t create a rigid direction; it gives you a foundation to be creative and adapt to whatever the year throws at you.
- Tip – This is another step where your SWOT analysis will come in handy!
Get in there early and give yourself a runway. Allow the time to build a comprehensive headcount strategy and supporting project plan to get ahead of the curve. This isn’t a once-a-year exercise, it needs to be dynamic and evolve as the year does.
- Tip – Use visual management, such as Gantt charts, to give the plan a visual identity and feel more tangible.
Financial Preparedness is crucial to avoid unwanted curve balls, especially with the pressure on cash burn we see right now. Align your financial resources and budgets to create accurate allocations. This should give you the confidence to execute a sound, well thought out plan.
- Tip – Model your costs accurately and realistically. Consider internal and external resources, time investments and operational downtime. It all has a cost.
Data driven planning harnessing people analytics to comprehend workforce trends, forecast talent needs, and optimise resource allocation will supercharge your planning. Evaluate historical turnover rates, length of service indicators, and anticipate potential attrition for the upcoming year. Look for trends and patterns that support your ability to anticipate. The data collected will be invaluable for your planning efforts now and in years to come.
- Tip – Link the headcount strategy and planning to tangible KPIs. Develop the right metrics and create a HR data dashboard that gives the reader instant visibility over the headcount plan.
Communicate the plan and progress against it. Act as transparently as possible, so people understand the objective, but also how it is evolving as the year develops.
- Tip – Break the mould of one and done, HR owned annual headcount planning, create an agenda of communication events throughout the year with key stakeholders to embed the dynamic nature of modern headcount planning.
Your 2024 headcount plan is the compass that guides your organisation towards strategic growth, talent optimization, and operational efficiency.
2024 won’t be without challenges. Those who foster agility, leverage innovation and technology, and nurture their talent are better placed to thrive. By embracing these practical steps and considerations, HR leaders can steer their organisations through whatever the year throws at us!