Imagine you are the HR manager for a company with 200 employees. You started working with the company 10 years ago, when they were only 5 members of staff. At that time, it was possible to do everything manually, managing financial and growth strategies. With more employees, a manual system is ineffective. It is now essential to have a strategy in place, a headcount planning strategy. The growth of the workforce means a change in the direction of the company. The HR department needs to fall in line.

The best way to drive forward a company is to have a brilliant workforce. Managing the headcount within the organisation involves understanding people and making sure the resources to meet their needs are adequate. The key output of headcount planning is keeping within the allocated HR budget, while ensuring the right people are in the company to drive success.

The Headcount Planning Process

Headcount planning requires a process that reviews what is happening within the organisation, as well as how HR practices are being affected in the external environment. It includes the following: –

• Outlining the skills required by the workforce to ensure gaps are being filled.
• Creating strategies for developing client to meet the goals of the company.
• Ensuring that those recruited have the right skills that can further be developed.
• Creating room for mentorship within the organisation.
• Ticking all the above boxes, while remaining within the budget.

As has been mentioned, what is happening within the organisation needs to be considered. With a position management system, this helps as it determines the growth employees can experience within the organisation. With headcount planning, it is possible to evaluate internal changes with process innovations or technologies that have been developed.

Manpower Planning and Budgeting

Headcount planning has a whole host of challenges which can affect the budgets. This is because different departments will have varying criteria when defining a person within the work force. The HR department needs to begin its strategy by ensuring that all departments within the organisation are using the same parameters for measurement. This means that the criteria will involve both job roles as well as cost centers.

When planning for manpower and budgeting, ensuring detailed data is available for all employees may just be the ticket to making sound decisions. This data should include the following: –

• Type of employee, whether full time, part time, temporary or even short term contractees.
• Age of employee, as those close to retirement reveal a responsibility to the company and a potential future gap.
• Alignment of job positions with the financial departments.

Once aligned, the budgets can be allocated based on total funds, positions available, the law according to wage management, competitor analysis, workforce metrics, and ensuring all statutory reporting requirements have been met. Finally, the objectives for the business will come into play as this form part of the strategy. Headcount planners are key to driving success of any company and should be part of the step by step process.