Workforce planning support means that you and your team are responsible for the forecasting that allows you to properly plan for your recruitment advertising and marketing spend, requisition workload, and expected deliverables based on organizational goals. When forecasting, we try to predict what the marketplace is going to look like in one, three, and five years for our particular industry. The pandemic has changed the recruiting forecasts of most industries, as companies struggle to reopen with enough workers to support the demand for products and services. But what do you do when the budget you have to work with is not enough to support your recruitment efforts?
Why Workforce Planning and Budgeting are Important
As an HR executive and strategic partner, your role in workforce planning is at the heart of what really matters to your company leaders. Effective workforce planning enables your organization to:
- Align workforce requirements directly to your company’s strategic annual business plans
- Develop a comprehensive picture of where gaps exist between competencies the workforce currently possesses and future competency requirements
- Identify and implement skills gap reduction strategies
- Make decisions about how best to structure the organization and deploy the workforce
- Overcome internal and external barriers to accomplishing strategic workforce goals
The last item on the list is what many of us are facing right now. We’re presenting our open jobs to candidates and we know how many positions must be filled, but recruiters are up against companies that are raising starting hourly wages and offering other perks like sign-on or stay bonuses that are attractive to candidates. This external barrier – what our competitors offer that we currently do not – is at the heart of why you and your team have to present to company leadership to get the recruiting budget you need in order to compete for candidates.
How to Present a Business Case to Drive Results
Demand for talent means that HR and recruiting leaders must balance the cost of higher pay against the cost of lost sales due to vacant positions. While it varies by industry, cost of vacancy (COV) can be estimated using the company’s revenue per employee (the company’s total revenue divided by the number of employees) and dividing it by the number of working days in a year (220). This gives you the average revenue produced by an employee on a daily basis.
When presenting a case that identifies the need for a higher recruiting budget or other internal changes (like an increase in starting wages), it’s important that your presentation is tied into your company’s bottom line metrics, specifically the cost of vacancy and the cost of turnover. Consider the following when you’re presenting to your company leadership:
Be prepared to back up your numbers.
You can be sure that a CFO will want to know the logic behind your calculations and which recruitment metrics you chose to track. If you’re using your presentation to “show your work,” you’ll want to be very comfortable talking about where the data came from, how it is relevant, and how it shows a direct correlation to your recruiting efforts.
Show market benchmarks.
Industry benchmarks can help give your leadership team an idea of how your organization ranks comparatively. Your competitor analysis should include regional and national benchmarks based on solid evidence. SHRM is a great resource for industry benchmarks in recruiting.
Have a realistic rollout plan.
Once you present a competitor analysis and identify where your company is falling short, your proposal should include what your company is realistically prepared to do. Many organizations have suffered a financial toll from the shutdown due to the pandemic, which means they have tightened the company budget in order to support other areas of business. If increasing the starting wage your company offers comes at a cost that isn’t viable, be prepared to work with stakeholders on what you can do that is viable, what the timeline for full rollout looks like, and what the impact of being able to hire best fit candidates will be on the bottom line.
Keep it simple.
Include an executive summary and an offer to follow up with more complex data. You don’t want to present to a room full of busy executives by reading from a lengthy Powerpoint presentation. Topline items are key, with slides to back them up that your leadership team can focus on after your presentation.
Have several “plan Bs” going into your presentation. If raising the starting wage isn’t an option, how about offering perks like flex scheduling, more PTO, signing bonuses, benefits, and so on. What changes can you make to recruitment marketing that will help you stand out from your competitors?
Finally, understand that this will be an ongoing dialogue with your company leadership. One presentation and a thumbs up from your stakeholders isn’t going to get you from A to Z. Track data points from when you began offering something new (higher wages, better perks) to candidates, including offer acceptance rate and – for the longer term – new hire retention and performance after the first 90 days.
If a small increase moves those numbers in the right direction, is it scalable? Will a larger increase move them even higher? Showing causation and correlation is going to be central to continuing the dialogue with company leadership and getting the allocation of funds that you and your team need to successfully reach and hire candidates.