Dear Workforce: How to Tie Workforce Planning to Revenue?

Dear Workforce:

— Engineer Turned Human Resources Business Analyst, health care, Kansas City, Missouri

Dear Engineer Turned Analyst:

This is a very difficult scenario. Lay a foundation before diving into numbers and spreadsheets. Ask a few of your fellow business managers and human resources executives to provide advice and help when developing this plan.

Start by determining the organization’s attitude or philosophy toward talent. Is the company primarily interested in developing talent from within, acquiring experienced talent or in some hybrid of both approaches? Is it important to retain people or is turnover acceptable? What amount of turnover is acceptable? Does the organization want to hire college grads or only experienced people?

There are lots of other questions, but asking them should prompt your senior management to think about how people need to be regarded in your organization. The attached diagram illustrates this.

The next step is to match this philosophy to your business needs, which in your case is achieving proper staffing levels for a given level of revenue within a given time span. Experience with other functions in the organization should give you some baseline targets, or at least an idea of what number you will need to achieve. You'll have to factor in the time element and determine baseline minimal staffing levels as well as optimum levels.

Leave it to the business heads--although you can solicit input from them--to determine the amount of revenue each unit must generate. Once this is figured out, you can use past data regarding revenue per employee (assuming your organization has it) to extrapolate the number of people you'll need to hire. You'll need to make assumptions based on changing demographics, the impact of new technologies and the expense of recruitment and development when determining final numbers and costs.

Success is possible if you collaborate with others on the management team and use past data and experience to make projections. This should be a team effort.

SOURCE: Kevin Wheeler, Global Learning Resources, Fremont, California, July 13, 2005. The graphic is copyright Kevin Wheeler.

LEARN MORE: How to quantitatively measure whether your workforce is too large, too small or just right. Also: three items every organization should measure.

The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.