xP&A in Focus: A Critical Success Factor for Your Workforce Planning

The ongoing turmoil and uncertainty in the world today has accelerated a long-coming transition. It has awakened organizations’ need for strategic workforce planning solutions to manage a regular business and sudden changes to pivot, adapt, and thrive.

Fortunately, extended planning an analysis (xP&A) is positioned to meet these challenges head-on. xP&A, is an integrated and real-time planning approach that extends FP&A deeper into businesses by linking strategic, financial, and operational plans from all essential functions together.

xP&A is Not Just​:

• Anticipating the future​
• An inventory of all positions​
• Creating plans as a one-time event​
• Creating reports to analyze “what was”​

xP&A:

• Emphasizes longer-term contexts for short-term decision making​
• Focuses on granular role details proactively​
• Creates plans to respond to strategic and market shifts​
• Focuses on what “will be”

What is Workforce Planning

The idea of workforce planning is simple at its core: If the right people with the right competencies are at the right places at the right time, an organization can achieve its strategic and operational goals — leveraging human capital to ensure a workforce is in place to meet today’s needs.

Workforce planning highlights the “people factor” in achieving results. It does this by providing managers throughout an organization with a framework for making staffing decisions. These decisions are based on an organization’s mission, strategic plan, budgetary resources, and desired workforce competencies, and are made by identifying and addressing gaps in ongoing needs.

Questions to be Answered

While Human Resource (HR) Leaders are adept at planning talent at the headcount and cost-per-hire levels within business units (BUs), they struggle to integrate deeper to ensure alignment and integration between strategy, operations, and day-to-day tactics.

These questions include:

• How long does it take to train a new hire to be operationally effective?
• What percentage will need to be replaced and anticipated?
• Which factors influence turnover?
• Number of FTEs and skills and competencies of positions?
• Developmental & Certification needs?
• Training and development opportunities to develop critical skills?
• Budget for overall employee development? What results have investments produced?
• Significant risks in preparing to meet future workforce needs?
• Confidence in meeting workforce requirements in the coming year and the next three to five years?

xP&A Enhanced WorkForce Planning Leads to Answers

Workforce planning powered by xP&A is the missing piece that helps an organization plan talent at more detailed levels. This allows it to finally answer long outstanding questions and delineate hiring and staffing priorities.

xP&A allows HR Leaders to create transparency into skills needed within and across BUs to inform workforce plan creation and facilitate the dynamic transfer of skills within the internal labor market. Meanwhile, it prioritizes requests based on urgency and criticality to meeting strategic priorities.

In addition, with enhanced visibility, rapid-fire timeliness, and a linkage between needs and costs, HR Leaders can begin planning better using xP&A to determine how staffing needs affect:

• Organizational design and structure
• Number and kinds of skills needed at each level of expertise
• Number and types of teams
• Volume, type, and location of work
• Supervisor-employee ratios

That’s not all — Workforce Planning powered by xP&A also enables HR Leaders to:

• Maximize organizational effectiveness by integrating the organization’s mission, strategic plan, budget, technology, and human resources.
• Synchronize the workforce plan with other business plans — corporate strategy, financials, operations, departmental budgets, and forecasts.
• Prepare for contingencies that could prevent the organization from attaining its goals.
• Align organizational direction and articulation of measurable goals and objectives.
• Allocate resources to sustain operations and achieve goals.

Now, when the organization must shift to meet new demand and supply constraints, it can do so confidently. Questions finally have the forward-looking, detailed responses to answer the most critical business needs.

For instance, if a factory in Ohio starts production on a new line in 9 months, xP&A can assist HR in providing feedback to determine how many laborers and supervisors are required for each level of production, at which rates, applicable training-to-production lead times, and which retention programs will ensure the workforce is reliable and consistent.

Taking Action with xP&A in Workforce Planning

By utilizing xP&A in the workforce planning and review process, the needs and inputs of all functions are finally consolidated, assessed, and shared with a high level of confidence among decision-makers.

xP&A is the workforce planning tool we’ve waited for to drive integration and collaboration between various stakeholders, processes, and data streams — key to moving an organization forward by knowing which type of labor is needed where and when.

By embracing xP&A, HR Leaders will continue to play a critical role in developing an enterprise for the future, leading to thoughtful, well-timed, and resource-efficient growth, by ensuring their workforce plans are always up-to-date and aligned with their business goals.

Written by Ben Wann.

Extended Planning and Analysis (xP&A) is a new era of continuous enterprise financial and operational planning. Read this FP&A Trends paper for insights and recommendations on how to get started.

Learn about SAP’s planning solutions for xP&A.

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