Fast-growing companies will face both new opportunities and new challenges in 2023. And as a finance leader, you’ll probably need to balance supporting growth and encouraging sustainable financial decisions.
While some teams are planning to reduce their headcount and re-allocate resources, others prepare to welcome new collaborators. But whether you're reducing or growing your headcount, finding the right headcount management tool can make all the difference.
In this post, we'll dive into:
- What headcount management software is
- The impact of headcount management tools for finance teams
- What finance leaders should look for in a headcount management tool
What is headcount management software
Headcount management software are tools that help key stakeholders to visualize their current team and manage headcount growth efficiently.
How? The best workforce management software goes far beyond a simple org chart.
A good headcount management tool will help you to:
- Track current & future headcount
- Forecast labor needs and spend
- Calculate payroll costs
- Track recruitment and onboarding processes
- Foresee skill gaps
- Centralize employee & candidate data
- Make headcount management decisions collaboratively
Wondering if this type of solution is just what your company needs? In the next section, we’ll dive into how headcount management tools can help enterprises & scaleups to achieve their team growth goals.
How headcount management software makes a difference
People are most businesses’ largest expense. And hiring the right people, at the right time, for the right positions can be decisive in your long-term success.
All companies can benefit from robust workforce management software, from bootstrapped startups to international enterprises. But headcount management tools are particularly useful for high-growth enterprises & scaleups.
In this section, we’ll explore how headcount management software can:
- Empower stakeholders to make data-driven decisions
- Improve operational efficiency
- Help contextualize headcount decisions
- Turn headcount planning into a collaborative & transparent process
- Monitor headcount spending
Let’s take a closer look.
Empower stakeholders to make data-driven decisions
It may seem like “data-driven” is an overused term. But making headcount decisions based on concrete data isn't as common as you may think. Especially since, in most cases, stakeholders have to look for that data across different platforms.
So, to guide headcount decisions in a precise way, financial teams often have to:
- Collect information across outdated spreadsheets
- Request information from busy teams
- Log in to and export data from multiple systems
A good headcount management tool will break down information silos, helping finance specialists to:
- Easily access the information they need to make financial forecasts
- Make sure they’re basing their forecasts and decisions on updated data
- Reduce time-to-insight
Additionally, the best workforce planning tools include powerful forecasting features that save tons of busy work. That way, financial teams can take advantage of large volumes of information, with little friction.
Improve operational efficiency
Headcount management software isn't only useful during hiring and layoffs. It can also play a key role in preserving a growing company's financial health in the long run.
A good workforce management tool will allow stakeholders to maximize the efficiency of their headcount spend by:
- Giving them a clear view of their current employee roster
- Helping to spot skill gaps & redundancies across the organization
- Bringing visibility to hiring & attrition trends
- Aggregating compensation & benefits data
- Comparing actual HR changes to financial plans & forecasts
Maximize collaboration across the hiring process
As a company grows, it's common for the hiring process to start involving more and more people. But, when this process isn't kept in check, stakeholders end up feeling that their hiring workflow is "all over the place". And in that chasm, finance is often kept out of the loop, which results in:
- Headcount decisions that don't align with the company's current financial strategy
- Inaccurate financial forecasting
- Financial uncertainty & budget variance
That's where a good workforce planning tool can help. With the right tool, your talent and HR teams will be able to:
- Standardize and streamline your hiring
- Optimize how data is managed during onboarding and offboarding processes
- Involve all relevant stakeholders, providing them with the data they need
- Keep stakeholders aligned around headcount decisions
Contextualize headcount decisions
The best headcount planning tools aren't just a collaboration hub, they're a source of truth.
That's because they centralize and reconcile data from different platforms, to offer true visibility into the reasoning, supporting insights & needs behind headcount decisions. Additionally, they allow finance specialists to keep other stakeholders updated on their budget and financial plan.
This type of visibility is key for fast-growing teams aiming for sustainable and intentional hiring. Mainly, because it makes it easy to understand:
- What priorities motivate different stakeholders
- The reasons behind hiring strategy changes and budget variance
In short, these tools help you see the big picture and keep everyone aligned.
Monitor headcount spending
Workforce planning tools help teams to:
- Stay in control of headcount spend
- Reduce budget variance
- Align headcount planning and budget
Consequently, with a good headcount planning tool, teams can reduce uncertainty and prevent unforeseen headcount expenses. Plus, they can make sure that their hiring strategy can be executed in a financially sound way.
Choose a headcount management tool that allows you to forecast future headcount in a detailed and well-segmented way. You'll want to be able to:
- Visualize the status of ongoing hiring processes
- Intervene and advise on hiring decisions
- Access enough data to analyze the financial and operational impact of each new hire
How to choose the best workforce planning tool: 5 features to look for
We’ve already explored what a headcount management tool is and how it makes a difference. So, let’s dive into 5 features to look for when considering your options.
We recommend you choose a headcount planning tool that offers:
- Integrations
- Intelligent forecasting
- An intuitive UI
- Collaborative features
- Data security
Integrations
Choose a tool that integrates with your current HRIS and ATS platforms. If you don’t know which tools they use, connect with your HR team and ask about their stack. What tools are essential to their work? What role does each tool play?
By using a workforce planning tool that integrates with your HR stack, you’ll guarantee a constant inflow of relevant, updated data. Additionally, you’ll be able to automate data collection across platforms.
In short, the right integrations will be essential to:
- Build automated workflows
- Maintain data hygiene
- Break down information silos
- Forecast accurately
Intelligent forecasting
Choose a workforce planning tool that aggregates the data you need to make forecasts and helps you to process it.
This data should probably include:
- Current employee count and approved hires
- Active hiring processes
- Approved spend
- Burn rate
- Budget variance
- Median salary
- Average cost per hire
Collaborative features
In many cases, finance teams end up relying on outdated HR data because there isn't an easy way to automatically communicate changes to the financial team. Additionally, without a shared platform, financial teams may find it hard to align talent acquisition efforts with budget allocation changes.
A good workforce planning tool can change that. Look for a platform with:
- Real-time collaboration features
- Access control
Real-time collaboration features guarantee that no important information gets lost in Slack messages or endless email threads. Any changes can be instantly recorded on the teams' centralized database. Additionally, with real-time collaboration, you can catch decisions that may jeopardize the financial or hiring strategy, as soon as they're made.
Access control, on the other hand, keeps sensitive data secure while making sure the right people can utilize it. Plus, you can give different stakeholders the info they need, without having to duplicate files or export data into spreadsheets. Consequently, everyone will be working with updated information, at all times.
An intuitive UI
You'll want your workforce planning tool to be adopted across teams. As a finance leader, you may be used to complex interfaces, dense with information. However, if you want this tool to be used beyond finance, it’s important to choose a platform with a very accessible interface.
Choosing a tool with a clean and easily understandable UI will:
- Maximize the possibility of company-wide adoption
- Prevent you from spending time and resources on training team members to use the tool
Aside from a simple interface, you'll want a platform with:
- Clear documentation
- An intuitive onboarding experience
Thanks to those elements, you'll be able to hit the ground running and see a positive impact from day one.
Data security
Last but not least, your workforce planning tool of choice should be secure.
At the end of the day, it’ll gather tons of highly sensitive information about your people & finance. So, we recommend you look for a tool that meets SOC 2 Type II security standards or similar requirements.
Key takeaways
In this post, we shared everything you need to know to choose the best headcount planning software for your company.
From Newsela to Docker, HoneyBook, and Postman, innovators choose TeamOhana to make their headcount management operations more transparent and predictable.
With TeamOhana, you will:
- Save up to 35+ hours of manual work per month
- Significantly reduce headcount budget variance
- Keep HR, talent & finance aligned with real-time data and 0 headcount spreadsheets
Schedule a demo today and discover a better way to manage growth.
