It’s all due to COVID-19’s turnover crisis — the Great Resignation, or what we like to refer to as the Great Reprioritization, which speaks more to the cause versus the symptoms. Whatever you want to call it, it’s a phenomenon that’s widespread and undoubtedly will impact your headcount planning.
The New York Times’ senior economics correspondent Neil Irwin says the Great Resignation has actually been in the works for years. While vacancies and wages are rising steadily, population growth is stagnating. Together, these factors create a labor market that finally favors employees. “For the first time in a generation, workers are gaining the upper hand,” writes Irwin.
And so, employees with means are taking extended breaks from the workforce. Others are actively seeking better opportunities for higher pay, more flexibility, and better prospects for growth. As a result, organizations can no longer reliably predict job turnover, and that unpredictability is making life difficult for HR managers. Fortunately, headcount planning is a helpful tool for managing that uncertainty.
Headcount planning is an HR strategy that builds the workforce the company needs to accomplish its objectives. An effective headcount plan provides a roadmap to hire, train, and promote employees. And in a tight hiring market, headcount planning can help HR teams hold onto employees and reduce the impact of turnover from the Great Resignation.
When you lead headcount planning, you create strategies to attract new talent, retain your existing employees, and prepare for inevitable employee exits. Here are actionable headcount planning tips you can use to achieve these objectives – and get ahead of the Great Resignation.
How to Confidently Approach Your 2022 Headcount Planning
Create a Connection Between Employees and the Company
For your headcount plan to be effective, you must retain the employees you hire — and fostering strong connectivity is vital for retention.
Gallup’s post-pandemic workforce survey finds most employees prefer organizations who care about their well-being. Further, the Work Institute’s 2021 Retention Report identifies stress and workload as among the main reasons employees left their jobs at the end of 2020.
Fortunately, there’s a simple way to address possible challenges in the work environment while also gaining deeper insight into your headcount needs: speak to your people.
Ask whether employees feel they have enough time and resources to successfully do their jobs. Maybe you’ll find you need to bring on more team members or adjust project timelines to prevent burnout, thereby improving retention. Mark Stelzner, the founder of management consulting firm AI, says companies should prioritize communication during the Great Resignation. “Ask for what can make them more comfortable or supportive. Talk to your people.”
One of the best ways you can ensure these conversations happen is to formalize communications at all levels of the organization, for example through executive meetings, manager meetings, company all-hands, team meetings, 1-1s with managers and employees, Slack and email messages, and company intranet announcements. Best practices for these communications include:
- Host frequent all-hands: At ChartHop, we do a one hour weekly all-hands meeting featuring a rotation of department updates, celebrations of new hires and employee milestones, and key company announcements.
- Have an agenda for every 1-1: Ask direct reports to fill out a 1-1 template prior to meeting with their manager. This template should focus on accomplishments, challenges, and areas of focus for the next week.
- Get interactive with team meetings: Always have an agenda for team meetings and consider opportunities to rotate hosts, bring in guest speakers, create brainstorming sessions, and work in break-out groups.
- Map out monthly events: Create opportunities for employees to connect on different levels, for example through cross-team 1-1s (think of it like a virtual coffee), small group meals, and team social events (at ChartHop we assign Social Captains to own these quarterly).
- Do off-sites (post-COVID): Get the company together twice a year. It’s a big investment, but it has a big payoff. These off-sites should focus on connections versus presentations. You can also consider opportunities for quarterly team offsites and leadership offsites.
- Train in small groups or with breakouts: Learning together is a shared experience, but also a great opportunity to make connections intentionally. Keeping groups small helps facilitate these connections.
- Hold a Monthly Manager Forum: Encourage these cross-team peers to be a unit.
- Use tools to enable insights and transparency: We use ChartHop to enable people to understand their teams and collaborate virtually on key actions like org planning. We also automatically push key updates like org changes, KPI progress, team shout-outs, birthdays, and anniversaries to dedicated Slack channels.
- Make onboarding high-touch: Assign new hire buddies, give a pre-start checklist, do Jump Start calls on day one, and record dense training material, that way orientation can be about meeting people in addition to learning key processes and product information. Be sure to hold 30/60/90 day check-ins as well to keep a pulse on progress.
You might also consider flexible work arrangements to improve retention. HR research by Gartner finds that 55% of employees said the option to work flexibly would influence whether they stay with their organizations.
Tsedal Neeley, professor at Harvard Business School and the author of “Remote Work Revolution: Succeeding From Anywhere” says: “Companies can leverage flex time, the greatest gift that remote work offers. To be able to say in job searches that ‘mode of work is flexible’ will help attract and retain workers.” Importantly, headcount plans that prioritize flexible arrangements may need to account for home office expenses or coworking stipends.
Invest in Skills Development for Current Employees
Creating a strategy to develop existing employees’ skills is more cost-effective than hiring talent to plug critical gaps, so your team should always look for opportunities to upskill your current employees before bringing new team members on board. Doing so means you’ll hire more efficiently and your employees will see a future for themselves at the company; it’s a win-win.
Additionally, there’s growing evidence that people are walking away from their jobs because of limited career advancement. For example, the results of the Achievers Workforce Institute’s 2021 Engagement and Retention Report show a lack of growth opportunities as the main reason employees are disengaged. And disengagement, in turn, is linked with higher turnover.
That’s all to say, when your headcount plan prioritizes skills development for existing employees, you serve both company and employee needs. A 2021 LinkedIn study finds that your employees are more likely to stay if your company provides high internal mobility. In its analysis, the Human Resource Planning Society suggests nurturing employees is a critical part of headcount planning:
“(Strategic workforce planning) is necessarily focused on meeting the organization’s needs. However, it can and should simultaneously focus on the needs of the workforce. Given the shortage of critical skills and the societal implications of allowing large groups of workers to get left behind, it is imperative to consider the workers’ perspective and strive to meet their developmental needs to the extent possible.
Here are the three steps you can take to develop your employees:
Identify skills, knowledge, and experience
Evaluate the workforce’s current skills against your company’s goals and your industry’s trends. Deloitte recommends HR managers check how COVID-19 changes skills requirements and which talent gaps need addressing. Specifically, assess what competencies your company needs in the post-pandemic workplace. Perhaps the sales team has to manage customer relationships in a fully remote setting. Or maybe your professional services team wants to shift from consulting to “productizing” its expertise.
In general, your team should have conversations with employees to evaluate their skills. One way to do this is to create a task-based description of the employee’s role, list the skills they use to carry out these tasks, and review which skills are lacking.
One of the most important steps you can take here is to introduce a review cadence that allows for continuous feedback and frequent assessments of growth and performance. For most teams, a quarterly review cycle is the best way to accomplish this objective.
Centralize skills data and communicate career mapping
Create a centralized skills database so your company has a single source of data to inform skills programs.
Many HR tools let you bring skills data into one platform. This means you’re rooting personnel decisions in business-wide data and the company roadmap, not based on gut feel. It also makes it easier to share skills plans with other business leaders and team leads.
Along the way, your team should develop career mapping so employees have a clear picture of growth opportunities, including definitions of what it means to level up within the company. As you do so, it’s important to remember that growth will look more like a rock climbing path that zigs and zags on the way up versus a ladder with each rung directly on top of the previous one. This situation makes it especially valuable to have tools that can make skills and career mapping data accessible for all employees.
Create professional development plans
Develop career paths for employees so they understand what opportunities for growth are available to them.
Professional development plans differ from employee to employee. For example, you may earmark employees for leadership positions through succession planning. Succession planning prepares internal candidates to fill key roles in the company, specifically for c-suite roles. Adopting this approach can help you deal with a number of challenges associated with the Great Resignation. That’s because if you devote time and resources to your employees’ growth, you’ll have a pipeline of capable leaders to step in when an executive leaves the company.
Beyond plugging crucial talent gaps, succession planning shows other employees your organization is a place to grow and advance their careers. In short, succession planning gives employees another reason to stick with your company.
But not every employee has an eye on the c-suite. In such cases, the organization can help people hone their craft and learn new, related skills. For instance, this might involve investing in professional development initiatives, like manager-led training and education stipends.
In either case, calibration discussions are a critical part of the review process to ensure everyone gets assessed fairly. These discussions can also help your team better understand the talent at the company and what each person wants in terms of growth. This approach requires your team to work closely with frontline managers during these skills development efforts. LinkedIn Learning’s 2021 Workplace Learning Report finds 49% of learning and development professionals partner with managers for skills-building projects:
“That (partnership) makes perfect sense because managers are responsible for the performance and growth of their teams. More specifically, we have heard from our customers that they are focusing on upskilling managers to have higher-quality, meaningful career conversations with their direct reports.”
Keep Your Compensation Package Competitive
Your people are your organization’s most significant financial investment: a headcount plan must account for the costs of salaries, training programs, equipment, and more. That’s why you need to align your post-COVID-19 headcount plan with fair, competitive rates.
A 2021 PwC US Pulse Survey of more than 600 employees indicated higher wages as the number one reason they would leave a job, meaning organizations that don’t provide competitive compensation packages are more likely to see increased turnover during the Great Resignation.
To stem these losses, make sure your compensation package is market-related. Companies must perform salary benchmarking to “avoid crucial losses” during the Great Resignation, says CEO of Technically Media Chris Wink. Use tools like PayScale and O*NET OnLine to perform a salary benchmarking exercise. HR teams should also develop pay strategies specifically for remote and hybrid teams. Such post-COVID-19 compensation plans account for how location impacts salaries and total rewards packages.
During this stage of the headcount planning process, collaborate with finance to connect the headcount plan to the company’s financial planning and analysis (FP&A). Sharing the headcount plan with finance allows you to consolidate HR data and financial data and accurately forecast the costs of hiring, promotions, and merit increases.
Plan for Any Scenario
While it’s possible to retain many of your employees, some turnover is impossible to avoid — and it can also be healthy for your organization in certain cases. Headcount planning allows you to prepare for these potential employee exits.
This type of preparation is essential to get ahead of the Great Resignation with minimal disruption to the business. To start, build turnover scenarios into your headcount plan. First, determine the questions you’re trying to answer, such as what the product team will look like if you lose three product managers.
Next, walk through these “what-if” situations with managers and other business leaders to understand the impact of potential departures. For instance, how will the loss of top customer success managers affect client relationships?
Finally, create alternative hiring and training plans based on those scenarios. Mario Peshev, CEO of DevriX and founder of Growth Shuttle, encourages companies to be flexible during the Great Resignation: “Losing key talent may leave you vulnerable with your current roadmap in mind, but being flexible when it comes to future plans may reveal new possibilities or ventures you can bootstrap internally.”
As a bonus, planning for multiple scenarios in this way also ensures you’re better prepared for changes in the broader economy.
Ready to Update Your Headcount Plan to Guide Your Org Through the Great Resignation?
The post-COVID workplace is unpredictable, and your headcount plan must acknowledge this new landscape.
Investing in a headcount plan helps you get ahead of job turnover and build a skilled, satisfied, and engaged workforce that’s ready to deliver on your company’s goals. Not only will a successful headcount plan see you through the Great Resignation, but your company will also come out stronger on the other side.
Use headcount planning to grow intentionally and plan for every scenario. Get ChartHop’s guide on how to confidently approach 2022 headcount planning to learn more about what it takes and get started today.