Organizational Modeling Helps Meet
New Demands for Headcount Planning
and Budgeting
Current Challenges in the Workforce
Skill shortages, economic flux, competitive pressures, global competition
for talent, outsourcing labor, compliance legislation, aging populations —
these are just a few of the daunting challenges faced by human resources
management today.
The Evolving Role of HR
A PeopleFluent®
White Paper

The Evolving Role of HR | 2
As workforce dynamics grow more complex, the HR professional’s role
is shifting from administrative expert to strategic partner. Traditionally
administrative processes like tracking employee information and coordinating
compensation are now largely automated, which gives HR professionals the
opportunity — and responsibility — to play a bigger role.
New Demands on HR
The role of strategic partner comes with new expectations. Recent studies
show that leadership across industries and company sizes share very similar
perspectives on the future of HR.
CEOs want HR leaders to focus on bigger picture objectives and
understand business challenges.
Across the board, company leaders express concern that HR management
is “disconnected from the real needs of the business” and too focused on
tactical application of policies and programs (Human Resources Professionals
Association). In other words, the senior HR executive should be “a business
person first and an HR leader second.” Understanding the company’s P&L is
the key to maintaining a macro-level view of the business.
With a broader focus comes a clearer frame of reference for HR initiatives.
Experts on HR technology predict that HR departments will launch
results-driven campaigns that impact the entire organization. “HR
departments will become more focused on the outcomes of their actions —
the effect of what they do on the corporation versus the effect of what they
do on HR,” predicts Bill Kutik, technology columnist for Human Resource
Executive magazine.
HR professionals must be prepared to inform decisions by interpreting
comprehensive data.
Company leadership expects HR to forecast outcomes and provide actionable
insight, but only 20 percent of CEOs and managers say they currently get the
comprehensive data they need (PWC). The problem is not a lack of data but
the inability to gather and integrate it to provide an accurate overall view of
the organization.
Organizational modeling enables HR professionals to visualize the current
organization as a whole and efficiently test and compare multiple what-if
headcount planning scenarios to arrive at the best possible decisions. A
modeling platform replaces multiple spreadsheets and unsecured documents
filled with outdated information with a single, secure workspace integrating
the most up-to-date workforce data.
HR departments will
become more focused
on the outcomes of their
actions — the effect
of what they do on the
corporation versus the
effect of what they do
on HR.

The Evolving Role of HR | 3
Asking “What if...?” in response to different event triggers can mitigate
risk, reduce costs and better align decisions to strategies and objectives. With
the click of a mouse, HR professionals can see the costs and broad impacts of
a potential change for budgeting purposes.
HR management should be more connected to financial operations and
able to translate HR data into business terms.
Collaboration between HR and finance departments is taking many new
forms: shared analytics platforms, a growing number of HR chiefs reporting
directly to the CFO rather than the CEO and even the position of Chief
Resources Officer combining HR and finance functions. In any case, company
leaders are looking to both departments to play a bigger role in managing
growth (Workday).
Modeling and what-if scenario planning can help HR align with the
data-driven finance department and facilitate financial justification for HR
decisions. “You’re able to communicate the return on investment of your
talent initiatives in business terms as opposed to just workforce terms,” says
Yvette Cameron, research director for HCM technologies at Gartner.
A modeling platform serves as an intersection for HR and finance initiatives,
where both departments collaborate on budgeting and headcount planning,
internal reorganizations, reductions in force, mergers and acquisitions and
long-term strategic workforce planning.
The Tool for the Job
Modeling offers a single solution for multiple demands. Organizations
commonly use modeling in mergers and acquisitions as a single-use tool to
preview the impact of various plans before executing a major restructure.
Others use workforce scenario planning during annual budget reviews for
headcount planning, cost projections and creating new positions. And when
launching new locations, business units or other groups of similar style,
companies can save time by templating org charts with a modeling platform.
Used consistently, modeling allows companies to continually drive profitability.
Aberdeen Group found that 89 percent of best-in-class organizations have
long-term strategic workforce planning processes in place. While other
companies use modeling simply to react to immediate needs, top-performing
organizations use it to “look further out on the time horizon” and to “examine
alternate futures and multiple scenarios to help guide their near-term and
long-term workforce plans.”

The Evolving Role of HR | 4
The benefits of strategic workforce planning are substantial: organizations
achieve 51 percent more of their organizational goals within a given year.
As for bottom-line benefits, companies that employ workforce planning
experience 14 percent year-over-year improvement in revenue (Aberdeen
Group). The 6 percent increase in gross profit margin translates into $18.9
million in savings for every $1 billion in revenue (CEB).
The Ultimate Goal: Real-Time Insights
The rationale behind continual workforce planning is simple: plans become
obsolete quickly in today’s business environment. Without real-time data
organized by modeling, HR professionals risk being unable to execute a
well-planned workforce strategy as intended.
“Succession plans can consume weeks of management time only to be
discarded as needs change and people move on,” says Kevin Wheeler, founder
and director of Future of Talent Institute. “At the beginning of each year and
often each quarter, HR managers and recruiters pore over anticipated hiring
numbers that inevitably change significantly only days or weeks later. Hiring
managers are not certain what they will need or when they will need it, and
unannounced mergers and acquisitions invalidate months of work.”
To ensure real-time data and quick deployment of technology enhancements,
HR managers are now selecting cloud-based platforms almost exclusively
(Forrester Research). “The newer systems are designed for a pace of change
that the old systems could never imagine would happen, so in addition to
superiority of technology, there’s a superiority of functionality that in the end
is going to win the day,” says Kutik.
Real-time technology capabilities are useless, however, if the data is not
accurate. Data quality continues to be a major struggle for HR managers,
who need clean master data in order to make sound business decisions.
A modeling platform must integrate enterprise-wide data into a master
system that can effectively govern quality.
Enhancing the Value of HR
From major one-time transitions to annual budgeting and headcount
planning to continual workforce planning, modeling helps HR professionals
address a variety of business challenges. Company leaders expect HR
to play a bigger role within the organization — one that focuses on
enterprise-wide business objectives, informs decisions with data and
collaborates on financial operations.
The benefits of strategic
workforce planning
are substantial:
organizations achieve
51 percent more of their
organizational goals
within a given year.

The Evolving Role of HR | 5
Organizational modeling is invaluable to meeting these new demands.
Mapping workforce decisions to business outcomes provides clear and
measurable ROI on HR initiatives. And when internal and external changes
demand a quick response, management will be prepared. The key is
incorporating workforce modeling into the organization as a dynamic,
ongoing business process.

About PeopleFluent
PeopleFluent, the leading total workforce HCM technology company, redefines Talent
Management with an innovative Talent Engagement Cloud that is built around people and
not HR processes. By deeply integrating pervasive video, strategic analytics and collaborative
social technologies into its complete suite of Talent Management applications, PeopleFluent
redefines employee engagement to address productivity loss and diminished financial results
due to an increasingly disengaged workforce. With PeopleFluent, companies can change at
the speed of business without costly IT interventions through intuitive, highly configurable
software that is built upon the right data. Spanning across an organization’s entire global
workforce with one talent cloud, PeopleFluent equips leaders with the meaningful talent data
and strategic analytics necessary to make better business decisions.
PeopleFluent has worked with over 5,100 organizations in 214 countries and territories to
engage employees to drive better business results. Today, 80% of the Fortune 100 relies on
PeopleFluent as part of their talent management delivery strategy, helping them successfully
achieve their talent aspirations.
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