Developing a strategic approach to workforce management

For any business to thrive, senior managers must take a long-term and thoughtful approach to recruiting, retaining, engaging and training their employees. 

At all companies, finance plays a crucial role in helping the rest of senior management understand the costs and benefits of workforce decisions, but at smaller SMEs, the finance director will often take on a wide range of operational roles, including many HR activities. So it’s crucial that those looking to forge a finance career in business are aware of how beneficial workforce management can be.

“Organisations need to have a clear understanding of their existing skills, their gaps and what skills are required for their future,” says Claire McCartney, Senior Policy Advisor, Resourcing and Inclusion at the CIPD, adding that “this can be challenging for organisations firefighting staff shortages.”

A cross-functional team should make up the workforce planning committee, which will decide on how to best retain and train staff or when and whether to recruit new hires. At the very least, finance will have to help the business understand the costs of recruitment versus retention, the return on investment of training and development programmes, and the full cost of employing new recruits and incorporating them into cash flow forecasts. 

A strong employer value proposition

Establishing and developing a strong employer brand is a key aspect of this workforce planning. Employers must consider what they offer existing and prospective employees and how this makes them stand out from – or lose out to – their competitors. 

“A good place to start is by looking at your current employee value proposition and the messaging that accompanies that,” says McCartney. “Find out what is most valuable to your employees, which benefits make a difference, and at what stage in their lives, she says.” 

The CIPD’s Good Work Index outlines what people value from a job, from pay and benefits to work-life balance and well-being. Finance can also play a part here in helping companies articulate the total value of their package. “Organisations can miss a trick by just stating the gross salary plus benefits. Finance can help you calculate the full value of a package and what those additional benefits like healthcare, generous holiday allowances and death in service amount to in monetary terms,” says Gareth John, Chairman and Director of First Intuition and a member of ICAEW’s Education and Training Board.

Employers must also remember non-financial considerations, with people increasingly setting store in working for an organisation with purpose. “Younger adults, in particular, are interested in social objectives,” says John. “So organisations must be much clearer about their values and to demonstrate they authentically care about these. This will help to attract young adults and, if they see the values are lived in action, it will also help to retain them.”

Clarity of job requirements 

Once the strategy is agreed, managers must draft well-defined job descriptions and a clear outline of the behaviours they’re seeking. This will inform the development of existing staff and provide clarity when recruiting new hires. Stephen Howes, Regional Director of Michael Page, says, “It’s about developing a framework that gives sufficient boundaries so that you’re clear on what is needed, but that is not so rigid that you miss out on identifying ideal candidates.

“It comes down to understanding what your red lines are in terms of the technical knowledge and interpersonal skills required.” Internal alignment between different stakeholders is key. Howes adds, “We often find there is conflict between what different stakeholders want from given positions. Typically, this comes down to not establishing those red lines on key requirements.”

Recruiting

When advertising vacancies, start by understanding what communication channels work best for your firm. “Having multiple channels of outreach generally helps you access a wider pool of talent,” says McCartney. “You also need to evaluate the effectiveness of those channels for different roles to have some data behind what you’re doing.” Timing is another critical element, especially if the organisation is looking to recruit college leavers or graduates and there is a wider recruitment cycle to tap into.

The assessment process itself should be specific to the role being recruited for rather than being carried out because it has ‘always been done that way’. Employers must also remember the candidate’s needs. “Interviews are very much a two-way process,” states Howes. “Employers need to be comfortable that the interviews are sufficiently rigorous, so they know the person can do the job. Candidates need sufficient opportunity to stress test whether it is the right opportunity and environment for them.” 

It is also critical that the employer be transparent about the current situation at the company or team, so that the successful candidate knows what to expect when they arrive. This reduces the potential for flight risk if expectations are out of kilter. Similarly, companies should also seek to establish the context of the individual and understand how work fits into their life to establish a good fit.

The critical pre-start phase

Once a candidate has accepted an offer, companies should seek to maintain contact and build a relationship during the pre-start period. This is vital in a competitive market when candidates may be talking with multiple firms. “Keep new hires warm, build loyalty before they start,” says John, “Ask them into the office or to meet colleagues, anything to help reduce the likelihood of them choosing an alternative employer.” 

Organisations should also be prepared for counter-offers from a candidate’s existing employer. “We see huge numbers of candidates being persuaded by existing employers to stay,” comments Howes. “New budgets and new opportunities are found. This is quite normal, and organisations should be ready for this.”

Getting new hires off to a good start

Navigated successfully, these steps should help companies welcome a new pipeline of talent. Yet this is where a company’s employee value proposition and commitment to training and development really come into play, starting with a strong induction programme and well-trained line managers to help convert those new recruits into long-term employees.