Headcount planning for Christmas is a lot of work for Santa. Luckily, we have some tips for helping him.
As the number of children has grown over the last hundred years, Santa’s workshop has turned into more of a massive logistics complex. At his North Pole HQ in the run-up to Christmas, you can usually find him rushing from building to building, checking in on preparations.
In the Candy Cane building, he checks in on his naughty or nice accounting team (they do great work but don’t follow GAAP principles, and naughty and nice are never in balance). Over at the Shining Star sleigh maintenance shed, he checks in with the pit crew to make sure the runners are waxed and the harnesses taught. In the biggest building—Wrapping—he meets department heads daily to make sure they have enough capacity to keep up (this year especially—we’ve all heard about the supply chain headaches!). In short, preparing for Christmas is a lot of work for Santa and his crew. And as with any organization, it requires him to take headcount planning very seriously.
These are just some of the questions racing through Santa’s mind on the subject. We’re proud to say that Santa is a long-time customer (pro bono, of course), and we thought some of the best practices we have worked with him on might be helpful to you as well.
Headcount planning is a vital component of strategic workforce planning, whether you hire people or elves and reindeer. It’s how you make sure you have the people and skills you need to meet your goals within your budget.
For many organizations, including Santa’s, headcount is the single largest expense. That’s why it’s paramount that Santa understands his labor costs and can tie headcount planning to his FP&A process.
Doing so lets him align talent acquisition efforts with his ambitions. For example, I heard he’s jealous of Elon Musk’s and Jeff Bezos’ adventures in space, and has a skunkworks project on rocket-powered reindeer going on somewhere in Antarctica, far from prying eyes.
Notwithstanding that long-term vision, we all know his main priority is getting presents to every kid that’s behaved well on Christmas morning, so he’s got to know exactly how many elves, reindeer, and other team members need to be involved to make that happen.
Here’s what Santa gets from carely headcount planning:
There are usually four groups that should be involved in headcount planning.
Spearheading the entire process is HR, as they’re the main source of information for all things related to the process.
It’s operating executives’ role to influence overall goals, strategic efforts, and budgets. To use an analogy, HR is tasked with providing a map, and the executive team decides on the destination.
Departmental leaders like operations, sales, or production leads also need to present their department’s perspectives, budgets, priorities and strategies. This includes Mrs. Claus from HR, Rudolph the red-nosed reindeer, Shinny the elf, and others.
The finance and FP&A department also play a critical role since they’re the ones who create the company-wide budget and advise on the best course of action.
Here are the five steps Santa uses to perform effective headcount planning you can use yourself:
Santa first leverages scenario planning and forecasts to understand factors such as children’s needs, new technology, growth within existing and new markets, innovations, potential supply chain difficulties, and others. All of this information informs the headcount planning process.
To identify his business challenges, Santa can ask questions like:
Santa is data (and reindeer) driven. It’s the only way to stay at the top of his game for so long. To achieve his goals, he knows he needs to keep an eye on workforce metrics such as:
Once he’s established these metrics, Santa does a thorough job of evaluating his current workforce against them. This process can reveal that it’s time Santa’s team got a promotion or additional training. It can point to the cause of high turnover rates, uncover whether Santa needs to hire more helpers, and help him address other issues.
Santa reviews, revises, and improves his headcount forecasting processes as his needs and goals change and new data becomes available.
Once Santa has a good overview of his “business” requirements and the current resources at his disposal, he needs to decide on realistic salary and benefits ranges. Only then can his finance team start to forecast the costs of labor.
Ed note: Want to dive deeper into essential FP&A topics? Check out OnPlan’s most popular posts of all time here:
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