The future – and for some, the present – of a truly strategic human resources (HR) department is the ability to collect sufficient data about your workforce and the means to glean valuable insights from it.
Workforce planning metrics for your organizational chart are an important piece of this overall data picture.
What are workforce planning metrics – and why should you care?
Workforce planning metrics are information about your workforce that you can track, analyze and leverage to help improve your business, enhance working relationships, proactively plan for the future and lead better. For example, with these metrics you can:
- Assess your organization’s ability and preparedness to reach certain goals
- Identify organizational strengths and challenges
- Confirm placement of the right people in the right roles
- Uncover skill gaps that can hold your organization back from getting where it needs to be
- Make decisions about your staff
If you’re a C-level leader, general manager or HR strategist, you need to be able to quickly see what all the components are around a business as a whole, or an individual business unit or team.
Embedding workforce planning metrics within your org chart gives you a detailed view of your employee population right there in front of you, saving time and offering convenience. As you make adjustments, it helps to keep employee information top of mind. This also helps with scalability.
Which companies need to be concerned with these HR metrics?
Frankly, all companies need an org chart with basic personnel information available at a glance. It creates clarity, order and responsibility. But as the complexity of a business increases – the more people report to a manager, the higher the layers of leadership or the greater the number of business units, for example – the need for visibility increases.
Workforce planning metrics provide that visibility.
A word on org charts: Perceptions of the past versus realities of the present
Previously, org charts were a static snapshot in time, a 2D printout for display in a cubicle. They served as an empty toolbox – just a chart of names and faces showing who’s who and the company’s general organizational structure. People thought of them as cumbersome to maintain and update – little more than an administrative task undertaken in response to change.
Those days are long gone.
In today’s world, with all the developments in HR technology, digital org charts are a much more valuable, dynamic resource and active management tool.
Now in a matter of minutes, you can see the overall, high-level view of a business as a whole. Or, if desired, you can drill down past the business unit or team view to the individual employee level. There are a variety of metrics you can look at and analyze. And they can help you make strong predictions and more informed plans for the future.
So, given the abundant options, what are the most important, must-have workforce planning metrics you should include in your org chart? Let’s take a closer look.
Top 5 workforce planning metrics for your org chart
1. Headcount
Knowing who is part of your company, and in what capacity they serve, is crucial when calculating budgets and analyzing organizational effectiveness. The headcount metric is the basis for examining other workforce planning metrics such as:
- Turnover rate
- Total compensation per employee
- Each manager’s span of control
Beyond simply displaying the number of people, your org chart should help you identify your workforce by type:
- Full time
- Part time
- Contractor
Since the COVID-19 pandemic, remote working has skyrocketed in popularity and acceptance. To that end, you not only need to know which employees and contractors are on-site versus remote, or on a hybrid schedule, but where they are located. After all, remote staff could reside in different cities or states.
Evaluating total workforce headcount and distribution, both geographically and departmentally, can be integral to your people strategy and helps to ensure that you have the staff in place to achieve organizational goals.
Headcount and distribution are indicators of the complexity of a business and the management responsibilities of each unit or team. Especially when overlapped with other workforce planning metrics, they can also reveal the challenges that could potentially lie ahead.
- For example, is a team dominated by remote employees or contractors and perhaps at higher risk of engagement problems?
- How might the information shape how managers interact with and blend their teams?
- How could the data impact diversity and inclusion initiatives?
- How might the organization’s culture be impacted?
Knowing the number of people who work with your organization and their status can also help you determine which laws apply to your company for compliance purposes, and which laws are advantageous and provide a financial opportunity for your company.
2. Span of control
A subcategory of the headcount metric, span of control provides measures for each manager by answering the following questions:
- How many employees report directly to them?
- How many total employees are within their sphere of influence? For example, do they manage other leaders and therefore have an indirect reporting relationship to all those employees under those leaders?
This part of your workforce metrics can be calculated for the whole organization or specific parts of the business. When span of control is coupled with metrics like performance rating, budget and turnover, you can gauge the overall effectiveness of each manager.
Of course, some managers are individual contributors – a manager in title only, without any direct reports. A project manager or program manager are good examples of this phenomenon. Obviously, their span of control – or lack thereof – should distinguish them from other managers on the org chart. Be sure not to include them when calculating and analyzing managerial efficiency so your numbers are as accurate as possible.
3. Salary rollup
A business’s biggest expense is often its human capital, or labor costs. Salary rollup is the combined pay of a company’s people, either at the organizational level, departmental level or within a specific manager’s purview. Additionally, this metric can be further investigated down to the individual level. It provides a starting point for budget discussions surrounding your workforce.
The total cost of your workforce may also include bonuses and other compensation, as well as benefits. However, budgeting for a workforce usually centers primarily on salary.
Having an org chart equipped with the salary rollup metric enables executives and HR professionals to:
- Visualize the total cost of their workforce
- Understand how many dollars each leader is responsible for managing on behalf of the organization
- Help ensure pay equity
- Make more accurate budget projections for the coming months, quarters and years
4. Tenure and turnover
Tenure is how long an employee has been with an organization. This metric can help you determine whether people are growing and developing, and over what time period. When tenure is rolled up, you can see an average amount of time people are staying with your company.
Turnover is the departure and replacement of an employee. The rate of turnover is how often this happens in a certain time period (e.g., month, quarter or year) and is expressed as a percentage.
Together, tenure and turnover indicate how attractive your company is and how competitive it is in the marketplace. It helps answer the question every business leader should ask: Are people motivated to stay with the company – and why (or why not)?
Every company loses people for one reason or another, making employee turnover a fact of business life.
The problem arises when turnover rates soar during times of normalcy, when there are no obvious internal or external factors driving it (e.g., a recession or pandemic), and the company isn’t experiencing any major changes.
It’s also suspicious when high performers unexpectedly quit. When this happens, examining the turnover rates at different levels of your org chart can help to identify the real problem. For example:
- High turnover rates specific to one branch of your org chart may denote poor management.
- Increased turnover among your star players may point to a lack of upward mobility, compensation and benefits that are out of alignment with what the market can bear or some other factor related to individual job roles.
Turnover trends relative to your competitors and within your industry are extremely important, too. You need to know whether your company is in line with what’s happening around you – are you on par, better or worse?
Knowing this information can inform your manager training and retention initiatives. It can also guide you to evaluate what your company might change to attract high-quality candidates.
5. Performance rating
To analyze this workforce planning metric, you must first have a solid and objective performance-management system for evaluating your employees’ performance.
When compared against other metrics such as salary and tenure, you can leverage this information to:
- Target qualified candidates for promotion
- Inform succession planning
- Spot flight risks
- Single out termination risks
As performance management becomes more agile, tracking this metric can also help you determine how often your company measures performance and the frequency with which employees’ performances changes.
Summing it all up
A digital org chart with embedded workforce planning metrics and the capabilities to conduct sophisticated analysis is an extremely valuable tool for today’s strategic HR function.
By tracking, analyzing and leveraging certain information about your workforce, you can shift to a more proactive planning mindset and make better decisions about your staff and for your business.
To learn more about the technologies that can enable deeper insight about your workforce and your business, download our free e-book: HR technology: How to choose the best platform for your business.