Workforce Planning & Budgeting with 'Prajjo Workforce' Software



The Industrial Revolution had been the precursor of the Workforce Planning & Budgeting process. By adopting the process, factories owner of the time used to plan their production.

As time passed by, the importance of this process went up manifold. Prior to Information Technology age, the workforce mobilization cost was second to the raw materials cost. With the advent of IT, the workforce cost now ranges from the first to the second position of any organization depending upon the nature of the industry one is operating in.

With Glocalization, organizations again came under tremendous stress to compete and remain viable.

The factor of workforce cost has taken such an importance at the global macroeconomic level that this decides the movement of investment into suitable economies. Economies are considered favorable or unfavorable for investment depending upon the cost and the quality of workforce.

Workforce related cost issues affect efficiency and even the survival of the organizations.

Besides cost factor, another critical factor for any organization is to ensure Right People and Right Place with Right Cost. Having people is one thing and having right people is another and the most critical for the cost-effective availability of services and goods.

Any mismatch at the level of Right People or at Right Place or the Right Cost, the apparent Financial and more covert Cultural repercussions are innumerable. Studies show that wrong planning may make organizations bleed to the tune of 50-60% of revenue in salaries.

Workforce Planning & Budgeting are two interconnected processes that help organizations to ensure the right number of people with the right skills are available in the right roles at the right time to meet business objectives.

Workforce Planning

Workforce Planning is a strategic HR process that helps organizations in deciphering different skills & competencies requirements now & in future at every level in every function of operation. It also helps organizations in planning the availability of different skills and competencies in distinct functions at specific times so that they can meet their operational obligations.

Workforce Budgeting

Workforce Budgeting is the process by which organizations consider all workforce related costs at different point in time during a specific period and plan availability of funds to meet the need without any shortage, so that the operation has sufficient workforce to meet operational requirements.

Workforce Planning and Budgeting is an HR process comprised of the two distinct but connected sub-processes; the first helps in knowing & planning the kind and number of workforce requirement and the second helps in planning financial resources to feed them, eventually helping organizations to produce products and services in required quantity to meet their customers’ needs and in turn earn revenue.

Budgeting process does additionally provide a structure by which all the positions so considered & approved by the competent authority during the Annual Workforce Planning & Budgeting exercise for hiring, including their costs. These approved positions derived on the basis of Zero Budgeting process or additional intakes to the current available workforce & their related costs in a year are considered as ‘Budgeted’ for all financial planning purpose.

Repercussions of wrong Workforce Planning and Budgeting

Wrong workforce planning and budgeting can have grave consequences for organizations. Here are few of the major repercussions:

1. Overstaffing

  • This leads to higher payroll costs without proportional productivity.
  • Wastes resources on unnecessary roles.
  • Reduces profitability.

2. Understaffing

  • Causes work overload, stress, and burnout among employees.
  • Delays projects and reduces service quality.
  • This can result in loss of clients or revenue.

3. Budget Overruns

  • Payroll Overruns: Salaries exceeding 50–60% of revenue.
  • Project Penalties: Missed deadlines leading to contractual fines.
  • Attrition Costs: High turnover increases recruitment and training expenses.
  • Opportunity Loss: Delayed product launches or service delivery.

4. Skill Gaps

  • Wrong planning may ignore future skill requirements.
  • Results in low efficiency and inability to meet strategic goals.
  • Increases dependency on costly external consultants.

5. High Attrition

  • Overworked or underutilized employees often leave.
  • Rise in Recruitment and training costs.
  • Damages employer brand.

6. Compliance Risks

  • Incorrect budgeting may lead to non-compliance with labor laws.
  • Penalties and legal issues can arise.

7. Strategic Failure

  • Misalignment between workforce and business goals.
  • Hampers growth, innovation, and competitiveness.

Current state of Workforce Planning & Budgeting in Organizations

Screening the current workforce planning and practices are prevalent in one of another form in organizations of various kinds and sizes but these practices have the following shortcomings:

1.      Manual Workforce Budgeting & Planning process

a.        Organizations in practice do have an ad hoc and manual practice that is truncated & unscientific in its very nature for data collection & its use.

2.      A long-hauled Process

a.      The entire process of data collection, compilation and making data worthy of use is full of biases and carelessness.

b.   Additionally, it takes too much productive time of functional and HR managers. Depending on available information, the time taken to conclude the entire workforce planning and budgeting exercise may run for minimum 4 to 6 months in a company depending on the size and operational complexities.

3.      Procedural Difficulties

a.      As the entire process is full of procedure requirements, it is not possible to successfully cover all the aspects of workforce planning and budgeting.

4.      Unscientific & Biased Procedure

a.      All labor requirements are collected from the users who provide them on the basis of their whims and fancies.

b.     In studies, it is found that functional managers submit their requests for additional workforce just out of their ego and not the need.

c.        It is exceedingly difficult for HR managers to raise their objections as managers are given free hand due to many reasons including the fear that if functional managers are not listened to then these managers may lower down the production achievements & the quality of products or services that may bring financial losses to organizations.

5.      Relegating primary responsibilities by Functional Managers

a.   As managers have to discuss and re-discuss their requirements for labor with other functional managers within their respective functions and get the concurrence of seniors, a majority of their time goes into such unproductive activities.

6.      Cost of running the Process

a.     The cost of senior management involved in the entire process runs in substantial unseen cost to organizations.

7.      Cultural Disintegration

a.    Over staffing leads to issues that raises conflicts in various teams, lowering of cooperation and collaboration, wastage of labor, employee disengagement etc.

8.      Opportunity to skill Functional Managers

a.   On-the-job is the right tool for organizations to skill and reskill their employees for specific competencies or skills. Organizations who run their workforce planning and budgeting casually & without understanding that this very process can be used as an effective training tool to skill their functional managers & convert them into Business Managers do miss an opportunity to achieve so.

Keeping all procedural requirements and challenges, Prajjo conceived and developed the Workforce Planning and Budgeting Software, as part of its largest HRMS platform.

Prajjo Workforce Planning & Budgeting Software

Prajjo Workforce Planning & Budgeting is an AI-Centric Software that helps organizations to plan and budget the entire process with minimal human intervention and speedy conclusion of the entire process.  Prajjo Workforce Planning & Budgeting and its different Components

1.    Workforce Analysis

1.1.   Assess current headcount in distinct levels of operations, like locations, functions, levels, and costs.


2.  Demand Forecasting: Covers in looking at future workforce needs based from Zero to Continuous Level on the basis of:

2.1.   Business growth plans

2.2.   Market trends

2.3.   Technology changes

2.4.   Seasonal or project-based requirements


3.     Supply Forecasting: Estimate internal workforce availability:

3.1.   Attrition rates

3.2.   Retirement schedules

3.3.   Internal mobility and promotions


4.  Gap Analysis: It helps managers to critically assess and compare demand and supply to identify following:

4.1.   Skill shortages

4.2.   Surplus roles

4.3.   Critical positions


5.   Action Planning: HR in discussion with the functional managers can design and plan intake strategy to ensure sufficient skill availability.

5.1.   Recruitment & Selection Planning

5.2.   Redeployment of current workforce in different functions and levels.


6.    Fixing different Workforce Costs

6.1.    The software considers direct labor costs like salaries, benefits, and retiral benefits.


7.    Intake Planning

7.1.   Organizations can plan and calendarize the intake as per the requirements during the year of operation.


8.    Integration with Recruitment & Selection

9.    Overall cost Visualization & Provisioning

 


Coming to various advantages that organizations can reap from the Prajjo Workforce Planning & Budgeting software are:

Advantages of Prajjo Workforce Planning & Budgeting Software

1.      The process collects and presents all required data seamlessly and with all ease.

2.      HR need not to run behind functional managers to push them for data submissions.

3.   Old data availability helps functional managers is better visualization of current and future state of workforce requirements,

4.      Ease of data collection monitoring,

5.      Data analyses become simple and easy,

6.      Speed & data accuracy improves, and errors are minimized,

7.      Data comparison is simple and for various aspects like functions, levels, locations etc,

8.      Hiring can be planned to avoid unnecessary cost to the organization.

9.      Budgeted requirements reflect in the Recruitment & Selection software for actions.

10.  Data storage for future reference

11.  Closure of the entire process in shortest time,

12.  Skilling Functional Managers for Business Managers roles,

13.  Helping in fostering an appropriate culture in organizations.

A  Add value to your organizations with Prajjo Workforce. Reach out to us at www.prajjo.com 

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