Today's economy is affected by many factors, including resource scarcity, an ageing workforce, and regional political instability.
Some of these factors have a significant impact on wages and other workforce-related costs, which directly affect the profitability of products and services. With prices so volatile, it is crucial for businesses to engage in professional strategic scenario planning and analysis to maintain or improve profitability.
To effectively achieve this, businesses need to truly understand the impact of drivers instead of merely focusing on planning at account level. People are the most critical component of any organization, and to understand profitability, people must be factored into the equation.
Read on to find out how to improve profitability by mastering people planning:
Why Most Financials Don't Know the Cost Impact of Staff on Products and Services
Many companies still use multiple applications for reporting, consolidation, and planning. This fragmentation prevents finance teams from gaining a holistic view. Integrating data from these multiple applications can be a challenge, leading to reconciliation differences, incomplete information, and slow processes. If you want to improve profitability by optimizing the workforce, this is a serious obstacle.
As a finance professional, you may have a good understanding of future workforce requirements. However, obtaining an accurate current workforce picture can be challenging. This is because data from many separate legacy software tools must be combined. This can result in less precise data and slower reporting processes. When it comes to planning FTEs, many finance leaders still struggle with spreadsheets or fragmented software tools.
These tools offer little alignment to financial plans, provide limited visibility, and can lead to misalignment across the enterprise. Making the right business decisions to improve profitability becomes quite a challenge.
To perfectly align the workforce and strategic plans details are essential. When you combine these three, you know precisely when to hire staff and the cost impact that comes with it, optimizing the profitability of products and services
Four Steps to Improve Profitability and Revenue with People Planning
To improve the profitability and increase revenue by mastering people planning, you need to take four steps:
- Understand the cost drivers
- Know how to plan for those drivers
- Know how to allocate costs
- Merge legacy "Suite" reporting tools into one application to be able to design a unified data model
Merging Multiple Data Sources into a Single Application
Merging multiple data sources into a single application allows you to achieve the ultimate goal that legacy software vendors have been promising you since the 1980s: creating a single source of truth. This is something that can only be achieved with applications like OneStream.
What to better understand OneStream? Check out this blog
Customers who have implemented this approach have been able to:
- Analyze gaps and overspending with actionable details. No one can effectively address issues by simply looking at the P&L account "Wages".
- Gain a deeper understanding of the details and drivers within this account.
- Analyze internal versus external employee cost and determine if this is a balanced split.
- Analyze increases in wages and other employee benefits using scenarios.
- Assess the business impact (political instabilities or other external factors) and understand the risk and impact of taking action.
Improving Profitability with People Planning
If you want to ensure your business remains profitable in today's dynamic economy, mastering people planning is essential. You cannot run a profitable business without understanding the drivers of related costs and how to improve services and products from a people perspective.
Mastering people planning (and profitability reporting) will empower you to perfectly balance your workforce, creating a competitive advantage for your company.
People planning is widely known but not widely adopted in many organizations.
Discover how to:
- how to Leverage global drivers for salary, benefits and payroll taxes by title, geography for real-time, dynamic planning.
- how to Share insights, collaborate and enhance dialogue with business partners on critical analysis and decision-making.
- how to Empower managers to develop and manage their employees within a seamless user experience to enable them in analyzing profitability instead of just gathering and processing data.
- how to Plan new hires, transfers by title, grade and rate with understanding the impact on your profitability.
Schedule a demo and learn
- how to Leverage global drivers for salary, benefits and payroll taxes by title,
geography for real-time, dynamic planning.
- how to Share insights, collaborate and enhance dialogue with business
partners on critical analysis and decision-making.
- how to Empower managers to develop and manage their employees
within a seamless user experience to enable them in analyzing profitability
instead of just gathering and processing data.
- how to Plan new hires, transfers by title, grade and rate with understanding
the impact on your profitability.
Ready to take the next step? Book a meeting with our experts. Fill up the contact form to book a meeting and discover how to transform finance with Onestream