Automatically add headcount to plan based on specific drivers

Description

Driver-based employee cost planning refers to the decision-making tool in Corporate Performance Management (CPM) software that helps organizations to project employee-related costs based on key business drivers. This approach focuses on operational factors (drivers) that significantly affect costs. These can include foot traffic, number of employees per department, hours worked, salary rates, supervisors, and so on.

Example Use Case

Scenario: A chain of supermarkets is using CPM software to plan their workforce costs for the coming year. They have multiple stores across different regions with varying staffing requirements depending on numerous factors such as store size, location, sales volume, among others.

Solution: The CPM software has a driver-based planning feature. The management sets the drivers relevant to their business - number of stores, expected sales volume, average working hours, and average wage rates. The software uses these drivers to project the staffing costs for each store and overall. This gives the management a reliable estimate of their workforce-related costs, aiding in budgeting and financial planning.

Considerations

This differs from a model where drivers calculate an individual employees' fully burdened cost, in that this is more production-based. It can be tiered as well to require more management positions as demand grows. In the supermarket example, if we add say 10 cashiers, we need a dedicated cashier manager. Thanksgiving might drive produce sales, as such the increased produce department traffic requires 3 additional produce staff.

Questions to Ask a Vendor

• Using Drivers: How can we build a workforce model that uses drivers to create a tiered workforce model? In other words, how do we model employees + supervisors + managers by demand?
• Pre-Built Models: Do you have a workforce model to demo that factors in drivers to calculate staffing needs?
• Analysis Tools: Does your software provide analysis tools for predicting and providing scenario analysis to hiring plans?