Why Reforecasting Matters Now

You probably just finished your workforce budget at the end of December. So why talk about planning again?

Most companies are now comparing actuals against the budget they meticulously created. But as time passes, changes inevitably pile up—whether it’s delayed hiring, increased turnover, or unexpected salary adjustments. The more dynamic and diverse your business, the stronger the need to update your budget with new assumptions and realities.

This process, known as reforecasting, ensures your people plan remains accurate and aligned with evolving business goals. Done correctly, it helps prevent financial surprises and sets the foundation for confident decision-making. However, reforecasting involves more than just revising numbers—it’s a collaborative effort that requires careful planning and execution.

The Reforecasting Process: Steps and Data You Need

1. Review and Gather Data

   • Active Positions: Validate current headcount and ensure that salaries, benefits, and bonuses reflect the latest payroll data.

   • Planned Positions: Identify roles that were budgeted but remain unfilled. What’s causing delays, and are these positions still necessary?

   • Planned Changes: Incorporate upcoming salary adjustments, promotions, or role eliminations.

   • Historic Payroll Data: Map payroll records against the budget to spot discrepancies. For instance, were mid-year raises properly accounted for?

   • Future Assumptions: Extrapolate hiring plans, attrition rates, and new role costs to build an accurate future outlook.

2. Collaborate with Key Stakeholders

   • Reforecasting isn’t a solo effort—it’s a team sport.

     • Finance ensures cost compliance and aligns forecasts with broader business targets.

     • HR provides real-time updates on hiring and retention.

     • Department managers offer operational insights, such as revised hiring needs or timelines.

3. Run Scenarios

   • Use the collected data to test multiple outcomes. For example:

     • What happens if hiring delays persist another quarter?

     • How will a 10% increase in attrition affect department budgets?

   • Scenario planning enables better decision-making by preparing for the unexpected.

4. Finalize and Iterate

   • Reforecasting isn’t a one-and-done exercise. Regularly revisit the plan to adjust for new realities.

The Overall Duration of a Reforecast

A comprehensive reforecast typically takes 2–4 weeks, depending on your organization’s size and complexity. Here’s what that timeline looks like:

• 1–2 Weeks for Data Collection and Validation: Gathering headcount data, aligning with payroll, and validating assumptions often take the most time.
  (Ownership lies 1-2 people)

• 1 Week for Collaborative Review: Aligning Finance, HR, and department managers around key changes.
  (This is the time when most companies send around spreadsheet versions and everyone leaves their thoughts)

• 1 Week for Scenario Analysis and Refinement: Testing various outcomes and finalizing the updated budget.
  (One person brings order in the Excel chaos and consolidates the data together with CFO and CHRO)

Companies relying on spreadsheets often face longer timelines, as manual data entry, version control, and formula errors slow the process.

Common Pitfalls: The Realities of Reforecasting for a 300-Person Company

Imagine this: your company has 300 employees spread across five departments and 3 countries, and it’s time to reforecast. Finance starts by pulling last quarter’s actuals—salaries, bonuses, and benefits. HR is responsible for compiling a list of open positions and planned hires. Meanwhile, department managers email their updated headcount needs, but the format varies: one uses Excel, another sends screenshots, and a third prefers PDFs.

Now, Finance has to piece together this puzzle. As they update the Excel-based budget model, errors creep in: broken formulas, outdated data, and duplicate entries. A single error, like a salary miscalculation, can cascade throughout the forecast, creating significant discrepancies.

Without clear communication, it’s easy to miss key inputs—like a delayed hire in marketing or an unexpected resignation in operations. By the time the revised forecast is ready, several more changes have occurred, requiring yet another update.

This manual, fragmented approach not only wastes time but also leaves decision-makers with outdated or incomplete information. And now imagine this 2-4 times a year.

Why Tools Matter: Moving Beyond Excel

Modern workforce planning tools eliminate much of the manual work associated with reforecasting. For example, tools like Cartha integrate real-time data from Finance, HR, and payroll systems, reducing errors and enabling faster collaboration.

By automating data collection, streamlining scenario analysis, and providing centralized reporting, these tools empower organizations to focus on strategy rather than troubleshooting spreadsheets.