After having gone through multiple planning cycles as a FP&A Manager, I know one thing for sure:

In a company, headcount planning resembles constructing a sandcastle near rolling waves- each tide clears the board, mandating a new start. Just when you've wrapped up your headcount plan, a manager can turn everything upside down - be it with a new headcount request or an urgent staffing change. It's a vivid illustration of the business world's intrinsic dynamism, to which Financial Planners must continually adjust.

In a fast-paced business landscape, businesses need robust systems to manage internal processes efficiently. Headcount planning is no exception: On the one hand, it is about planning the line up of your most important resource - people. On the other hand, headcount (related) costs most likely represent 70-80% of your operating expenses. Getting your planning wrong can jeopardize your business plan significantly - both in terms of topline and bottom line results.

Amid dynamic business needs and multiple stakeholders, approval workflows stand out as a necessity rather than a luxury.

Why You Can't Ignore Approval Workflows

Approval workflows are structured processes that guide decisions around staffing, from hiring to role changes.

These workflows are indispensable for multiple reasons:

Constant Control

By implementing a headcount approval process, you can eliminate unpleasant surprises during your next monthly close.

When prioritizing profitability, obtaining approvals for your headcount plans ensures you adhere closely to your budgeted personnel expenses.

Focusing on growth? A rigorous headcount approval process allows for the strategic allocation of hiring capacity, setting realistic staffing expectations that align with your top-line objectives.

Time-Efficiency

Well-designed workflows obviate endless slack messages, emails and meetings, delivering quick, yet informed decisions. This streamlines operations, saving both time and overhead costs.

Cross-Functional Alignment

Approvals for headcount requests aren’t solely the domain of your HR team; they often require sign-off from Finance and C-level executives. Approval workflows systematically involve all relevant stakeholders, ensuring holistic decision-making and the exchange of information on headcount plans.

Decision-Making

With pre-defined steps, approval workflows remove ambiguity, offering a consistent approach to arrive at headcount decisions. Documentation at each stage provides a transparent, auditable trail, enhancing accountability and future reviews.

Getting Started: How to Implement Approval Workflows

Incorporating approval workflows in headcount planning isn't just about setting up a software system. It requires a strategic approach that aligns with your organizational culture, needs, and long-term objectives.

Choose a Robust Platform

When considering the implementation of a headcount planning tool, it's crucial to look for a platform that includes built-in approval workflow capabilities. However, the selection process should be thorough, as not all tools are created equal. Look for features that allow for cross-functional collaboration, enabling role-based approvals from various departments like HR, Finance, and Operations. This ensures that the right stakeholders are involved in the decision-making process. Additionally, the tool should offer selective permission control, providing role-based access to sensitive data to enhance security. Usability is another key factor; a user-friendly interface will foster quick adoption across the organization and minimize the learning curve.

In summary, a specialized headcount planning tool with an approval function is more aligned with the specific, collaborative, and secure needs of headcount planning compared to modifying existing general-purpose tools.

Determine who’s in the room

Most larger organizations fail to deliver relevant information across department interfaces. Therefore it is crucial to identify all the parties involved in headcount decisions, what roles they will play and in which order they should give their approval. 

A simplified example might be: 

The CTO (Budget Owner) gets a request from one of his Engineering Leadership team, that they need to hire a new Backend Developer. The CTO agrees, since the position is needed. But before kicking off the hiring process, she needs to check a) if HRBP agrees from an organizational point of view, b) Recruiting has sufficient capacity and c) whether he has enough budget to add a new role. The approval process would look the following:

Budget Owner → HR Business Partner/ Recruiting → CFO

Don’t overcomplicate things by involving too many stakeholders, such as all hiring managers. Instead start with Budget Owners to keep the process lean and see how it works. You can always adjust the approval process later on if needed.

Create Workflow Templates

Depending on your organizational needs, establish different approval templates for various planning cycles:

• Annual Planning: Incorporate multiple layers of approval for large-scale hiring or downsizing.

• Quarterly Adjustments: Create a lighter workflow for routine updates, capturing any variance to ensure resource availability and budget alignment.

• Ad-hoc Requirements: Develop a fast-track approval process for sudden hiring needs or layoffs, ensuring these are aligned with business urgencies.

Stakeholder Training and Communication

After your workflows are set, a communication plan is vital. Train all stakeholders to understand their roles in the approval process, the timelines they should adhere to, and the data they need to consider. This will avoid bottlenecks and frustrations later. Keep it simple and understandable, e.g. by writing an email or creating a Loom. Ensure the process is well documented in case new people are joining and need to understand the process.

The Payoff: A Cohesive, Transparent, and Efficient Process

Approval workflows might appear as an operational necessity - but offer strategic advantages by aligning stakeholders around a common plan and process. The result is a more transparent playbook which positions are going to be hired and what are the priorities.  As you move forward, you’ll find these workflows are not just about approvals; they're about facilitating smart, aligned decisions that drive your organization's success and speed of execution.

Interested in understanding how to tailor approval workflows for your unique organizational needs?

How Cartha facilitates approval workflows

Cartha offers custom approval workflows for businesses of all sizes that are flexible to fit any needs. The implementation is super simples and includes just 3 steps:

Invite users

Define the viewing & editing permissions, role (Admin or Manager) and the group/ department where the user has viewing permissions to. This ensures that people from different departments and in different hierarchical levels have access to only the data they are supposed to.

Assign approval rights

Define if the user can solely request or also request and  approve positions. You can define up to 5 approval steps, which you can tailor to your individual processes (keep in mind the advice from above). 

Request position

Once you have received an approval request, you will get a notification by Slack/ Email. You can see the requisition including the proposed budget and hiring time. Now you are able to comment, approve & deny the request. 

What stops you from starting this Monday?

Navigating the intricate world of headcount planning is akin to building a sandcastle against relentless waves; just as everything aligns, unexpected staffing changes can disrupt the balance. Hence, for FP&A managers, implementing approval workflows isn't merely about keeping order; it's a strategic move ensuring cohesive decisions and efficiency. 

If you are ready to revolutionize your headcount planning, start by adopting a robust platform tailored for approval workflows. 

One great option is Cartha - a comprehensive solution built for this exact challenge. Want to see it in action? 

Book a demo with us and embark on a streamlined journey of headcount planning.

Contact us on LinkedIn if you have any questions regarding best practices. Independent of whether you are just starting out in Finance or a seasoned professional we are happy to discuss!