Annual planning is broken: Can people analytics help fix it?

Companies will argue that annual planning is one of the most important processes they undergo each year. But scaling companies don’t do planning annually; they engage with planning all the time. Annual planning is a fundamentally broken process because it doesn’t keep up with the speed of business today. Most organizations look at sales forecasts and marketing reports weekly but only revisit headcount planning on a yearly basis. What’s stopping planning from becoming semi-annual, quarterly or even monthly is not the planning, but all the work involved in preparing to plan.

Author Emily Connery

It’s difficult to execute planning more frequently because of the arduous task of preparing. Gathering the right data and compiling relevant spreadsheets is a huge endeavor, both time-consuming and tedious. Without an informative org chart or easily accessible data, the burden to get organized and “plan to plan” falls on HR managers, who must manually dig through information while ensuring nothing slips through the cracks. They’ve also got to review information to correct human error and miscommunication. Some HR leaders resort to labeling index cards with each team members’ details just to have a better sense of their organizational structure. Companies struggle through planning, relegating it to once a year because they lack the tools to embed the process into their daily, weekly, monthly and quarterly operations.

Related: How COVID is changing HR’s approach to workforce planning

Data is only as useful as it is accessible. Companies relying on annual planning do so because it’s so hard to get to their data. Businesses that cultivate an environment where it takes no extra work to prepare for planning will have the freedom to plan for the company they’re growing instead of falling behind. Consider these three ways HR can bring order to the chaos of planning and improve the health of the business along the way.

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No. 1: Use technology that lets you collaborate and align as a team.

The first step to incorporating planning into your day-to-day operations is to reduce the hurdles between your team and your company’s actionable data. Many teams prepare for planning by bouncing between siloed spreadsheets to track their most important, actionable insights. That kind of strategy is hard to scale and generally requires bringing in a data scientist. You shouldn’t need a data scientist to help you decode planning data. A people analytics platform that collects and centralizes all of your HR data into a dynamic org chart will allow you to visualize roles, workflows and reporting structures—all key components of planning—as part of a holistic view of the business. By implementing people analytics technology that consolidates your HR data and optimizes insights through visualizations, everything you need to know about your organization is instantly searchable and dynamically surfaced.

Without the strain of compiling and correcting information, planning can happen whenever your organization needs it. By implementing a platform that centralizes your data, managers can easily find the information they need to identify strengths and needs within their teams. And empowering managers to explore the data themselves facilitates easier and more productive communication with HR.

No. 2: Set up a structure, but keep it nimble.

Planning more frequently throughout the year is one way to support a nimble organizational structure that can meet the needs of a growing company. Instead of waiting for an annual planning cycle, companies equipped with robust people analytics can use the technology to identify trends in their workforce and act on them immediately. Not only can users run customized reports, but they can also follow the data down to the granular level to pinpoint what’s happening and do something about it.

When planning is less of a hassle, organizations can evaluate a wider range of strategies as a way to experiment, practice and get insight into various outcomes. You can look at changes and costs in a testing scenario instead of watching a bad choice play out in real-time. With technology that lets you test multiple scenarios, save them and revise them—then share them with team members and leave feedback all in the same place—you can use those robust, regularly scheduled planning sessions for future projections or to make immediate changes. 

No. 3: Keep a strong pulse on organizational health.

A company, first and foremost, is its people. Keeping a strong pulse on the organizational health of your business enables you to work proactively instead of reactively. Taking care of the employees you have will always be more cost-effective than replacing them. A people analytics platform makes it easier for HR and management to communicate effectively and make decisions about retention issues, such as leveling, compensation, engagement and career paths because they’ll have access to the data they need.

Employee expectations are higher than ever. Using a platform that helps visualize any aspect of employee life fosters transparency while ensuring confidentiality. In that way, employees are empowered to develop a deeper understanding of the organization and find their own answers without stumbling onto sensitive information. That transparency generates trust, builds a stronger relationship with your employees and facilitates employee retention.

Plan better with people analytics

By implementing people analytics, your organization’s data will go from opaque to accessible so you can spend less time analyzing and more time acting. Instead of preparing to plan, your company can make strategic changes whenever they’re needed by instantly consulting your data. Planning is often framed as centered on financial decisions, but businesses rely on people. The more you know about your people, the better you’ll be able to plan. And with the market for top talent more competitive than ever, you can’t afford to wait all year.

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