Keeping Track of Headcount: How to Stay Afloat Despite Shifting Staff

Although the growth in the rest of the UK economy remains febrile and there is some hesitancy over the outcome of rapidly approaching general election, the financial services sector has made a remarkable recovery. In January this year, news agency Reuters reported that professionals moving to new jobs in 2014 boosted their salaries by an average of 18% and as soon as news gets around, you can be sure recruiters will see an increase in the number of people banging at their doors. It is not just market makers and traders who are in demand. There are plenty of openings for those who work in back office positions too. Increasing regulation in all parts of the market has put compliance professionals at the top of the hiring agenda, closely followed by IT executives, especially those with experience of leading business transformation projects.

Like the “curate’s egg”, this is both good and bad news for financial services companies. On one hand, it is always good to be ramping up on resources to address the needs of a rising market; on the other hand, some of their best people will inevitably be among those making career moves. If a single member of a large back office department suddenly leaves, a company can cover their workload by offering extra hours to the rest of the team or hiring temporary staff. Both of these options will have some impact on operating expenses. However, if someone in a key position suddenly takes off without warning, it is a much more serious matter, particularly if the company is temporarily unable to execute putting significant revenue streams at risk.

Succession planning and human capital management can mitigate some of these issues, but to prevent the sudden surprises that anger boards and their investors, companies should also review their planning and budgeting processes. Agility and insight are important capabilities for managing during times of uncertainty and fortunately, you can build them into your planning processes. As a first step, you should examine your use of spreadsheets. They are laborious to use, prone to errors and have none of the immediacy of a modern, real time, planning solution. At the same time, there are considerable benefits from building dynamic planning models that link key individuals and their activity directly with the revenue streams which they are responsible for generating. Similarly, modeling the workload and productivity of support functions can identify headcount requirements and their cost.

Update any piece of data in such a dynamic model and the results will ripple right through to the profit and loss account, giving better visibility into future and a deeper understanding of the causality behind the numbers. None of this is new; you may already be doing it. However, if it is on disparate spreadsheets, you will never enjoy the benefits others gain when they turn it into a unified process in a single solution.