When you’re embarking on a long-term mission with your company, one of the most common challenges that you face is the impact of staff turnover. With every change in your team comes reduced continuity, increased training costs, and a risk that a misguided replacement hire can slow down growth and progress. However, this is not a risk that you can ever eliminate because some level of staff turnover is unavoidable. The only thing you can do is manage it as effectively as you can.

Let’s explore what that looks like in the context of the modern business environment.

How do you account for employee turnover in your FP&A processes?

There is, of course, a wide range of business advice that talks about how you can improve your culture-fit recruiting, create a healthy working environment, and provide employees with the support, perks, and compensation that incentivizes them to stay with you – all of which can make a significant difference to how much staff turnover you experience.

However, we’re going to leave that to the side for now and focus on how you should be integrating your assumptions about staff turnover into your FP&A workflows because this can directly influence the way you operate as a company – especially if human resource costs are a major component of your expenses. In order to achieve accurate forecasts, you need to take a view of your staff attrition and forecast the impacts of both the direct salary costs but also the range of indirect overheads that are driven by staff numbers. These indirect costs are often underappreciated because they are more difficult to estimate – but ignoring them entirely is not a smart solution.

The ideal FP&A setup would incorporate these drivers and this would flow through to the wider planning landscape so that leaders can make more informed decisions. In fact, we think that merely bringing more transparency to the true cost of staff attrition can incentivize managers and leaders to make more of an effort to cultivate a positive working environment that respects and looks after the important human resources that they have at their organisation.

We’ve been wanting to find a way to bring this new thinking to the world of FP&A and we think that we’ve finally found a way to do so.

Introducing the Apliqo Workforce Attrition Model

We’ve been hard at work building an FP&A solution that can help our clients navigate employee turnover and we’re very excited to start talking about it. We’re calling it the Apliqo Workforce Attrition Model.

This tool is designed to predict and forecast employee turnover rates and the associated workforce costs that come along with it. By leveraging advanced machine learning algorithms (written in Python), the model analyses several factors including employee demographics, job satisfaction metrics, performance indicators, and more. By combining all this data into one analysis, companies can obtain much more nuanced and accurate insights into the attrition patterns at their organisation.

With those insights in hand, you are then able to identify any potential areas of concern and enact proactive strategies to improve retention and mitigate against the risk of losing top talent. Additionally, having a more sophisticated forecast of the actual costs also means that you can make better decisions regarding resource allocation, budgeting, and strategic planning. This empowers your HR team and other stakeholders to optimize their talent management and drive toward long-term business success.

This is one of many ways that we’re starting to incorporate machine learning algorithms into our software here at Apliqo. The technology is transforming the world of FP&A because of its ability to unearth difficult-to-see patterns and correlations within vast datasets. By continuing to learn from new data inputs, our model will improve over time – giving you a customized solution for managing workforce attrition in all its components.

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We’ll soon be integrating the model into the Apliqo software suite so there’s never been a better time to upgrade your FP&A capabilities. To find out more about this exciting new innovation and everything else that our tools have to offer, get in touch today, and let’s work together to improve your planning and analysis.