Headcount Modelling en

Headcount modelling
Optimisation tool
Consulting
Headcount modelling | Optimisation tool
Goals and objectives of

headcount modelling 3
As-is headcount analysis 4
Increase in efficiency and
headcount optimisation 6
Headcount demand forecasting 8
Headcount supply forecasting 10
Recruitment needs and personnel
development forecasting 12
Additional options 13
Headcount modelling approach 14
About Deloitte 19
02
Goals and objectives

of headcount modelling
What is headcount modelling?
Headcount modelling is about creating and using an analytical tool (a headcount model) to look at the
current personnel structure and develop headcount forecasting.
Tasks
The modelling process can be used as the basis for solutions to a number of important operational and
strategic considerations for an entity:
Consolidating headcount data into an integrated database

As-is headcount analysis and analysing the current headcount against the
company's structure, functions, grades, age groups, etc.
Identifying and prioritising areas for headcount

optimisation through increased productivity, personnel
headcount optimisation
structure changes, etc.
Headcount demand Target headcount forecasting based on production

forecasting programmes and strategic indicators.
Identifying internal and external sources for the

Headcount supply
satisfaction of headcount demand according to
forecasting
qualification and function.
Recruitment needs and

Analysing imbalances between current personnel supply
personnel development
and demand, and preparing hiring plans.
forecasting
Who is this relevant for?

Leaders and specialists who use headcount Entities and holdings with a well-developed network
analysis to make management decisions: of assets, branches and business units:
•• HR leaders and employees •• Entities engaged in mining and mineral resource

processing.
•• Leaders of business units and asset
managers •• Large companies with high production capacities.
•• Leaders responsible for mid and long- •• Banks and other financial institutions with
term planning a developed retail chain.
•• Specialists responsible for the •• Retail networks etc.

optimisation of business processes etc
What this brochure is about?

This publication covers the approach used to develop headcount models for companies in various
industries handling a broad range of management tasks using headcount modelling, including
examples of the tasks completed and results achieved.
03
As-is headcount analysis
The model provides insights into the following key questions:
Consolidating headcount data 01. What is the existing headcount structure broken down by function,
into an integrated database and organisational level, grade, etc.?
analysing the current headcount 02. What is the current personnel age structure?
against the company's structure,
functions, grades, age groups, etc. 03. What is the headcount structure broken down by other specific
categories used by the company?
04. What do the headcount key performance indicators indicate?
1 Comparative as-is headcount analysis broken down by various data sets
The model allows the as-is headcount

to be visualised according to:
•• Business unit and asset
•• Function/process
•• Qualification
Clicking the chart reveals the

headcount details by category.
A personnel imbalance for a

function, qualification, etc.
may be identified by using a
combination of analytical
breakdowns and comparing
the assets and business units.
04
2 As-is headcount analysis by age group
The model allows the headcount structure to

be visualised by age group with additional data
breakdowns: by grade, process, etc.
Analysing the personnel age structure

helps management identify the
optimal approach towards internal
processes (for example,
communications), corporate
programmes, etc.
3 Headcount analysis using specific filters
The model allows any set of filters

to be applied to current headcount
analysis:
•• Local/seconded
•• Open/closed vacancies
•• Gender, age, etc.
4 Review of the entity's key performance indicators
The model enables the user to see the

company's key performance indicators
on the same screen in a dashboard
format.
The dashboard format can be

used for current headcount
analysis, target headcount
forecasting and efficiency
enhancement.
05

headcount optimisation
Identifying and prioritising areas 01. What are the internal and external benchmarks for increased
for headcount optimisation productivity and personnel structure?
through increased productivity, 02. What is the potential for the headcount optimisation due to the
productivity increase up to the level of the best practices?
personnel structure changes, etc.
03. How to prioritise areas for the headcount optimisation?
1 Internal and external benchmarking
The model defines the maximum

productivity for functions or processes
according to the set of assets/business
units.
The model enables the headcount

structure to be analysed by various
categories to identify any imbalance
between the categories.
The model enables external

benchmarking by strategic
and operating indicators.
Reviewing the implementation of a process in an

asset where the productivity is higher compared
to other assets allows an entity to use its
experience for similar processes in other assets to
increase their productivity.
06
2 Determining the potential for headcount optimisation
The model enables several scenarios to

be established, which all include criteria
for the statistical selection of productivity
based on internal benchmarking results
The model enables the as-is and target

headcounts to be compared by:
•• Company/asset
•• Process/function
•• Business unit, etc.
A factor analysis allows the entity

to detail changes in processes,
business units, etc.
Aside from allowing increases in

productivity to be assessed, the model
enables the assessment of headcount
optimisation through:
•• Outsourcing functions
•• Not implementing a number

of projects, etc.
3 Prioritising areas for headcount optimisation
The model enables sensitivity analysis to be carried

Sensitivity analysis enables
out, which is an assessment of the effect of changes
the selection of the most
in the model’s parameters on the headcount.
important areas for
efficiency improvement
and prioritisation in terms
of the development and The model allows the highest priority areas for
implementation of headcount optimisation to be selected.
initiatives. Prioritisation criteria include:
•• Absolute and relative headcount reduction
•• Personnel cost reduction, etc.

Highest priority
initiatives
07
Headcount demand
forecasting
Target headcount forecasting 01. What is the headcount required for various strategic scenarios?
based on production programmes
and strategic indicators. 02. What is the headcount required for the implementation of the
production programme?
03. What drivers impact the headcount demand and how?
1 Headcount demand forecasting adjusted for changes in strategic indicators
The model allows the company

to forecast labour input drivers
and calculate demand
based on the entity's strategic
indicator plan for several
scenarios.
The model allows management

to assess the effect of
implementing or not
implementing a capital or
efficiency improvement project
on headcount.
08
2 Headcount demand forecasting adjusted for the entity's production programme
The model allows the specific features

of the production process affecting the
headcount to be taken into account.
Decomposition reveals the main

labour input areas. By adding cost
data to the model, it becomes possible
to identify processes or business units
with the highest personnel costs.w
The model allows for headcount

decomposition by:
•• Process/function
•• Business unit
•• Equipment type, etc.
The model makes it possible to

calculate several scenarios for
various production programmes
and to compare the respective
target headcounts.
–10%
3 Analysis of factors affecting changes in headcount demand
The model allows for the

decomposition of headcount
change by labour input driver.
09
Headcount supply
forecasting
Identifying internal and external 01. How many current employees will the entity still have
sources for the satisfaction of on staff in several years’ time?
headcount demand according to 02. How will changes in career growth programmes impact
upon the entity’s grade structure?
qualification and function.
03. How many employees will be retiring, leaving, moving to other
departments, etc. per annum?
04. What is the nature of the external headcount supply from key higher
education institutions, regions, countries and fields?
1 Identifying sources for the satisfaction of headcount demand based on existing resources, including dismissal
The model enables detailed personnel

movement parameters to be set:
•• Personnel turnover
•• Retirement
•• Vacancies filled using internal

resources, etc.
The model allows the entity to

forecast internal headcount
supply according to:
•• Personnel category
•• Age group
•• Qualification, etc.
10
2 Analysis of career growth depending on various development plans
Fast promotions may result in rapid

growth in the management headcount.
An optimal career growth programme
allows entities to avoid breaching their
grade structures
The model can be used to analyse career growth programmes and select a
programme that reflects the strategic objectives of the entity.
3 Analysis of factors affecting change in headcount supply
•• The model allows for decomposition of headcount •• The decomposition may be performed for any
change according to essential factors (retirement, period using a full list of settings for supply
personnel turnover, promotion, etc.) forecasting.
4 Analysis of external headcount supply by target qualifications and areas
The model allows

management to analyse
external supply with respect
to young specialists by core
educational institutions.
College
University
11
Recruitment needs and personnel

development forecasting
Analysing imbalances between 01. How many employees should be hired over the next few years to fulfil
current personnel supply and the company’s requirements by function and qualification?
demand, and preparing hiring

02. How will recruitment impact upon the entity’s personnel structure?
plans.
1 Analysis of imbalance between the current personnel demand and supply
The output of the demand and supply models

is displayed on a single chart for convenience
of analysis.
Analysing the balance of supply and

demand allows detailed instructions for
the HR recruitment function to be
developed to encompass specific ranges
of qualifications for specific business
units.
2 Personnel structure analysis: experienced and new employees
The model can be used to display changes in the

personnel structure by category:
•• Current employees
•• New employees
•• Annual recruitment
By adding HR function cost data to the

model, it becomes possible to prepare a
detailed forecast of the HR function’s
medium-term recruitment costs for
certain qualifications and business units.
12
Additional options
Regardless of the main task that the headcount modelling is

intended to solve, additional tools and settings may be included
in the model to expand the capabilities of the headcount
analysis, forecasting and calculation.
1 Regulation of work schedule and working hours
Work schedule Working hours Using the model to test hypotheses

about transferring personnel to
different working regimes allows
•• The model enables the headcount of •• The model allows the entity to set
management to calculate the financial
personnel with non-standard schedules to working hours for a selected process,
effect of the changes.
be calculated (shifts, seasonal work, etc.) business unit, family of qualifications, etc.
•• To account for the specific characteristics •• The model enables labour input changes
of the work schedule, the following made in the event of changes in working hours
be included in the work model: to be analysed.
–– Number of employees on the payroll
–– Number of employees scheduled
to work
2 Accounting for the specific characteristics of the entity's organisational structures
The model illustrates the current

As-is personnel distribution by the =15 Источники целевых
headcount categories: "management” and значений норм
“subordinates". =90 управляемости и уровней
иерархии:
Spans of control
•• Текущие значения,
Target The model calculates the target 6 8
headcount headcount by category •• Внутренний или внешний
based on the target spans of control. =15 =10 бенчмаркинг,
•• Определение
=90 =80
пользователем и др.
Target
organisational
The organisational structure is 2
structure Three levels of
integrated into the model with pre-set 3 3 hierarchy
target values for spans of control and
hierarchy levels.
13
Headcount modelling
approach
The headcount modelling approach comprises four main development stages:
1 2 3 4
Headcount Analysis of the
Headcount modelling Headcount model
modelling headcount modelling
data gathering design
preparation results
The timing of each stage depends on the current number of assets/branches/business units in the scope of the
modelling, the details required and the number of model parameters. The scope of work and the approach to its
implementation depend on the issues to be solved through headcount modelling.
1 Headcount modelling preparation: detailed analysis of the client's business

30–50 percent
of the project time
Key steps
•• Specification of the task, including the determination of: •• Interviews with top and middle managers of functional
–– The list of functions and business units areas in the modelling scope
in the scope of the modelling
•• Review of the current organisational structures and staff
–– The headcount data sets
schedules.
–– The depth of calculation detail, etc.
•• Analysis of production plans and short and medium-term
management reports.
Stage deliverables
•• Structure of labour input areas: –– Target organisational structure and linked processes or
–– Process model, including the distribution of the current qualification families and/or other factors.
personnel by process
•• Labour input drivers for each labour input area (performance
–– Family of qualifications, including the distribution of the
indicators determining labour input and, as a result, headcount).
current personnel by qualification and/or other factors.
2 Headcount modelling data gathering: data storage structure development

10–20 percent
of the project time
Key steps
The following data is gathered at this stage: •• Survey of representatives of assets, branches and/
•• Current labour input (headcount) or business units
•• Current labour input driver values •• Review of production and administrative reports,
regulations and other sources presented upon request
•• Data collection can be performed through various approaches:
Stage deliverables
Database (as-is situation): –– Qualification
–– Work schedule (shifts)
•• Detailed information on the current headcount
–– Level of remuneration, etc.
by labour input area:
–– Headcount •• Current productivity values by labour input area
–– Gender and age-differentiated characteristics
14
3 Headcount model design: analytical tool development

30–50 percent
of the project time
Key steps
Labour input driver value forecasting •• Additional options:
by area. Possible options include: –– Supply forecasting
–– Statistics –– Supply and demand balancing
–– Forecasting based on strategic indicators –– Identification of the number of leaders based
–– User-defined on target spans of control
Determination of personnel productivity values. –– Accounting for organisational structure based
Possible options include: on the target spans of control, hierarchy levels, etc.
–– Statistics
–– External best practices
–– Industry regulations, etc.
Stage deliverables
Headcount model
4 Analysis of the headcount modelling results: development of recommendations

5–10 percent
of the project time
Stage deliverables
Depending on the goals set, the modelling can result as follows: •• Target headcount for specified planned performance indicators
•• Medium-term and long-term headcount supply •• Target productivity levels based on internal benchmarking
and demand forecasting for assets, branches or business units, etc.
•• List of areas for headcount optimisation prioritised

based on various criteria, for example:
–– Absolute and relative headcount change
–– Personnel cost reduction, etc.
QlikView: headcount modelling engine
We use QlikView, a Business Intelligence tool and modelling •• A user-friendly interface for data visualisation and analysis:
engine that provides: –– Offering a fast recalculation process for charts and tables when
other data dimensions or modelling parameters are selected
•• Required computational speed by:
–– Supporting data export to Excel and other systems
–– Using a relational database rather than separate tables
–– Featuring an innovative RAM-based computing process
In 2011, Deloitte and QlikTech (the developer of QlikView)
announced a global strategic alliance.
15
Headcount modelling – the road

to a high level of maturity
for HR functions
According to Deloitte’s experience, the maturity level of HR
analytics employed by HR services in large companies corresponds
to one of the levels described below:
Improved data
Recruitment of a qualified handling
HR team
Open access to HR
Reporting
Level 1
Launch of
headcount planning Higher level HR team
procedures analytics
Level 2
Responsive reporting
Preparation of responses to one-time
requests from functional blocks.
Lack of regular reporting practice.
Standardised Reporting
Preparation of regular reports
by HR teams to be used by
functions.
According to global practices, companies that reached the top (fourth)

maturity level of HR analytics, have the following advantages:
2х 3х
More likely to improve
Recruitment procedures More success in
30%
procedures cost reduction
Higher return
2х
return on equity
2,5х
More likely More likely to improve
to improve staff leadership development
mobility opportunities
16
Personnel data
integration
HR involvement in the
decision-making process
Development of data
visualisation skills
Level 4
Design of headcount
models
Predictive analytics
Leveraging predictive analytical models
to support the decision-making process
Level 3
A key step towards the highest level of HR

Basic analytics analytics maturity and a competitive advantage
Leveraging simple analytical tools is the development and use of predictive
analytical headcount models focused on
Cooperation between HR and the company's needs in terms of personnel
functions to identify common management.
goals and challenges
17
Tasks that can be accomplished

by means of headcount modelling
•• As-is headcount analysis by business unit, function, •• Analysis of factors determining headcount demand
process, qualification, gender, age, etc.
•• Identification of sources for the satisfaction of
•• Visualisation of the entity’s personnel-related key headcount based on existing employees and internal
performance indicators reserves
•• Identification of areas, processes and functions with •• Selection of an optimal career growth programme in
the highest labour input and personnel costs accordance with the entity's strategic objectives
•• Internal and external benchmarking of productivity to •• Personnel movement forecasting, including

extend best practices in process implementation to retirement, dismissal, career development, transfer
other assets/business units. to other business units, etc.
•• Internal and external personnel structure •• Identification of factors affecting changes in the
benchmarking to identify imbalances between entity's internal headcount supply
personnel categories by business unit, process, etc.
•• Analysis of the external headcount supply by key
•• Internal and external benchmarking on spans of qualification, activity, higher education institution,
control to optimise organisational structures etc.
•• Determination of the potential for headcount •• Forecasting of recruitment needs for selected
optimisation through productivity increased to the qualifications and functionalities in the short-,
level of internal and external best practices medium- and long-term
•• Determination of the potential for headcount •• Analysis of costs on recruitment and training of new
optimisation through outsourcing of functions employees
•• Determination of priority areas for headcount •• Testing of hypotheses about changes in working
optimisation through reductions in personnel, costs, hours and their impact on headcount and personnel
etc. costs
•• Sensitivity analysis of the entity's headcount- •• Analysis of the entity's current organisational
impacting performance indicators to identify areas structures
for efficiency improvement initiatives
•• Calculation of the headcount for the entity's updated
•• Long-term headcount demand forecasting based on organisational structure
the entity's strategic indicators
•• Short- and medium-term headcount demand

forecasting based on the entity’s production
programme
•• Headcount demand forecasting as regards

implementing or not implementing major projects or
Headcount modelling is not limited to use in carrying out
efficiency improvement projects
the above tasks. A special approach can be developed
•• Comparison of production programmes in terms for each new task related to headcount or personnel
of headcount demand and personnel efficiency costs, the result of which will be a headcount model with
indicators the analytical units to solve the task.
18
About Deloitte
Our team:
Alexey Sukhanov Rafail Miftakhov

Director Director
Operations Transformation team Technology Integration team
Tel.: +7 (495) 787 06 00, ext. 5003 Tel.: +7 (495) 787 06 00, ext. 1400
asukhanov@deloitte.ru rmiftakhov@deloitte.ru
Irina Samokhvalova
Irina Demicheva Manager
Senior Manager Human capital team
Operations Transformation team Tel.: +7 (495) 787 06 00, ext. 1660
Tel.: +7 (495) 787 06 00, ext. 5218 isamokhvalova@deloitte.ru
idemicheva@deloitte.ru
Contacts:
5 Lesnaya Street,
Building B
Moscow
Russia
Tel.: +7 (495) 787 06 00
Fax: +7 (495) 787 06 01
Deloitte CIS
St. Petersburg
Minsk
Moscow
Kiev
Yekaterinburg
Yuzhno-Sakhalinsk
Ufa
Atyrau Novosibirsk
Tbilisi
Astana
Aktau Vladivostok
Baku
Yerevan
Almaty
Ashkhabad
Tashkent
Bishkek
Dushanbe
First coming to the CIS in 1990, Deloitte operates 20 offices with approximately 3,400 professionals based in 11 countries
across the region. Our professionals specialise in audit, tax, legal, consulting, risk management and financial advisory services.
CIS is a priority market for Deloitte. With more than 25 years in the CIS, we have completed a large number of projects
adapting international practices to the Russian environment, and we have accumulated solid experience in serving local
clients. Our understanding of the specific nature of the CIS market combined with our experience as a leading global firm
enable us to apply our special knowledge and own methodologies when working with clients.
19
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deloitte.ru
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Headcount modelling

Goals and objectives of

Goals and objectives

Consolidating headcount data into an integrated database

Identifying and prioritising areas for headcount

Headcount demand Target headcount forecasting based on production

Identifying internal and external sources for the

Recruitment needs and

Who is this relevant for?

•• HR leaders and employees •• Entities engaged in mining and mineral resource

•• Specialists responsible for the •• Retail networks etc.

What this brochure is about?

As-is headcount analysis

The model provides insights into the following key questions:

into an integrated database and organisational level, grade, etc.?

04. What do the headcount key performance indicators indicate?

1 Comparative as-is headcount analysis broken down by various data sets

The model allows the as-is headcount

•• Business unit and asset

Clicking the chart reveals the

A personnel imbalance for a

2 As-is headcount analysis by age group

The model allows the headcount structure to

Analysing the personnel age structure

3 Headcount analysis using specific filters

The model allows any set of filters

•• Gender, age, etc.

4 Review of the entity's key performance indicators

The model enables the user to see the

The dashboard format can be

Increase in efficiency and

for headcount optimisation productivity and personnel structure?

1 Internal and external benchmarking

The model defines the maximum

The model enables the headcount

The model enables external

Reviewing the implementation of a process in an

2 Determining the potential for headcount optimisation

The model enables several scenarios to

The model enables the as-is and target

•• Business unit, etc.

A factor analysis allows the entity

Aside from allowing increases in

•• Not implementing a number

3 Prioritising areas for headcount optimisation

The model enables sensitivity analysis to be carried

•• Absolute and relative headcount reduction

•• Personnel cost reduction, etc.

03. What drivers impact the headcount demand and how?

1 Headcount demand forecasting adjusted for changes in strategic indicators

The model allows the company

The model allows management

2 Headcount demand forecasting adjusted for the entity's production programme

The model allows the specific features

Decomposition reveals the main

The model allows for headcount

•• Equipment type, etc.

The model makes it possible to

3 Analysis of factors affecting changes in headcount demand