What CFOs Should Know About Strategic Workforce Planning

Mastering workforce economics has never been more nuanced. Faced with shifting labor dynamics and increasing pressure for financial precision, executives are faced with complex trade-offs. For instance:

• When is retaining seasoned talent more justified than hiring cost-effective recent grads?
• When is building an internal team a smarter investment than outsourcing?
• How can workforce costs be structured to flex with business cycles while maintaining stability?

These are only a fraction of the questions financial leaders must answer with clarity in a time when 56% of executives cite hiring and upskilling as a top two cost-management concern.

Traditional workforce ROI formulas no longer provide a complete picture. Boards increasingly demand deeper financial insights that quantify the impact of skills gaps, the true cost of delayed hiring, and the risks associated with various staffing configurations.

At PEAK, we’ve spent decades helping CFOs navigate workforce decisions. Read on as we break down our top strategies for evaluating staffing models, measuring what actually drives ROI, and building adaptable workforce budgets. Get frameworks tested across industries and practical tools for your 2025 planning.

Making Sense of Staffing Models

The fixed versus flexible workforce equation isn’t just about comparing salary costs anymore. Today, CFOs are challenged to evaluate complex factors like innovation velocity and risk exposure when evaluating a company’s staffing mix.

Executives are often drawn to the predictability and institutional knowledge of a fixed staff. However, beneath the attractive surface lies a web of rising long-term expenses. Today’s FTE costs extend far beyond salary—skyrocketing healthcare costs, expanded benefits packages, and hybrid work infrastructure are making the traditional full-time employment model significantly more expensive.

On the contractor side, market dynamics have shifted the math. While day rates for contractors exceed prorated salaries, the broader financial picture can be surprisingly favorable. Strip away facility overhead, lower or eliminate training costs, and calibrate team size to exact project needs—and well-structured contractor engagements may yield more cost savings than traditional hiring models. Staffing firms can amplify these savings by reducing administrative burdens and technology expenses.

So, when do you build and when do you borrow? Top CFOs align workforce decisions with key value drivers.

Build when:

• The role lives and dies by organizational context
• The organization needs these skills consistently for 18+ months
• Knowledge retention provides a competitive edge
• Your culture demands high continuity

Borrow when:

• Specialist expertise is needed for specific projects
• Demand for the role follows seasonal or cyclical patterns
• Speed trumps other factors
• Innovation requires fresh perspectives

Prescribing a one-size-fits-all decision is rarely the optimal path. Most organizations need both approaches, strategically applied across different business functions and project types. CFOs must shape their staffing mix according to market conditions, business cycles, and organizational priorities. The goal isn’t to choose one model exclusively, but to develop a framework for making these decisions systematically as needs evolve.

Measuring What Matters

Traditional workforce metrics aren’t cutting it anymore. Labor cost ratios and productivity measures still matter, but they’re telling less of the story than ever before.

To meet stakeholder expectations, CFOs must answer questions such as:

• How quickly do new team members become productive contributors?
• Which teams consistently deliver the highest project margins? (Pro tip: Don’t cut high-performing teams just because they’re expensive—it can kill quality and agility.)
• How efficiently do workforce costs scale with changing business demands?
• Where are skills gaps impacting delivery timelines?

Getting these measurements right requires visibility across your workforce, project, and financial data. A staffing solutions provider can help by consolidating markups, increasing transparency around your contingent workforce spend, and empowering businesses to track KPIs with a VMS tool. Leveraging these capabilities, watch for red flags like:

• Increasing time-to-fill for critical roles
• Project timeline overruns
• Growing gaps between estimated and actual labor costs
• Rising turnover in key positions
• Missed revenue opportunities due to staffing constraints

The right measurement framework turns workforce data into actionable intelligence, empowering financial leaders to spot opportunities and risks before they impact the bottom line.

Building Your 2025 Workforce Budget

Workforce budgets must be precise and adaptable in 2025. Building the right foundation starts with these four steps:

1. Identify the core business drivers and work backward.
2. Map out baseline workforce needs using rolling 12-month projections.
3. Factor in seasonality and known project demands.
4. Layer in growth assumptions, accounting for both market expansion and productivity gains.

Flexibility mechanisms are key to further optimizing workforce budgets. The optimal mix of fixed and variable workforce costs will vary based on industry, business cycle, and strategic objectives. Consider opportunities to create flexibility through thoughtful use of contractors, project-based staffing, and similar arrangements while preserving core capabilities.

Effective contingency planning addresses both growth and downturn scenarios. Create trigger-based decision frameworks that specify when to activate different staffing options. Set clear metrics that signal when to adjust course.

With a solid foundation and flexibility measures in place, the next step is to focus on effectively communicating the strategy to senior leadership.

Win board buy-in by focusing on:

• Clear links between workforce spend and business outcomes
• Concrete risk mitigation approaches
• Quantified efficiency improvements
• Specific flexibility measures

Next Steps for Future-Ready Finances

Getting ahead in 2025 means acting now. Leverage this priority list to optimize your workforce financials:

1. Stack your current workforce mix against industry benchmarks. Find your flexibility and efficiency gaps. Document specific optimization opportunities, especially in high-cost skill areas.
2. Get your business processes ready to track new KPIs. Clean baseline data is essential before making major moves.
3. Establish flexible talent partnerships before you need them. The best relationships form during calm periods, not crises.
4. Monitor compliance closely, especially around worker classification. With pending legal challenges to federal contractor rules and potential policy shifts in 2025, your contingency plans should account for regulatory uncertainty at both federal and state levels.

The workforce landscape keeps evolving, but the fundamentals hold: align costs with value creation, maintain flexibility without sacrificing quality, and stay ahead of market shifts. Leverage these strategies as a roadmap to delivering the ROI your board expects.

At PEAK, we partner with financial leaders to build and execute strategic workforce plans that drive business value. Our deep expertise across industries means we understand your unique challenges and opportunities. Whether you’re rethinking your staffing mix, optimizing costs, or building more resilient teams, we’ll help you develop solutions that work for your organization.

Ready to optimize your workforce strategy? Let’s discuss your 2025 planning needs. Contact our workforce strategy team today.