What is workforce planning?

The process involves analysing the current workforce, determining future workforce requirements and implementing solutions to enable an organisation to achieve its strategic plan.

Workforce planning ensures the correct number of people with the right skills are employed at the right time to deliver an organisation’s short and long-term objectives.

Workforce planning can enable the sustainable performance of an organisation through improved decision-making about the future staff needs of a business.

What is strategic workforce planning?

Workforce planning should be linked to an organisation’s business goals and form part of the strategic business planning process. It is an opportunity for senior leaders to engage with and set the agenda for workforce change.

Strategic workforce planning is often designed to meet three or five-year future scenarios. Therefore, it must be aligned with business needs and objectives. It also requires the knowledge and time to prepare a plan that looks at future business strategy and includes scenario planning.

Why is workforce planning important?

Some organisations and some businesses avoid workforce planning, believing that employees will just appear when needed.

Workforce planning aligns core business goals with people strategy. For example, it would make no sense to plan a new product launch next year without considering research and development, the supply chain and of course, the staff who would be needed to manufacture, promote and sell your new product.

Workforce planning is the method to use to ensure that alignment. More broadly, it delivers on several fronts: reducing labour costs, responding to changing customer needs, identifying strategies for people development, targeting inefficiencies, improving employee retention, productivity, and work-life balance and delivering strategic value through talent.

Who is responsible for workforce planning?

Larger organisations may have dedicated workforce planning teams led by management while others may rely on the input of their people (HR) departments.

Some businesses are prompted to begin the workforce planning process following events such as a merger or acquisition.

However, a focus on general workforce planning is important at any time. It can uncover hurdles or unrealistic targets that could hinder strategic change and provide solutions to mitigate risks to strategic objectives.

Many people/HR practitioners link workforce planning to talent planning or succession planning and the results inform resourcing plans which are implemented by line managers.

What are the benefits of workforce planning?

Workforce planning can:

• reduce staff costs
• identify changing customer needs
• target inefficiencies
• improve employee retention
• improve productivity
• improve employees’ work-life balance
• make recommendations to deliver strategic value through talent.

How to start workforce planning?

Workforce planning only adds value if implemented positively and successfully. Key issues to consider include:

• consensus on the plan – a collaborative approach is vital. It needs consultation with stakeholders to enable all parties to agree and understand the rationale for the action being taken
• clear allocation and understanding of responsibilities – it is essential that everyone involved is clear about their responsibilities and what action they need to take
• support for managers – line managers need support from people professionals to fulfil their responsibilities. They must have the skills and understanding to take part fully in the planning process and act on the outcomes
• review and capture learning – clear and robust processes are needed to review and capture learning. As workforce planning is about trying to predict the future, evaluation needs to look at outcomes of the decisions and their consequences.
• data capture – this allows, for example, details of the make-up of a workforce to be easily extracted at the same time each year. Relevant workforce data includes keeping records on new recruits and leavers each year.

The following points are key in workforce planning:

• it starts with the organisational strategy and business plan
• should focus on the future to deliver the business strategy
• should be flexible to deal with constant change
• dynamic process, subject to regular feedback and review
• not just about numbers – it is also about skills, potential and how these are deployed
• encompasses the whole organisation and requires buy-in at all levels to be effective
• brings together operational and strategic planning processes.

Common workforce planning tools

The following are the most common workforce planning tools:

• organisational strategy – your organisation’s top-line strategy is the best tool your people/HR team can have at its disposal
• the 9-box grid – also known as the performance-potential matrix, this is used to map the current state of your workforce across the performance and potential
• HR analytics and reporting – HR software with a robust analytics and reporting platform will help deliver data to all your decisions
• total compensation and benefits analysis – a way to distill the price you pay for top talent and how it squares with the current labour market
• contingency planning – also known as scenario planning, meaning to envision certain scenarios and how your organisation may respond to them.

In summary, successful workforce planning focuses on:

• analysis – analysing your current workforce
• projection – determining the future needs of your workforce
• identification – finding the gaps between current and future workforce
• design – implementing solutions to achieve your business goals
• fulfilment – achieving your plan through the best talent.

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