What is workforce planning?

Workforce planning is an organization’s strategic process to ensure that they have the right number of people with the right skills in the right place and at the right time. It involves analyzing the current workforce, predicting future workforce needs, identifying gaps, and implementing solutions to fill those gaps to meet business objectives.

What is the difference between workforce management and workforce planning?

Workforce management focuses on day-to-day operations such as scheduling, attendance, and productivity. The goal is to ensure that employees are efficiently allocated and tasks are completed effectively.

For example, in a retail store, workforce management involves scheduling cashiers during peak hours to reduce customer wait times. Similarly, in a call center, workforce management ensures the optimal number of agents are available to handle call volumes throughout the day, avoiding overstaffing or understaffing.

Workforce planning, on the other hand, is a strategic approach that involves forecasting future workforce needs, identifying talent gaps, and aligning staffing strategies with long-term business goals.

For example, a tech company might analyze future trends in artificial intelligence and plan to hire data scientists and machine learning experts over the next three years. Alternatively, a healthcare provider anticipating an aging population might plan to increase its workforce of geriatric care specialists and invest in training programs for current staff.

Workforce management ensures operational efficiency by focusing on immediate needs. In contrast, workforce planning ensures the organization is prepared for future challenges and growth opportunities. Both are critical but operate on different timeframes and serve complementary purposes.

What is the primary aim of workforce planning?

The primary aim of workforce planning is to ensure the organization has the right number of employees with specific skillsets at the right time to achieve its objectives. This includes filling workforce gaps, optimizing staffing levels, and aligning workforce capabilities with future business needs.

What are the key components of workforce planning?

Workforce planning consists of several key components:

1. Workforce analysis: This step involves assessing the current workforce’s capabilities, demographics, and distribution—it’s crucial to understand the existing skills and competencies within the organization
2. Demand forecasting: Predicting future workforce requirements based on business goals, market trends, and anticipated changes in technology or consumer demand
3. Supply forecasting: Analyzing the internal and external labor market to anticipate the availability of required skills and talents
4. Gap analysis: Identifying the differences between the current workforce’s capabilities and future needs, highlighting areas that require development or recruitment
5. Action planning: Developing strategies to bridge identified gaps, which can include training programs, succession planning, recruitment, and retention strategies
6. Monitoring and evaluation: Regularly reviewing the workforce plan and its outcomes to ensure alignment with organizational goals and making adjustments as necessary

What are two types of workforce planning?

The two types of workforce planning are:

1. Strategic workforce planning: Long-term focus on aligning talent with organizational goals and future growth
2. Operational workforce planning: Short-term focus on day-to-day staffing needs, including scheduling and role allocation

What are the key steps in workforce planning?

The key steps for workforce planning are:

1. Assess current workforce: Look at your employees’ skills, roles, and overall performance. Check if your workforce’s size and composition align with your business needs
2. Forecast future needs: Consider where your business is headed and predict the skills and roles you’ll need to achieve your goals, like expanding services or adopting new technologies
3. Identify gaps: Compare your current workforce with future needs to spot missing skills, underrepresented roles, or areas requiring more staff
4. Develop strategies: Create a plan to address these gaps through hiring, training current employees, or preparing internal candidates for leadership roles
5. Implement the plan: Put your strategies into action, such as recruiting new talent, setting up training programs, or improving retention efforts to keep your best employees
6. Monitor and adjust: Regularly review how the plan works and make changes if your business needs or workforce priorities shift—keep it flexible to respond to new challenges or opportunities

Tip: Use a training matrix to track all training initiatives in your organization.

What is the most important part of workforce planning?

The most important part of workforce planning is accurately forecasting future talent needs. By understanding the skills and roles required to achieve business goals, organizations can proactively address gaps and prepare for growth, ensuring they have a sustainable, capable workforce.

What is an example of a workforce planning process?

An example of a workforce planning process is strategic hiring for expansion.
For instance, if a company plans to launch a new product line within the next year, the workforce planning process would involve:

1. Analyzing the skills required
2. Forecasting the number of employees needed
3. Identifying gaps in the current workforce

The company might decide to hire specialized engineers and marketers while developing internal training programs to upskill existing employees for supporting roles. This ensures the organization is fully staffed and equipped to meet future demands.

What are the key principles of workforce planning?

The key principles of workforce planning are:

• Alignment with business strategy: Ensure the workforce plan supports overall business goals.
• Data-driven decision-making: Use analytics to identify trends, gaps, and workforce needs
• Flexibility: Adapt plans to changing business needs or labor market conditions
• Employee development: Invest in upskilling and reskilling to prepare for future roles
• Diversity and inclusion: Consider diverse hiring and promotion practices to enrich the talent pool

Who is responsible for workforce planning?

Workforce planning is typically a collaborative effort involving HR, senior management, department heads, and sometimes external consultants. HR usually leads the process, ensuring alignment with organizational goals. At the same time, managers contribute insights into specific talent needs within their teams.

What is the role of HR in workforce planning?

HR’s role in workforce planning includes:

1. Analyzing workforce data
2. Identifying talent gaps
3. Forecasting future needs
4. Creating strategies to attract, develop, and retain the right talent

HR departments ensure the organization has the necessary skills and resources to meet its long-term goals and adapt to changes in the labor market.

Complementary resources:

• How to Implement a People Strategy in 10 Steps for Lasting Impact
• 10 Real-World People Strategy Examples from Leading Employers

Why is workforce planning important for businesses?

Workforce planning is crucial for businesses because it ensures they have a strategic approach to managing human resources. It helps in:

• Aligning workforce and business strategy: Ensures that the workforce supports the business’s strategic objectives
• Managing cost: Helps in optimizing labor costs by forecasting and managing workforce requirements effectively
• Enabling talent management: Facilitates proactive recruitment and development of talent, reducing skill shortages and turnover
• Managing risk: Identifies potential workforce-related risks and implements strategies to mitigate them
• Ensuring a competitive advantage: By forecasting future skills needs, businesses can develop a workforce that is ready to meet industry changes and challenges

What are the benefits of workforce planning?

Workforce planning helps organizations ensure they have the right talent to meet future needs, reduce turnover, and optimize staffing costs. It enables proactive recruitment, minimizes skills shortages, improves employee satisfaction by aligning roles with skills, and strengthens succession planning for critical roles.

How can workforce planning improve employee retention?

Workforce planning can improve employee retention through:

1. Career development opportunities: By identifying future skill needs, organizations can create career paths and development programs that encourage employee growth and satisfaction
2. Succession planning: Ensures that there are clear pathways for advancement, which can reduce turnover by providing employees with a sense of security and purpose
3. Work-life balance initiatives: Planning can include flexible work arrangements and benefits that support a healthy work-life balance, which is key to retaining staff
4. Employee engagement: A strategic approach to workforce planning can enhance employee engagement by aligning individual roles with organizational goals

How does workforce planning support succession planning?

Workforce planning supports succession planning by:

• Identifying critical roles: Recognizes key positions that require succession planning to ensure business continuity
• Developing a talent pipeline: Helps in developing a pipeline of qualified candidates ready to step into critical roles as they become vacant
• Developing leaders: Aligns leadership training programs with future organizational needs, ensuring a smooth transition of leadership
• Mitigating risk: By having a succession plan in place, organizations can reduce the risks associated with sudden departures

What role does workforce planning play in talent acquisition?

Workforce planning plays a critical role in talent acquisition by:

1. Identifying skills gaps: Helps in pinpointing the exact skills and competencies needed, allowing HR to tailor recruitment strategies to fill these gaps
2. Strategic recruitment: Enables the development of long-term recruitment plans that align with business growth and market trends
3. Employer branding: By understanding workforce needs and planning accordingly, organizations can enhance their employer brand to attract top talent
4. Resource allocation: Ensures that recruitment resources are allocated effectively, focusing on critical areas that drive business success

Read also:

• How to Perform a Skills Gap Analysis: An Actionable Step-by-Step Guide (+ Template)
• Going Global in 2025: Expert Insights From Deel’s Global Hiring Summit

What are the challenges associated with workforce planning?

Challenges in workforce planning include:

1. Data accuracy: Reliable data is essential for accurate workforce analysis and forecasting, but obtaining and maintaining this data can be difficult
2. Rapid market changes: The fast pace of industry changes can make it challenging to predict future workforce needs accurately
3. Resistance to change: Employees and management may resist changes proposed in workforce plans, especially if they involve restructuring or new technologies
4. Integration with business strategy: Ensuring workforce planning is fully integrated with the broader business strategy can be complex and requires strong leadership and communication

What metrics are used to measure the effectiveness of workforce planning?

Metrics used to measure workforce planning effectiveness include:

• Employee turnover rates: High turnover may indicate issues with workforce planning, such as mismatched skills or poor engagement
• Time to fill: Measures the efficiency of the recruitment process and how well workforce planning aligns with hiring needs
• Employee productivity: Assesses how well the workforce supports business objectives and whether staffing levels are optimal
• Skill gap analysis: Regularly measuring skills gaps can indicate how effectively workforce planning is addressing future needs
• Employee satisfaction surveys: Feedback from employees can provide insights into the success of workforce planning initiatives

Complementary resource: Craft Effective Job Satisfaction Survey Questions (with 100+ Examples)

How can technology aid in workforce planning?

Technology aids workforce planning by:

• Data analytics: Advanced analytics tools can provide insights into workforce trends, skills gaps, and future needs
• HR software: Platforms like Human Resource Information Systems (HRIS) streamline data collection and analysis, making it easier to forecast workforce requirements
• Predictive modeling: Machine learning algorithms can predict future workforce scenarios and suggest optimal strategies
• Collaboration tools: Facilitate communication and planning across different departments and locations, which is especially useful for global and remote teams

Seamless global workforce planning with Deel

Deel offers a holistic platform to support organizations in their expansion to the global marketplace and the future of work.

From visa support, EOR solutions, contractor management, and talent management, Deel helps you secure and develop the best talent anywhere you may need.

Additionally, our full HR suite, designed around the needs of companies operating globally and remotely, is always free.

Book a demo to see how our solutions will help your workforce planning process.