Workforce planning is the continuous process of forecasting an organisation’s future workforce needs, to ensure the right people with the right skills are in the right roles at the right time and cost.
What is workforce planning?
Workforce planning aligns business strategy with the people and skills needed to put that strategy into practice. It means assessing current talent supply and skills, identifying gaps, and taking action to overcome any shortfalls.
This might include hiring, training, reskilling, redeployment, outsourcing or automation. To do workforce planning successfully, it requires a range of business functions, like HR, finance and business leadership. It’s data-driven and balances immediate operational needs with long-term capability building.
Things to know
- Workforce planning is an ongoing, not a one-off, activity and should be revised often as business strategy and market conditions change
- It can be broken down into several time periods: operational (0–12 months), tactical (1–2 years) and strategic (3+ years)
- Successful workforce planning is driven by reliable data and accurate forecasts (from resources such as human resource information systems (HRIS), payroll, performance and market labour trends)
- What-if analysis helps prepare for any uncertainties caused by growth, contraction, automation or market shifts
- Effective workforce plans cover short-term fixes (such as ‘when needed’ labour hires) and longer-term strategies, like reskilling the current workforce
- Diversity, equity and inclusion (DEI) objectives should be built into workforce plans to drive fair access to opportunities and future-proof talent pipelines
FAQs
What is workforce planning?
Workforce planning is the on-going process of assessing future workforce needs and current capabilities, identifying gaps and then taking action to fill them so the business can meet its strategic objectives.
What problems can poor workforce planning cause?
If not undertaken correctly, workforce planning can lead to talent shortages or surpluses, increased hiring costs and timelines, reduced productivity, staff burnout, poor customer service and missed strategic opportunities.
How can workforce planning be implemented or improved?
Take a multifaceted approach — engage business leaders, align the available talent with business strategy to spot gaps, improve HR and payroll data quality, use scenario modelling, prioritise critical roles and capabilities, and create clear action plans with owners, timelines and metrics.
What role does the HR team play in workforce planning?
HR should lead the process design and coordination, provide skills inventories, work closely with business leaders to understand demand, develop talent strategies (such as recruitment or learning) then track metrics and progress.
What metrics indicate effective workforce planning?
Common metrics include forecast accuracy, critical-role coverage, time-to-fill for priority positions, internal mobility rates, skill-gap closure rates, cost-per-hire and staff turnover rates — especially among high performers.
