Four key steps in workforce planning

4 minute read

Workforce planning is essential to ensuring that the changing needs of the organisation are aligned with the people strategy. In the first of two extracts from her forthcoming book on Strategic Human Resource Management, Karen Beaven outlines the key steps

Karen Beaven

Workforce planning


The process for workforce planning can be categorised in four steps as shown below.

Workforce planning stages


1. Define business objectives

As a starting point it is essential for business objectives to be articulated in order to provide clarity to the workforce planning process. This can be done in the form of a strategy, a vision, mission and goals at a top level and then broken down further to obtain additional detail at division and business function level. It is then possible to develop a strategic people plan which aligns with these objectives. In addition, by extending the objective identification to divisional level it’s also possible to pick up on any incongruencies and establish if any sub-narratives and plans exist at idea conception or proposal stage that may impact on the overall direction of the business and workforce planning requirements. When objectives are identified it is then possible to determine what core competencies and skills will be required in which areas in order to support the growth of the business and drive it forwards.

The business objectives can then be considered in the context of talent development, talent acquisition and then finally gaps and risks. With regard to talent development, the identified objectives will indicate what learning interventions and programmes will need to be developed in order to provide the required skills mix for the business. It will also provide insight into how top performers should be identified and motivated in order to retain them. In relation to talent acquisition, defining the objectives will highlight how the recruitment strategy will need to evolve in order to find, assess and locate the right talent that will be essential to ensuring that the goals of the organisation can be achieved. Through this process gaps will begin to emerge and present the question of how the organisation should mitigate any skills shortages resulting from business repositioning and growth.

Other important factors that may arise from this process are likely to link to issues surrounding location, mode of operation and projected increases or decreases in volume of work.

For this reason, defining business objectives is an essential first step in workforce planning and one that should be invested in to ensure any plans created are of the highest quality and will be an accurate tool essential to support business growth.

2. Evaluate the current workforce

The second step involves ensuring that you have an accurate picture of the current workforce and trends within the organisation. This enables you to evaluate the gap between the future requirements of the business and the current reality. From this it is then possible to establish an effective gap-closing strategy. In order for this process to be effective it is essential for the HR professionals who are conducting this activity to have access to robust data and analytics concerning the current workforce. This data should include the following information:

  • Employee data, including demographics, salary information, employment type, length of service and distribution of employees per division
  • Labour turnover statistics per division and role type
  • Recruitment data, including time to hire, sources of hire, quality of hire and cost per hire
  • Competency measures which distinguish skills and abilities of the current workforce and track progress of development activities
  • Reward data such as information on how employees at different levels are recognised and rewarded for their work
  • Utilisation of contract workers should be clearly measured and articulated, as should fluctuations in any supplementary temporary workers

It’s also important to note that this should not be a purely desk-based activity. The real value here comes from combining the data with intelligence and insight from key influencers and decision makers in the business who may have additional context connected with pending budget changes, market influences and proposed structural changes that are not immediately obvious. Where possible it is also beneficial to obtain insight into competitor organisational structures and talent acquisition trends in order to maintain an effective map of external influences and challenges to talent retention.

3. Establish future requirements and identify any gaps

The data relating to the current workforce can be evaluated against the future business requirements identified from the business objectives in step 1. This should be worked through on a division- by-division basis and then a holistic top-level summary mapped for the organisation. This gap analysis should include predicted areas of skills shortage, areas where headcount is predicted to reduce, labour turnover rates, succession planning predictions, talent acquisition metrics predicting time to hire and cost per hire, and correlation of activity with business objectives.

4. Establish a plan to address gaps

An effective plan to close the gaps should be an essential part of any HR strategy, as this is key to increasing the capability, capacity and productivity of the workforce. It is possible to get some measure of this through utilising predictive analytics and deploying forecasting techniques, but the plan should be worked through in collaboration with key stakeholders and verified by the senior leadership team. The plan should identify which areas need to be addressed in which priority order in order to best support the business objectives. The strategy should include measures to recruit and retain the best-quality employees for the business and then also ensure that the processes and operational structure of the business are such that they then enable those individuals to deliver great work and operate at peak performance levels.

This is an extract from Strategic Human Resource Management: An HR Professional’s Toolkit by Karen Beaven, published on3 February 2019. The extract is reproduced by kind permission of Kogan Page

Published 23 January 2019. This is an edited extract from
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