Workforce planning is a core business process to align changing organisation needs with people strategy. It can be the most effective activity an organisation can engage in. It doesn’t need to be complicated and can be adjusted to suit the size and maturity of an organisation. It can provide market and industry intelligence to help organisations focus on a range of challenges and issues and pave the way for operational initiatives to directly support longer term business goals.

This factsheet examines the concept of workforce planning and looks at recent developments. It examines the distinction between strategic and operational workforce planning, 'hard' and 'soft' workforce planning, which work in conjunction to generate, analyse and action information. The factsheet explores the different stages of the workforce planning process and highlights a number of key issues and action points around its implementation.

CIPD viewpoint

Workforce planning presents an important opportunity for the senior leadership team, HR directors and board members to drive the strategic end of the process and set the agenda for workforce change.

While HR practitioners appear to recognise the importance of workforce planning in principle, for many there is a ‘knowing–doing’ gap and many practitioners are actively seeking better solutions to the challenges of workforce planning. Issues of world economics, technology, demography and changing social attitudes constantly influence how organisations are resourced. We believe workforce planning can help to enable sustainable organisation performance by providing the basis for better decision-making about the future people needs of the business.

Workforce planning is a process of analysing the current workforce, determining future workforce needs, identifying the gap between the present and the future, and implementing solutions so that an organisation can accomplish its mission, goals, and strategic plan. It’s about getting the right number of people with the right skills employed in the right place at the right time, at the right cost and on the right contract to deliver an organisation’s short and long-term objectives.

Larger organisations may have dedicated workforce planning teams. Others may start the process as a result of a specific event such as a merger, acquisition or a transformational change project. But a focus on broader workforce planning can be important to an organisation at any time. It can uncover obstacles or unrealistic targets that could hinder strategic change and provide solutions to mitigate risks to support future strategic objectives.

Workforce planning processes can:

  • reduce labour costs in favour of workforce deployment and flexibility
  • identify and respond to changing customer needs
  • identify relevant strategies for focussed people development
  • target inefficiencies
  • improve employee retention
  • improve productivity and quality outputs
  • improve employees’ work-life balance
  • make recommendations to deliver strategic value through talent.

In turn, this will inform HR practices such as:

  • organisational design and development
  • succession planning
  • work-life balance initiatives such as flexible working and well-being
  • recruitment and selection
  • retention planning
  • talent management
  • job design
  • career planning
  • learning and development focus
  • reward and recognition.

For more information on some of these topics, view our other factsheets on talent management, succession planning, recruitment, flexible working, job design and identifying learning and development needs.

Workforce planning can vary in timeframe, scale and the types of roles it considers. It may be viewed in fairly basic operational terms, ensuring the right number of people with the right skills are allocated to projects or work areas to fulfil day-to-day customer needs or demand for products and services. Examples might include the need to ensure call centres are appropriately staffed or that sufficient people are recruited to fulfil a predicted demand for certain products or services. An alternative approach is to create a longer-term plan that ensures that the best talent is in the right roles and develop a better understanding of what sort of future workforce is likely to be needed. Many HR practitioners link workforce planning to talent planning or succession planning and feed the results into resourcing plans implemented locally by line managers.

Whatever its precise form, workforce planning should be linked to the organisation’s goals and viewed as an important part of the strategic business planning process.

Our guides Workforce planning practice (for CIPD members) and Preparing for Brexit through workforce planning give more detail and a variety of approaches.

Recent developments in workforce planning

The original concept of workforce planning fell out of favour around the early 1980s as some commentators deemed it an inflexible process that failed to predict or allow for downturns in economic growth. One of the perceived failures was that of forecast targets being too narrow and therefore being missed.

More recent interpretations of workforce planning, based on less rigid forecasting, with more flexible target ranges and a greater role for contextual understanding, mean that the technique is an increasingly useful tool for the HR profession. This is especially true as organisations strive to be entrepreneurial, proactive and lead rather than follow change: It’s crucial to be adequately staffed to be prepared for future changes.

Modern approaches to workforce planning are often informed by management information systems such as PESTLE analysis.

Workforce planning is about generating information, analysing it to inform future demand for people and skills, and translating that into a set of actions that will develop and build on the existing workforce to meet that demand. Understanding of the distinction between ‘soft’ and ‘hard’ workforce planning can help to explain the recent resurgence of interest:

  • ‘Hard’ workforce planning is about numbers: predicting how many people with what skills are likely to be needed. In recent years, the use of basic numerical or statistical data forms has become embedded in management information systems that can help understand cause and effect of certain phenomena, together with an understanding that metrics alone are not enough, but rather they need to be analysed and understood in context.

  • ‘Soft’ (or strategic) workforce planning is about defining a strategy or developing a strategic framework within which information can be considered. With an increased emphasis on agility and responsiveness, there is a growing realisation that good-quality management information set within such a framework is the key to identifying and maximising the drivers of performance. This approach to planning gives managers the opportunity to consider a range of possibilities before reaching a stage where they are forced into action by circumstance.

A number of key issues are associated with the start of the process:

  • Workforce planning flows from organisational strategy and links people management into the operational business process. Read more on this in our strategic human resource management factsheet.

  • Workforce planning is an integral part of people management and provides the context for most other activities concerned with acquiring, developing and deploying people. Find out more in our Resourcing and talent planning survey reports.

  • The planning process must be organisation-wide and requires effective communication between HR and the rest of the business as well as input from a variety of stakeholders.

  • Good-quality information is vital for good planning and this information must flow both from within the organisation and from external sources.

The workforce planning process can take many forms but is essentially about operationalising the business strategy into a set of actions to ensure a workforce capable of delivering the organisation’s strategic goals and objectives.

The process should not be overly complicated. It’s important to involve stakeholders from all parts of the organisation and ensure that they can understand the data and what it means for both short- and long-term resourcing needs.

It’s convenient to describe workforce planning as a series of steps. However, it is equally important to realise that it’s an iterative process as indicated in the diagram below, not a rigidly linear one.

The main stages are:

  • Understand the organisation and the operating environment: What does the organisational structure look like now and what’s likely in future? What are the plans to increase productivity, including changes to organisation structure and processes? Are there intentions to introduce or update technology, remembering people remain at the heart of work?

  • Analysis of the workforce: Identify the knowledge, skills, abilities, demographics, talent profiles, attrition rates and other factors such as employees’ views on job security, satisfaction and intention to leave. Include other parameters, such as people by geographical location or business division (some functions stretch across divisions), demographic differences within the workforce or contractual differences as to how work is resourced. In a fast-paced working environment, innovation, agility and resilience are essential for organisations to retain their competitive advantage. Collecting and analysing workforce data can provide organisations with the information they need to develop capability in these areas.

  • Determine future workforce needs: Identify future skills and capabilities and predict the timeframes involved. Scenario planning can be used to show different futures affecting people requirements. Such an exercise can help to formulate Contingency and Adaptive plans to mitigate potential risks to achieving future goals.

  • Identify gaps in the workforce: Identify gaps in skills and knowledge to deliver future business plans. Bear in mind that future roles will often involve a greater use of technology and require a greater digital awareness. Where recruitment, retention, or both, present a resourcing challenge, greater focus will be needed to build required skills via staff development or by borrowing them via outsourcing or the ‘gig economy'.

  • Develop an action plan that allows for functional, numerical and adaptational flexibility: An agile workforce who can adapt to change will contribute greatly to a change-ready organisation which can proactively restructure as a result of progress.

  • Monitor and evaluate action plans and solutions: A set of actions should be developed and agreed with appropriate support and information for managers and regular reviews of the outcomes. It’s important that clear evaluation processes should be designed and embedded into all stages of the process.

To help with these stages, see our factsheet on employee turnover and retention.

Workforce planning will only add value if it can be positively and successfully implemented in practice. Some of the key issues are:

  • Generate consensus on the plan: A collaborative approach is vital. It will involve wide-ranging consultation with stakeholders to enable all parties to agree and understand the rationale for the actions being taken.

  • Ensure clear allocation and understanding of responsibilities: It’s essential that all those involved are clear about what they are responsible for and what actions they need to take.

  • Provide support for managers: Line managers will need support from HR and others to fulfil their responsibilities and ensure they have the skills and understanding to fully participate in the planning process and act on the outcomes. For example, the skills to interpret data, to input good quality information and performance analysis are essential.

  • Review and capture learning: The process needs to incorporate clear and robust mechanisms to review and capture learning and feed this back into the process. The evaluation criteria will depend on the objectives. Essentially, workforce planning is about trying to predict the future to inform decision-making so evaluation needs to relate to the outcomes of those decisions and their consequences. Evaluation should be iterative - the more proficient organisations become at planning the more likely they are to be able to identify relevant evaluation criteria to demonstrate their ability to make more accurate future predictions.

When putting a workforce plan together, HR practitioners should consider:

  • Inputs to the plan: What information will be relevant? Does the organisation have good quality data?

  • Implementation and communication: Supporting managers to act on the plan and use appropriate language and figures.

  • Measurement and evaluation: What criteria will be used to assess the success of the plan? How will it be reviewed and refreshed?

The following points are key when implementing workforce planning:

  • It starts with the organisational strategy and business plan and it’s essential to make sure that HR is involved in the business planning process.

  • It needs to be ‘future-focussed’ to enable the organisation to deliver the business strategy while at the same time remaining flexible enough to deal with constant change.

  • It’s a dynamic process and should be subject to constant feedback and review if it’s to remain relevant in a rapidly changing environment.

  • It’s not just about numbers. It is also about skills, potential and how these are deployed and organised. As such it links into development, career planning, talent planning, organisation design and a number of other HR practices.

  • The process encompasses the whole organisation and requires buy-in at all levels to be effective. It should seek to enable co-operation between managers and minimise any competition between departments for people resources.

  • It brings together the operational and the strategic planning processes. There’s a need to be able to think strategically whilst acting practically to ensure that the various stages are carried out as effectively as possible.

  • It’s as much art as science. No single formula exists that will give a ‘correct’ workforce plan. However, with a wealth of data available, the art is about bringing this together and interpreting it in a meaningful way.

Books and reports

INCOMES DATA SERVICES. (2011) Workforce planning. HR studies. London: IDS.

TAYLOR, S. (2014) Resourcing and talent management. 6th ed. London: Chartered Institute of Personnel and Development.

Visit the CIPD and Kogan Page Bookshop to see all our priced publications currently in print.

Journal articles

FARAGHER, J. (2017) How to solve workforce planning – before you become the next Ryanair. People Management (online). 23 October.

MAYO, A. (2015) Strategic workforce planning: a vital business activity. Strategic HR Review. Vol 14. No 5, pp.174-181.

TUCKER, E. (2017) 3 keys to closing workforce planning gaps. TD: Talent Development. Vol 71, No 11, November. pp34-38.

CIPD members can use our online journals to find articles from over 300 journal titles relevant to HR.

Members and People Management subscribers can see articles on the People Management website.

Ally Weeks

Ally Weeks: HR Consultant

Ally is an HR practitioner with 20 years UK and international experience within small, medium and large blue chip businesses. A subject expert in talent management, succession planning, workforce planning and recruitment, Ally is currently an HR consultant and trainer for the CIPD and lead tutor for the Level 7 RTM (Resourcing and Talent Management) programme. She advises clients on integrating learning activity with wider commercial issues and the strategic direction of their organisation. Ally is highly adept at determining the most appropriate delivery methods, including online learning, and is experienced in 'hands on' training delivery. She also advises on monitoring the impact of learning interventions.

More recently she has focussed on writing content for CIPD’s online digital Certificate qualifications and Future of HR in partnership with Avado. She speaks at CIPD branch events and conferences on attracting talent, resourcing strategies and trends, strategic workforce planning and new learning technologies.

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