Practical guidance on what workforce planning is, why you should do it, and how to design and implement the planning process
Workforce planning is getting the right number of people with the right skills employed in the right place at the right time to deliver an organisation’s short- and long-term objectives. It covers a diverse range of activities, such as succession planning, flexible working, job design, and many more. Whatever its precise form, workforce planning should be linked to strategic business goals and viewed as an important part of the strategic business planning process.
This factsheet examines the concept of workforce planning and looks at recent developments. It examines the distinction between 'hard' and 'soft' workforce planning, which work in conjunction to generate, analyse and action information. It also explores the different stages of the workforce planning process and highlights a number of key issues and action points around its implementation.
Workforce planning is a core HR process and presents an important opportunity for HR to ‘raise the bar’ and build and support strategic planning to achieve business objectives. 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. In a volatile, fast-changing economy, workforce planning can help to enable sustainable performance by providing the basis for better decision-making about the future people needs of the business.
What is workforce planning?
Workforce planning is a process to ensure the right number of people with the right skills are employed in the right place at the right time to deliver an organisation’s short- and long-term objectives. It embraces a diverse and extensive range of activities which will vary between organisations and contexts. They may include:
- succession planning
- flexible working
- labour demand and supply forecasting
- recruitment and retention planning
- skills audit gap analysis
- talent management
- job design
- risk management
- career planning
- scenario planning.
Workforce planning can also vary by timeframe 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 are allocated to projects or work areas to fulfil day-to-day customer needs or demand for products and services. Examples of this 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 focus is creating a longer-term workforce plan that ensures that the best talent is in the right roles and develops a better understanding about what sort of workforce is likely to be needed in the future.
Many practitioners link workforce planning to talent planning or succession planning and tend to feed the results of planning into resource plans that are implemented locally by line managers.
Whatever its precise form, workforce planning should be linked to strategic business goals and viewed as an important part of the strategic business planning process.
More detailed information, together with case studies of a variety of approaches to workforce planning, is available in our guide Workforce planning: right people, right time, right skills.
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 of previous approaches to workforce planning was that of forecast targets being too narrow and therefore being missed.
However, 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 among the HR profession. For example, in healthcare, the need for medical professionals with particular skills would involve the analysis of trends in illnesses and conditions among the local and wider population while in retail a consideration of changing trends in such areas as consumer demand and online shopping might help inform the workforce planning process.
These modern approaches to workforce planning are often informed by management information and analysis systems such as PESTLE that is, relating to political, economic, sociological, technological, legal and environmental factors).
What does workforce planning involve?
Workforce planning is about generating information, analysing it to inform future demand for people and skills and then translating that into a set of actions that will develop and build on the existing workforce to meet that demand. An understanding of the distinction between ‘soft’ and ‘hard’ workforce planning can help to explain why there has been a recent resurgence of interest.
‘Hard’ workforce planning
‘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’ workforce planning
‘Soft’ 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.
Key issues to consider
A number of key issues are associated with an initial consideration of workforce planning:
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. For further details, see our latest Resourcing and talent planning survey report.
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.
Stages of the workforce planning process
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 of workforce planning 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.
The stages are:
Determine business strategy – organisational strategy, operations plan, people strategy.
Analyse and discuss available data – input information from data collection exercise, input resourcing information from HR business partners and business managers.
Agree objectives of the plan – review labour supply data, both internal and external, review workforce capability to deliver the plan.
Determine actions and implement plan – agree assessment and evaluation criteria, regularly review outcomes.
A set of actions should be put forward and agreed with appropriate support and information for managers and regular review of the outcomes. It's important that clear evaluation and review processes should be designed and embedded into all stages of the workforce planning process.
Implementation of workforce planning
Workforce planning will only add value if it can be positively and successfully implemented in practice. Some of the key issues in implementation are summarised below.
Attain consensus on the plan – a collaborative approach is vital and 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 – a variety of people participate in the planning process but it is essential that all those involved are clear about what they are responsible for and what actions they need to take to ensure that the outcomes of the planning process are successfully implemented.
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 perform 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 planning process. The evaluation criteria that will be useful will depend on the objectives of planning. 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 is iterative and 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.
Action points for workforce planning
When putting a workforce plan together there is a need to 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 action points should be taken into account when implementing workforce planning:
It starts with the 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 technique is 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.
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.
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CRUSH, P. (2011) Who fails to plan. Human Resources. August. pp46-49.
HARTTIG, M.A., STROZIK, M. and MUKHERJEE, A. (2010) Global workforce planning. Benefits and Compensation International. Vol 40, No 1, July/August. pp19-20,22-23.
MAYO, A. (2015) Strategic workforce planning: a vital business activity. Strategic HR Review. Vol 14. No 5, pp.174-181.
PANDEY, J. (2016) Digitizing strategic workforce planning. Human Capital. Vol 19, No 8, January. pp38-39.
WOLFF, C. (2012) How employers align HR with the business: 2012 XpertHR survey. IRS Employment Review. 30 July. 10pp.
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