WHAT IS WORKFORCE

PLANNING?
A complete guide with definition,
benefits and strategy tips
Bailey Reiners
September 20, 2019
Updated: November 18, 2019

https://builtin.com/recruiting/workforce-planning

Workforce planning is critical for the health and growth of any organization. As
an HR professional, you know how much of an undertaking it is to hire the right
people with the right skill set at the right time. Then add on the responsibilities
of budgeting for new hires and internal promotions, keeping current
employees engaged and retention rates high, all while growing a business —
it's overwhelming.

To help you keep calm and workforce plan on, we created a brief guide that
covers the basics of workforce planning. Feel free to click on the links below to
jump ahead.

Table of Contents

• What is Workforce Planning?

• Benefits of Strategic Workforce Planning
• Stages of Strategic Workforce Planning
WHAT IS WORKFORCE PLANNING?

Image via Shutterstock

Workforce planning is the process of auditing, predicting and managing the
employment needs of your company in relation to its greater strategic
business goals.

Think about it this way, your product team is constantly evaluating the product
— what customers like and want more of — while at the same time predicting
what’s going to be the next big thing. Similarly, your company needs to
continuously evaluate its people — what they like and don’t like in their roles
— as well as how the company is projected to grow and who will need to be
hired, promoted or reorganized to meet those needs.

WHAT IS WORKFORCE PLANNING?

Workforce planning is the process of auditing, predicting and managing the
employment needs of your company in relation to its greater strategic
business goals.
When it comes down to it, the goal of workforce planning is to help your
workforce meet the following criteria as closely as possible:

Image via Analytics in HR

BENEFITS OF STRATEGIC WORKFORCE PLANNING

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Workforce planning is a massive undertaking, especially the first time you do it.
It can be difficult to know where and how to start as well as what resources are
required to build a strategic workforce plan. Before we delve into the details,
 check out a few benefits of creating a workforce plan that make the effort
worthwhile.

• Help teams justify additional hires

• Save time and money by anticipating growth and change
• Prepare for organizational changes proactively
• Support finance team in budgeting for future workforce needs
• Collaborate with the strategic business planning process
• Recognize gaps in the workforce that need filling
• Identify critical roles and teams to expand for growth
• Balance business goals alongside hiring
• Prioritize employee retention and engagement to reduce hiring needs

STAGES OF STRATEGIC WORKFORCE PLANNING

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ANALYZE STRATEGIC DIRECTION
In order to plan for future workforce needs, you first need to analyze the
current state of your workforce. Start by answering these questions:
• What departments are running lean and could use additional support?

• What is the manager-to-direct report ratio?

• What individual contributors are ready for a promotion?

• Do current employees need additional training to advance their careers at the

company?

• Is there a skills gap among current employees that needs to be filled by an

external hire?

• How long do employees typically stay at your company?

• Why do employees leave your company?

To answer the majority of these questions, you need to take a deep dive into
your overall employee lifecycle, which will also help you better understand
why people apply for roles at your company and why they leave.
Additionally, look carefully at your recruitment metrics so you can better
optimize your strategy.

FORECAST WORKFORCE SUPPLY & DEMAND

Now that you've analyzed the current state of your workforce, look more
closely at the employees you currently have, otherwise referred to as your
workforce supply, and predict how their roles will change over time. These
factors play a significant role in how, who and when you should hire
candidates. Key areas to consider are:
• Employee retention: Determine roles that can be filled by internal candidates

through promotion or professional development

• Turnover: Anticipate turnover by knowing individual employee goals and

career paths.

• Departmental attrition: Are certain departments or roles becoming obsolete

or less valuable to the company, and if so, will you need to downsize or

reorganize.

• Physical office space: Is there enough physical office space and equipment to

sufficiently support more employees?

• Recruiting resources: Identify which roles need to be filled by external

candidates what resources your team will need to recruit them — professional

recruiters, money for job boards and advertisements, etc.

• Communications resources: Recruiting and building an employer brand

consumes a significant amount of time and resources. Check to see if anyone

on your marketing team has the bandwidth to help out.

Once you’ve estimated your current workforce supply, you’ll want to consider
the demand of each area. Understanding the difference between supply and
demand in your workforce will help you identify gaps between what resources
are readily available and what resources your organization needs to grow on
track. In terms of workforce demand, you’ll want to look at:
• Employment market: Take a look at the recruitment market to see which roles
are in high demand and will be difficult to hire.
• Upcoming funding: What roles are critical right now and which ones can wait
until you raise more capital?
• Skills training: Will you need to train new or current employees skills to ensure
they will keep up with change, or will you need to hire already skilled
candidates for the roles.

Keep in mind the supply and demand of workforce planning will change over
time so it's important to include your team in the workforce supply planning
process because the decisions made will ultimately affect their jobs and
careers.

CREATE A WORKFORCE PLANNING BUDGET

At this stage, you should have a fairly detailed blueprint of who you have
employed today, who you will need in the future and any gaps between the
two. Now, you need to start prioritizing your roles by the most difficult to fill,
highest priority and cost-per-hire.
How you prioritize roles will also depend on your external hiring and internal
retention budgets. To hire talented candidates — and pay them what they’re
worth — you need to determine a budget through workforce planning.
Figure out how long it takes to hire someone and how much it will cost by
comparing your external hiring budget to your current recruitment metrics. By
looking at the metrics, you should also be able to pinpoint areas of the
recruitment strategy that need improvement.
SET A HIRING TIMEFRAME

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From here, build out a timeline that prioritizes certain roles and takes into
account how long it will take to hire each role. This timeline can span
between one year to 10 years depending on your strategy. Regardless of how
far out your strategy spans, include intermittent short term goals throughout
the plan to ensure you're always pacing on track.
Also, keep in mind this plan is not set in stone, it will fluctuate over time and
require adjustments along the way.

REEVALUATE WORKFORCE PLAN

Once you’ve created a workforce plan, you’re not done. In fact, you will
constantly be monitoring the workforce needs of your company as business
goals change and your internal workforce evolves. It's important
to frequently get feedback and buy-in from employees, especially as the
company grows.
If you create a culture that is open to having tough conversations with
employees about their roles, performance and future career, you will be
significantly better equipped to anticipate and adjust your workforce plan as
changes occur. Employees will also be more keen to stay at your company and
refer cohorts to open roles, thus further simplifying your recruiting and
retention process. Even as the plan you create changes over time, it will always
be a guideline for your teams to assess the effectiveness of their strategies and
keep them on track over the course of several years.