How to Do Workforce Planning

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In this article, you will learn 1) about the introduction – what workforce planning is and why it is necessary, 2) workforce planning essentials – the “hows” of planning, 3) stages in strategic workforce planning, and 4) workforce planning tools.


What is Workforce Planning?

Workforce planning is the ongoing process by which the objectives and priorities of an organization are sought to be met by optimizing human resources. Workforce planning is one of the most vital factors that contribute to organizational performance. Planning your workforce helps you to align it with your company’s business plan. It makes it possible to focus on your organization’s staffing needs. Workforce planning helps manage the organizational culture and makes it easier to anticipate and handle risks.

Why is Workforce Planning Necessary?

Workforce planning is necessary because it helps to identify workforce issues, set workforce goals and objectives, and to formulate workforce strategies. The key reasons for workforce planning are:

  • To incorporate a smooth business cycle. It is possible for you to smooth out your business cycle by incorporating processes that ensure optimal utilization of available talent resources. The payoffs are huge.
  • To minimize delays. When the right number of employees is allocated, production goals are met.
  • To induct the right talent. Having the right kind of talent in your workforce means that production development is optimized.
  • To give employees a shot at self-development. Since a lot of new and existing resources are trained to be up to the challenge, it creates a new avenue for employee skill development.
  • To identify problems and to prevent problems at an early stage. Human resources is undoubtedly the department that is closest to your employees. It is entirely up to the HR department to proactively observe any problems, however minor, and report them to management.
  • To avoid surprises. Human resources is often faced with the dilemma of having to fill up positions that are vacant due to a sudden employee turnover. Often times, the balance in the workforce is seriously challenged by a surplus or shortage of talent. Good workforce planning ensures to a large extent that such unwanted surprises are kept to a minimum and that enough time is always at hand to fill vacancies without affecting production or services.
  • To take advantage of opportunities. Depending on the efficacy of your workforce, you will have to decide between fire fighting and taking advantage of new opportunities. When management is efficient, it will free up enough time for HR professionals to partake in talent-sourcing opportunities.
  • To build a positive image for your business. A well managed business that is always prepared to face any emergency and eventuality creates a positive image for itself in the industry. A firm with a credible image lures in CFOs and investors.


Key Areas of Workforce Planning

Workforce planning, though a very interesting process in itself, is difficult to define, especially when it comes to creating a step-by-step chart of activities involved. However, these activities can still be broadly classified as follows:

Forecasting talent

Talent forecasting is a process by which future talent requirements are predicted and planned. There are four primary components of a talent forecast:

  1. An estimate of the future performance of the company – in terms of growth, output and revenue.
  2. An estimate of the changes in talent necessary to cater to the growth of the company. This includes both quantification and allocation of employees.
  3. An estimate of future vacancies in the workforce that need to be filled proactively.
  4. An estimate of human resources available both within the organization an outside that will have to be inducted to meet forecasted company goals.

Creating action plans

Another big challenge in the workforce planning process is the need to create talent action plans. Talent action plans should not only deal with inducting talent, but should also demonstrate how talent can be retained and re-deployed. There are three general activities of talent action plans:

  1. Inducting the requisite talent and leadership. It is important to identify external sources from where future leaders can be inducted, so that the company never falls short of key talent.
  2. Ensuring internal growth and development of key talent. As much as it is important to find key talent externally, it is equally important to groom internal human resources to cultivate future leadership within your company.
  3. Forecasting and bridging gaps between talent requirement and availability. It is extremely important to understand where exactly your company stands in terms of key talent and leadership resources. It is also equally important to forecast future talent and leadership requirements of your company and take necessary steps to bridge the gap between requirements and the supply of talent.

Integrating and implementing plans

A plan, however good, will only be useful when it is correctly implemented. A plan will only be successful when it is compatible with the future requirements of the company. Also, every plan needs to be integrated with each and every aspect of HR. A healthy discussion before the actual implementation ensures that the plan has adequate support across the workforce. Discussing also helps identify hindrances or objections to implementing the proposed plan. As far as objections are concerned, most of them can be sorted out by offering rewards and engaging in effective communication.

Major Components of Workforce Planning

There is no generic formula or accepted list of components for a workforce plan. However, there are certain components that are common to most workforce plans. They include:

  • Forecasting and assessing: Forecasting and assessing ensures that the current and future requirements of an organization are documented. Assessment has to be done in multiple areas such as labor costs, company revenue predictions and growth rate predictions.
  • Designating plans: Succession planning involves identifying and developing internal talent in order to designate newer and bigger responsibilities. Succession planning ensures the ready accessibility of experienced employees.
  • Developing leadership: Leadership development is the process of periodically training highly-prospective employees to take on bigger challenges in the form of leadership roles.
  • Recruiting relevant people: It is very important to make a proper estimate of head count, open positions, employment locations, recruitment timing, etc.
  • Retaining and re-deploying: Along with identifying fresh sources for inducting new talent, it is imperative for a company to have in place a system to determine and control employee turnover.
  • Creating contingency plans for your workforce: It is always helpful to try and forecast what percentage of your workforce is going to be contingent and classify contingent employees by position and grade.
  • Performance Mapping and Management: Performance management is a process in which employees and managers discuss and decide what an employee’s work objectives should be. Performance mapping helps managers get the desired output from their teams via training.
  • Career counseling and internal opportunities: Career counseling should be a top priority for a manager. Career counseling helps employees manage and plan their careers and helps them move up the ladder.

Levels of Workforce Planning

In generic terms, there are two levels of workforce planning – strategic and operational workforce planning.

  • Strategic Workforce Planning: Strategic workforce planning is concerned with all strategies pertaining to the organization’s strategic plan. It addresses external factors that impact the business, like budget cuts, and decides on the appropriate response by the company. It helps to maintain equilibrium in the workforce by introducing in-service training, and helps managers in mitigating risks.
  • Operational Workforce Planning: Operational workforce planning happens at the manager/supervisor level and it takes care of work-unit issues, e.g., the unit’s capability to successfully implement the company’s business strategies.


Strategic workforce planning (SWP) is crucial across the organization and especially in departments like human resources, recruiters and talent acquisition professionals, and for line managers and the general staff. SWP is carried out in three discrete stages – the planning stage, the development stage and the implementation stage.

I. Planning Stage

In the planning stage, four activities are carried out:

Reviewing organizational strategies and workforce goals

Workforce goals are vital in that they address key workforce issues. Desired outputs are stage-managed although specific strategies and performance measures cannot be accurately determined. It is best to restrict setting workforce goals to include only the most critical business issues like managing and reducing employee turnover in core positions, channeling recruitment initiatives to support particular programs, fulfilling certain region-based staffing requirements, preparing for retirement of key staff including managers, senior technicians, etc., creating a decentralized workforce by cross-training employees, and enhancing employee performance to meet newer requirements.

Accessing planning data and performing workforce profiling (if needed)

This also includes operational and management planning and environmental scanning. Workforce profiling is done based on criteria like:

  • Specialization
  • Tenure
  • Location
  • Age
  • Gender
  • Knowledge, qualifications and skill sets
  • Employment type

Defining workforce requirements (by assessing current and future skills demand)

Identifying future demand for skills of the workforce is the primary reason behind creating workforce requirement definitions. It is of utmost importance to identify all conceivable scenarios based on future trends. Workforce planning should also include a comprehensive list of all current skill sets that will no longer be applicable in the future. At the same time, all possibilities for newer skills should be accounted for and plans should be made to recruit suitable talent in order to bridge current and future workforce gaps.

Researching the market

Market research is a dedicated study of target markets and potential customers. Market research helps a company maintain a competitive edge over their rivals. The methods used in market research include both statistical and analytical techniques. Market research dictates how a product can be marketed and what segment(s) of the customer base needs to be targeted. The following information can be derived from a well-accomplished market research initiative:

  • Information about the market: This includes information about the different commodities already available on the market, along with their prices, target segments and the overall supply and demand scenario.
  • Market segmentation: Market segmentation takes into account the various deviations in the market like geographical and demographic differences, technographic and psychographic differences, etc. Market segmentation basically divides the market into subgroups with similar driving forces.
  • Market Trends: Market trend analysis is the study of the fluctuations in a market over a period of time.
  • SWOT analysis: Strength, Weakness, Opportunities and Threat (SWOT) Analysis is a comprehensive analysis of any business entity that is carried out right from the initial phases of the company and is performed throughout the life-cycle of the company. A SWOT analysis helps your company to decide what product to develop and how to market it.

II. Development Stage

The development stage activities are classified as follows:

Modeling the workforce

Workforce modeling is the process by which current and future workforce requirements are matched to workforce availability. Components of an ideal workforce model include:

  • Demand management: Demand management is the process of tracking workforce demand at both macro and micro levels.
  • Employee availability: Employee availability is the calculation of workload and responsibility areas, including work hours and shift timings for each employee in the organization.
  • Employee preference: Employee preference is the process of allocating work, work hours, etc. according to an employee’s preference. The aim is to create goodwill and job satisfaction among employees.
  • Workflow management: Workflow management is the process of automating otherwise manual tasks like time-off approvals, shift-change approvals, etc.
  • Workforce optimization: Multi-dimensional optimization of cost, overtime and employee satisfaction are some workforce optimization techniques that are aimed at creating comprehensive and accurate schedules.

Developing resourcing strategies

Resourcing strategies depend a lot on a planning strategy known as scenario planning. Scenario planning takes into account several alternate future scenarios, so as to help frame present-day decisions and policies. A well-made scenario also incorporates certain “twists and turns” into the simulation to account for changing environments in the future.

Performing a gap analysis

Gap analysis is a performance metric that compares actual performance with desired or planned performance. Gap analysis identifies gaps between the planned allocation of resources and their actual allocation. It offers a comprehensive study of resources like HR, business processes, business direction and information technology.

Engaging the resource plan

Engaging the resource plan with your business should take into account the three core resource areas – labor, equipment and materials

  • Labor: Labor refers to all echelons of your workforce, including contractual employees. Planning labor includes identifying and assigning tasks and roles to all employees in order to accomplish all planned activities.
  • Equipment: Equipment planning takes into account the various kinds of equipment that will be necessary to complete the planned activities. It includes office equipment, telecommunications equipment and heavy and light machinery (as applicable).
  • Materials: Materials planning takes note of all consumables that are required to accomplish the planned activities. It includes perishables such as paper, ink cartridges and stationery, and non-perishables like concrete, bricks, steel, wood, etc. that are necessary for producing physical deliverables.

Submitting the workforce plan for approval

After the workforce plan is formulated, it needs to be approved before it can be implemented. Before submitting the workforce plan, the planned budget must be in sync with the annual budget cycle. After submission, appropriate feedback on the workforce plan will be collected from the authority concerned with perusal and approval.

III. Implementation Stage

Once the workforce plan is approved, it needs to be implemented. The various activities performed during the implementation stage are:

Implementing and measuring

The implementation and measurement stage takes care of all the changes to be effected in the domains of technology and infrastructure. It introduces new or revised efficient processes, modifies existing policies and formulates new ones. Staff training and career development measures are undertaken and steps are taken to facilitate employee recruitment and enhance employee retention. It is also in the implementation stage that succession planning is done and flexible staffing arrangements are introduced.

Integrating workforce strategy with other planning processes

It is necessary to integrate workforce strategy with other planning processes, the most important of them being succession planning. This integration with succession planning consists of:

  • A comprehensive study of the skills and competencies required for each key position, both in the current scenario and in the future.
  • Assessing whether the requisite competencies are gender and race-neutral.
  • Assessing whether incumbents are vulnerable to loss.
  • Formulating and recommending replacement strategies for each key position.
  • Identifying talent pools for particular areas of operation and assessing their skill and readiness.

Reviewing, evaluating and identifying workforce issues

Review and evaluation of workforce plans is generally done after 12 months of implementation. In this phase, it is assessed whether further refinement of policies and processes are necessary. Also, staff training and development plans and policies are reviewed and changes, if any, are recommended. Workforce plans are updated and any necessary changes are considered in this stage.


Workforce planning tools give you the necessary leverage to effectively plan and develop your workforce over time. Below, we discuss a few good workforce planning software options.


PARiM is a cloud-based workforce planning and management software. It has three self-service portals, one each for management, staff and clients.


  • PARiM minimizes time and paperwork.
  • PARiM allows you to store a large amount of data including detailed information about employees. This allows you to quickly browse through employee qualifications and skill sets to select the right person for any given job. It facilitates audit trails by maintaining a complete log of transactions along with IP addresses, time-stamps and users.
  • Since PARiM is cloud-based, it allows remote access to information. PARiM is HIPAA and ISO 27001 compliant. The information stored uses Amazon Web Services and is secure.
  • PARiM allows employee self-service.
  • PARiM facilitates absence and holiday management.
  • PARiM supports both iOS and Android platforms and allows employees to clock in and out from their laptops, tablets and mobile devices.

Price per month: Starts at $25.32 per month. Offers include a free trial and payment options of prepaid and pay as you go.


Replicon is an online workforce planning and scheduling software that uses an online calendar to manage employee work schedules.


  • Replicon allows you to compare actual work hours with scheduled hours to track discrepancies.
  • Replicon makes it possible to track which employees are assigned what tasks and when they are scheduled to work.
  • Replicon provides a dynamic work schedule by allowing you to adjust employees’ work schedules to account for time off and unscheduled leaves.
  • Replicon allows you to track regularly performed activities like meetings and training sessions.
  • Replicon provides employees a detailed, schedule-oriented view of their short-term and long-term goals.

Price per month: Starts at $22 per user per month and includes a 14-day free trial.


BambooHR is a personalized HR software for small and medium businesses. It provides a simple, paper-free user interface that consolidates all employee and human resources information into one single system, allowing you to efficiently track and manage multiple human resources activities.


  • BambooHR allows you to create a comprehensive employee profile directory that includes customizable fields. It has a completely customizable interface.
  • BambooHR allows you to track training and benefits.
  • BambooHR provides job and salary history on demand and allows employees the option to self-serve.
  • BambooHR allows online document storage with custom access permission.
  • BambooHR allows you to track, approve and report employee time off.
  • All reports on BambooHR are fully customizable and offer custom alerts.
  • BambooHR supports multiple languages and currency platforms.

Price per month: Starts at $6 per employee per month. Offers include a 7-day free trial without a credit card.

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