4 Workforce Planning Definitions | Careerminds

Workforce planning is a growing area of importance for human resources and organizations. While it can seem daunting at times, especially when just getting started, it is essential if you want your business and employees to thrive.

In this article, we will start by answering the question, “What is workforce planning?” Then we’ll break down the stages of the planning process, best practices with workforce planning examples, and the reasons why workforce planning is important for any business to achieve its organizational goals.

Ok so what is workforce planning in business? Let’s start by defining what that means in the context of companies like yours. Workforce planning is essentially the process of aligning the goals of an organization with the talent it needs, at the time it needs it. It helps you understand what your business needs and what changes to the workforce will ensure that all of those needs are covered. This helps ensure that you have the right people performing the right jobs to keep your business marching steadily toward success.

To do this, you need to have a firm understanding of what your talent pool looks like, what needs you currently have, and how your business may change in the future. Organizations need to be prepared for any massive shifts in employee skills, characteristics, or large exits like the retirement of baby boomer employees. So an HR team must continually assess what talent the organization will need at any given point in the future, and then prepare for that point in time with the development of current talent to progress into those roles and/or the outsourcing or recruitment of new talent skilled in those particular areas.

While this may all sound like a no-brainer—of course, you want to have the right talent to meet your goals—the process can seem daunting and time-consuming, especially the first time around. In fact, many organizations say that workforce planning is one of their top priorities and also one of their biggest burdens that they keep putting off. This means that if you were to start your workforce planning right now, you’d likely have a leg up on your competition already.

The workforce planning process is continuous and should be used to keep a balance of talent that fits your organizational goals. Let’s walk through what the four stages of workforce planning are and how you should implement each to conduct a successful workforce planning process for your organization.

If you need additional guidance on the workforce planning process for your organization, you can also click below to download our free comprehensive Careerminds workforce planning guide. 

The first stage involves examining all of the internal and external factors that are impacting your business. This environmental analysis (sometimes called environmental scanning) is pretty broad. You should examine how the economy is performing, how your products are selling, how your vendors operate, if any new regulations will impact your business, the state of your corporate reputation, etc.

That may sound like a lot, but the goal is to look at the bigger picture inside and outside of your organization. By taking a step back and examining the entirety of things impacting your business, you will be better equipped to look at how your talent and business goals align—which is precisely the point of strategic workforce planning.

Also, remember that these elements will change over time. So you’ll need to continue checking in with new environmental analyses on a regular basis. This can be said for every stage of the workforce planning process, which we will cover in greater detail in step four.

After you’ve looked at the totality of your business and have a good understanding of the internal and external factors that may impact it, the next step is to create a summary of your current workforce. You need to understand who is working for you, their individual skills, current projects, any development needs to work at their best, and any redundancies you might have.

This means creating profiles of your current staff by listing out what their role is, what skills they have, how they are performing, etc. You should also take a look at how the teams perform together and what their goals are. In a perfect world, these teams would all be working toward shared business goals. However, you may discover that some teams or projects are no longer needed, while their staff has remained in place.

This second stage should create a pretty accurate picture of what your current workforce looks like and how they are performing toward your current business goals. This is the real goal of workforce planning—to find out how the workforce is working to meet business needs.

The third stage in the workforce planning process is all about looking at the future and understanding your business needs in both the short-term and long-term. This starts with writing down a clear pipeline of your future business goals and what skills and talents you will need to reach them. Then you can compare this list with the workforce summary you created in stage two to see if your current staff are meeting all of the requirements to efficiently meet these new goals.

In other words, this third stage pulls it all together. You’re able to see what your business goals will be into the future and how your staff is suited to handle them. During this process, you may find that some of your current staff are redundant. It’s also not uncommon to find that you have large skill gaps that need to be filled by bringing on new talent or training your existing talent in a way that future-proofs your workforce.

For example, if your organization wants to move into a new product, you may need to find people with the knowledge to support that product. It’s often smart to first see if anyone in your current talent pool is interested in learning these new skills. You may find employees who would be ideal for future projects with a bit more training. After all, many workers want to be developed as much as possible and may be interested in acquiring new skills to take on a new project or role.

The goal here is to really nail down what talent you have and what you need, while also seeing if there are ways to develop your current staff for the future. It can be tricky, but at the end of the day, your staff members will appreciate the investment in their development, which will bolster their engagement and productivity.

The fourth stage is more of a reminder than an actual step. Just because you’ve completed your workforce planning process doesn’t mean you never have to do it again. In order for workforce planning to be effective, you need to be constantly checking in to see how things are working and performing new analyses often. Jobs and needs change over the course of time as new technology enters the fray, new projects pop up, market dynamics change, and business goals shift.

This means scheduling more times throughout the year to review your workforce planning, perform a fresh environmental analysis, update talent profiles, gauge your business needs, and develop a plan to fill any talent gaps. Are your talent development initiatives helping your workers become better at their roles? Do your new hires fit into your organization on a cultural level? Have you cut down on redundancy?

In a way, workforce planning is cyclical. You analyze, make changes, and analyze again. It requires ongoing effort, which is one reason why so many organizations fail to utilize workforce planning at all. Those that do, however, will have a solid leg up on the competition.

By using a few key best practices, you can take a lot of the stress out of the workforce planning process, making it easier to align your talent strategy with your business goals and needs. These workforce planning best practices aren’t hard to maintain either. In fact, by using them, you will be able to complete the process much sooner than you may think.

Here are a few helpful workforce planning examples of best practices to keep in mind:

One of the best workforce planning examples to adopt is the use of workforce planning tools and templates that your managers can use to help gather the information you need for your analysis. With a planning template laid out on paper and some helpful workforce planning tools to back you up, the process really becomes quite easy.

We’ve put together a comprehensive workforce planning template using these best practices to help you navigate your own workforce planning process from start to finish. Click below to download your free Guide to Workforce Planning PDF. 

The first best practice is to utilize your entire organization when starting your workforce planning process. Spread out the work so it doesn’t all fall on HR or any one person in upper management. You should ask for input from all levels of your organization—again, with the help of a workforce planning PDF or template that your managers can use to gather the information you’ll need to come up with your plan of action.

You should also work closely with your finance team to understand how much your organization can spend on fixing any issues you uncover. When all is said and done, this type of collaboration can help you easily and quickly collect a massive amount of workforce data, leaving more time to focus on crafting a plan for your company’s present and future.

In order to come up with that plan, you need to find a way to predict the future. One of the best workforce planning models for this is to look closely at the workforce data you’ve already collected. Examine the patterns that occur in your organization, paying close attention to times when your business achieved success and what your staffing looked like at those times.

It helps to break this down into segments (e.g., department, project, etc.) so that you can see how all of the pieces fit together. When done correctly, you’ll be able to understand how your staffing choices have impacted past success and gain possible insights into what you need to do in the present and future to meet your business goals.

We can’t say it enough. There is nothing more measurable than cold, hard stats. Start by accurately calculating your staff retention and churn rates for your organization. This will help you determine how many new staff you will need to hire this year regardless of projects. Once you’ve determined that number, you can start to add other new hires you may need based on your business goals to get a fuller picture of your entire talent acquisition strategy.

You also need to look at the success metrics of your talent development plans, tracking the trajectory of your current staff to ensure that they have the ability to learn and move up in the organization (which should help lower your churn rate in the process). This type of analysis will help you understand what gaps you have in your current workforce, which can be filled with internal candidates, external new hires, or outsourcing.

Regardless of the situation, it’s important to track these metrics as closely as possible to help you future-proof your organization and avoid common workforce planning pitfalls.

Another helpful workforce planning example is to obtain executive buy-in for any larger projects. Workforce planning can impact every department in your organization. So not having the buy-in of your leadership team will slow down the process of implementing any needed changes and end up wasting everyone’s time.

Your upper management teams will also be invaluable help for your future analysis because they are typically the ones setting the vision and goals. Ask them where they see the business going in five years. What new products will they want to sell? What gaps in talent do they see right now or foresee needing in the future? Asking these questions will help you to align your workforce planning framework with their high-level business goals.

As we’ve said, workforce planning needs to be continuous if you want it to succeed. This is where a lot of people fail because they do the whole process once, make initial changes, and then forget about it. Your workforce will change over time, regardless of what you do. People will leave, be promoted, or retire.

At the same time, your business will continue changing as well. Senior leadership may pivot the business to a new product. The market may have a hiccup. Industry trends may evolve with new technologies. New legislation may require updated compliance.

Every time something changes, you should try your best to keep an accurate record of it on file with a fresh workforce planning analysis. Empower your managers to keep track of their own teams and report the details back to you every few weeks or months. Once you set the groundwork, keeping things updated doesn’t have to be a big challenge. It all comes down to sharing the workload and staying aligned with your business goals.

Now that we’ve covered what workforce planning is and what it entails, let’s answer the question: “Why is workforce planning important?” There are a number of benefits of workforce planning that can impact your organization’s ability to reach its goals, especially as things change and new challenges arise.

Below are the most significant benefits of workforce planning for your business:

Talent needs identified in the workforce planning analysis, as well as inevitable staff changes like the large baby boomer exit, will provide valuable insights for succession planning. This will allow organizations to more thoroughly and proactively develop future leaders to fill the needed gaps and vacated roles. There are several methods organizations can utilize for this, including leadership development programs, external workshops or conferences, mentoring, and continuing education.

This investment in talent and leadership development will also improve employee engagement and retention. These have become increasingly important over the last several years, as job hopping and quiet quitting become more commonplace. Attracting new talent to fill voids created by attrition can be very costly on such a large scale. So performing this workforce planning process regularly and implementing any needed employee initiatives can have measurable benefits for the whole organization over the long term.

Recurrent workforce planning will also allow organizations to stay on top of new technological developments in the industry and among competitors, and then adjust the business goals and talent needs to address those. The world of work has changed more in the last eight years than in the 40 years prior to that, much of it due to major technological advancements throughout the world. So it’s more important than ever to assess your workforce planning from a broad organizational view to ensure that you have all of the skills covered for the latest technology. Doing so regularly will allow your organization to keep pace with these advancements and thus remain competitive in a rapidly changing world.

A similar benefit of workforce planning is the ability to anticipate and adapt to any other industry or legislative changes. These types of changes may occur at any time and are usually more difficult to forecast. This is why there’s so much benefit in continually repeating the workforce planning process with an updated environmental analysis of the ever-changing business landscape.

So what is workforce planning and why is it important for your business? Simply put, workforce planning is the recurrent process of aligning your business goals with your talent pool. This is a critical part of ensuring your business is equipped to continue moving forward and achieving success.

However, the workforce planning process doesn’t have to be difficult to enact. Take it step by step through all four stages—perform an environmental analysis, profile your current workforce, compare that to your talent needs to create a gap-closing strategy, and repeat as needed. Make sure to lean on managers to help you gather the initial data, and set aside time throughout the year to reassess and ensure your goals and talent are still optimally aligned.

When done correctly, the workforce planning process can be pretty easy for you and impactful for your bottom line by making sure that you have the right people doing the right jobs to meet your business goals in the present and future.

If you’re unsure how to implement this workforce planning framework, we’d love to show you how we can help. At Careerminds, our goal is to foster both individual and organizational growth, ensuring that everyone in your company can achieve their goals. If you’re interested in learning more, click below to connect with one of our experts and see if Careerminds is the right fit for your organization’s workforce planning needs.  

Rebecca Ahn

Rebecca is a writer, editor, and business consultant with over 10 years of experience launching, managing, and coaching small to midsize companies on their business, marketing, and HR operations. She is a passionate people advocate who believes in building strong people, teams, and companies with empowering culture, content, and communication that facilitates meaningful results at every level and touchpoint. In her spare time, Rebecca is an avid traveler and nomad who also enjoys writing about travel safety and savvy. Learn more on her LinkedIn page.