What is workforce planning? Definition, benefits, steps

It can be difficult to manage a workforce when the work climate, labor market, and productivity levels can easily change. But through workforce planning, your manpower will always be ready to deliver on what your company needs. To strengthen your workforce, make this article your one-stop shop for everything you need to know about workforce planning!

What is workforce planning?

Workforce planning, also known as labor forecasting, is the practice of examining your company’s workforce to figure out how they can efficiently achieve current quotas and future business goals. It's about strategizing your workforce so that they always have the right skills and resources to deliver on the company’s goals.

The goal of workforce planning centers on future-proofing your staff to handle talent gaps, manpower shortages, succession planning, and other events that affect them. This is done by creating and implementing a strategy to onboard, retain, promote, and upskill certain parts of your workforce. 

Examples of workforce planning

Workforce planning is accomplished through organizational changes that enhance the productivity of the company, lower the risk and impact of manpower shortages, maintain quality of work, and improve other internal processes.

Examples of workplace planning include:

• Recruiting employees
• Determining staffing needs
• Predicting workforce demands
• Improving talent management 
• Designing better workforce policies
• Choosing future managers
• Working toward a long-term company vision

Types of workforce planning

Workforce planning can fit into two kinds of approaches: operational and strategic.

Operational workforce planning

This type of planning focuses on improving your company’s daily operations. It produces practical plans that help your staff achieve their daily targets and priorities as efficiently as possible. 

Strategic workforce planning 

This is a long-term approach for company-wide changes, involving actions like changing the company’s organizational structure, succession planning,  and budget drafting. This type of planning needs the coordination of your company’s HR department to help predict future workforce demands and requirements. 

The ideal approach depends on your company’s current needs and resources. For example, if your company has long periods of understaffing, you may need an operational workforce plan to fill those absences. If your company wants to start engineering its workforce for a new type of assignment, you should start doing strategic workforce planning.

What are the benefits of workforce planning?

Establishing a workforce planning process has key benefits that provide stability and consistency to your company’s output and your staff’s day-to-day operations. Some of these benefits are:

• Protecting your core team ahead of time 

Preparing plans to recruit for a period of growth or a staff shortage makes sure you always have a consistent workforce to count on.

• Raising productivity levels

Solving skills gaps and improving shift management leads to smoother work processes. Your employees become more prepared and capable of handling any task that comes their way. 

• Securing the next managers

Workplace planning provides an opportunity to identify and train possible leaders in your workforce. 

• Promoting adaptability

Creating possible solutions for when a productivity drop, a change in shifts, or a new skill requirement comes will make your workforce flexible and reliable. 

• Improving the workforce budget

Reorganizing your workforce will also help you spot unnecessary costs like over-staffing, messy scheduling, and impractical training sessions.

How to develop a workforce plan

To incorporate workforce planning in your company, you must create a workforce plan. This is a roadmap for your employees that will help maintain their output, productivity levels, and skills for any outcome the company anticipates. This can be done in 6 simple steps:

1. Identify business goals

This is where you will decide between operational workforce planning or strategic workforce planning. Does your workforce need some stability, do you need to prepare them for bigger organizational changes, or is it a mix of the two? 

This will become the main purpose of your workforce plan so carefully consider which direction you’ll choose. To help create these goals, you can also ask yourself these questions:

• What are your company’s most urgent priorities?
• What are your company’s expected changes for the next three years?
• Is your workforce comfortably and consistently delivering on their daily targets?

2. Assess current resources

After finalizing your goals, the next step is to check your company’s current resources. This is to measure your workforce’s current strengths and weaknesses; how many changes you want to make; and how long it will take to implement any improvements.

This is usually done through employee interviews and supply analysis. Alternatively, you can easily review and manage data like shift schedules, employee profiles, and knowledge bases with workforce tools.

3. Predict future workforce needs

Once you compile enough data, you need to project what your workforce may need in the future. This step is also known as a demand analysis because you are predicting the future wants and needs of your workforce.

This can be gathered by figuring out how your current resources can accomplish the goals you chose for your company. You should also include any insights from labor market trends, competitor analysis, and industry forecasts in your projection.

4. Locate any gaps 

When you define your workforce’s current supply and future demands, a definite gap in manpower, certifications, or skills will be established. For example, if your company is scaling and demand is growing, your current team might not be able to handle the required output in the future. 

This may also come in the form of knowledge. If your industry is set to introduce new technologies or regulations in the next few years, your workforce will face a skill shortage if nothing is done.

5. Create a strategy 

Now that you’ve identified the gaps between your workforce and your company’s goals, it’s time to meet them with an achievable strategy. This is the list of actions you plan to do to address the present gaps and future requirements your workforce has.

For example, if your workforce has a skill gap and your company wants to be an expert in their industry, your strategy should lean toward training and development. In the future, you may also want to hire new workers with an up-to-date skill set.  

If you’re currently facing a skill gap in your workplace, you may also have to deal with a shortage of managers and trainers later on. Use SC Training to gain access to talent management programs and other lessons to narrow skills gaps and train potential managers. 

6. Implement the plan and revise

Once you’ve ironed out the details, start accomplishing the actions you’ve added to your strategy. However, the planning doesn’t stop there. You should add any revisions to your workforce plan should there be any unintended or unsatisfactory results. 

It can be difficult to visualize data for workforce planning so that you can make the proper revisions. But with change management tools you can easily chart your company’s progress with your current workforce plan.

Take charge of your workforce planning by upgrading your staff’s skill set. Sign up for SC Training for free.