define workforce planning in business terms

Workforce Planning: Definition & Best Practices

Updated: Feb 11, 2024, 3:58pm

Table of Contents

What is workforce planning, why workforce planning is important, benefits of workforce planning, 6 steps to effective workforce planning, 7 workforce planning best practices, frequently asked questions (faqs).

In today’s ever-changing workplace environment, it is more important than ever that businesses use workforce planning to ensure that their workforce aligns with their business strategy. Workforce planning is the process of analyzing workforce supply and demand, and then making adjustments as necessary to meet business needs and goals. This article explains the definition of workforce planning, the process of engaging in workforce planning, and best practices.

Workforce planning is the process of leveraging data to ensure that a business’s workforce supports business needs, goals and strategic plans. By utilizing workforce planning, businesses can set themselves up for success and empower their HR department to make more informed decisions about their talent needs. After assessing business needs and strategic plans, workforce planning looks at possible solutions, including staffing and technology solutions.

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Workforce planning is essential to keeping your business appropriately staffed. Without workforce planning, businesses can easily become overstaffed with excessive payroll expenses or understaffed and unable to meet customer or client needs. Workforce planning can help keep the business on track to meet customer and client needs, to achieve business goals and strategic plans, and avoid excessive overhead costs.

When trying to juggle all of the responsibilities of running a business, it might seem as though taking the time to sit down and plan your personnel strategy is a poor use of time. But taking the care to practice effective workforce planning can pay off greatly in the long run.

When done correctly, benefits of workforce planning include:

• Creating a road map for achieving business goals. Rather than just words on paper, the strategic plan comes to life through workforce planning. Because workforce planning aligns the workforce supply and demand with the business’s strategic plan, it provides a path to making the strategic plan a reality.
• Preparing for the future. Rather than focusing on immediate staffing needs, workforce planning takes a longer view to prepare for future needs by looking to labor market trends, technological alternatives, sustainable ways to streamline job responsibilities and other workforce options.
• Discovering staffing gaps or opportunities for increased efficiency. Workforce planning requires an evaluation process, through which staffing gaps and inefficiencies can be discovered and corrected.
• Providing data to support HR decisions. Rather than making impulsive decisions, workforce planning relies on data and stats to make informed decisions. Accordingly, HR leaders and company management can be confident in their decisions and have the data to support their decisions to various stakeholders.
• Facilitating succession planning. Because workforce planning looks beyond the horizon to future needs, the process can assist with succession planning. If there are gaps in succession planning, the business can take steps to train and develop future leaders so they aren’t scrambling when leaders retire.
• Improving retention rates. Because there is a clear road map, transparent standards and appropriate staffing levels, businesses often realize improved retention rates when they practice effective workforce planning. Employees are not overworked or underutilized. Instead, talent is developed and given opportunities for growth. And because the workforce planning program aligns with strategic planning, the workforce can feel united in a common goal.

Workforce planning essentially consists of six steps:

• Determine your business strategy. A business plan details your goals, budget and other needs to get your business up and running. A strategic plan can be developed at any point during a business’s life cycle and outlines the company’s strategy for the next three to five years.
• Assess workforce supply. Look at your talent pool, including current employees and potential candidates.
• Assess workforce demand. Determine the number of employees needed to meet current business needs and achieve strategic plans.
• Develop a workforce plan. Analyze your workforce supply and demand in the context of your strategic plans. If there are gaps between supply and demand, consider ways to close those gaps. If there is a misalignment between workforce supply and demand, consider ways to create alignment.
• Implement your workforce plan. The workforce plan might include hiring additional staff, using temporary employees, working with contractors or rolling out technological solutions to meet business needs. Conversely, it might also mean consolidating departments or teams.
• Monitor progress. After the workforce adjustments are implemented, continue to monitor the impact of these solutions to ensure that they have the desired outcomes.

The specific workforce planning process varies depending on the size of your business, industry and the labor market. In an unpredictable labor market or for a startup company, the workforce planning process may look out a year or two in the future. In contrast, a well-established company in a steady labor market might take a longer view. Below are some best practices to consider regardless of the specific duration of your workforce planning program:

1. Take the time to create a strategic plan

Effective workforce planning relies on having a concrete and actionable strategic plan. Not only does a well-formed strategic plan serve as a “north star” to guide you through the workforce planning process, but it can also help monitor progress and evaluate the impact of your proposed solutions.

2. Make workforce planning a collaborative process

Workforce planning works best when there is input from a wide range of stakeholders and there is buy-in across all facets of the business. Consult with different business teams and seek feedback from employees. When communicating the workforce plan, share information regarding the “why” and “how” so that employees throughout the organization understand the goal of any workforce changes.

3. Engage senior leadership in the process

Although workforce planning impacts HR, the process shouldn’t be delegated solely to the HR department. To be effective and sustainable, the workforce planning program should involve senior leadership, who should consider factors such as organization structure, succession planning, budgets, risk reduction and strategic plans.

4. Define your KPIs

To track progress and assess the impact of workforce planning solutions, it is crucial to have appropriate KPIs in place. Some common KPIs to include in your workforce planning program include employee head count, attrition rate, retention rate, promotion rate, tenure, quality of hire, voluntary vs. involuntary turnover rate, eNPS and diversity metrics.

5. Leverage data

Data is your workforce planning friend. By relying on data, you can make informed decisions and justify staffing decisions. Look at current staffing, employee retention rates, employee promotion rates, time-to-hire period and other vital measurements.

6. Pay attention to labor market insights

Understanding labor market trends, especially in your industry, will help you assess potential staffing needs. If multiple competitors are on a hiring spree, it could give you some key insights into where your industry is going and what your organization needs to do to prepare for it.

7. Consider alternative solutions

Workforce planning extends beyond hiring and terminating employees. Workforce planning should consider several options, including technological solutions, temporary employees and contractors. Workforce planning might also include adjustments to operations to remove bottlenecks, enhance efficiency, scale operations and employee transfers. The most effective workforce planning programs use a combination of talent strategies to meet their needs, including hiring talent, developing talent, redesigning workflow, redeploying talent and contracting with talent.

Bottom Line

Workforce planning isn’t a quick fix; it takes time, effort and careful deliberation. But workforce planning is well worth the time and effort it takes. When done well, workforce planning can boost retention rates, minimize inefficiencies and help the business achieve its goals.

How is workforce planning different from workforce management?

Workforce management is a set of techniques to manage your current workforce by allocating resources, improving efficiency and managing schedules. On the other hand, workforce planning takes a more big-picture view and predicts future workforce needs according to the company’s strategic plan.

Why is workforce planning important?

For many businesses, human capital is their most valuable asset. Workforce planning can ensure that your talent strategy aligns with your overall business strategy.

What are the key steps to effective workforce planning?

When it comes time to create a workforce plan, employ the following steps:

• Determine your business strategy
• Assess workforce supply
• Assess workforce demand
• Develop a workforce plan
• Implement your workforce plan
• Monitor progress

Are there technologies to assist with workforce planning?

Several technological solutions can assist with workforce planning and other strategic human resource management needs, including Vena, Planful and Workday Adaptive Planning.

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Christine is a non-practicing attorney, freelance writer, and author. She has written legal and marketing content and communications for a wide range of law firms for more than 15 years. She has also written extensively on parenting and current events for the website Scary Mommy. She earned her J.D. and B.A. from University of Wisconsin–Madison, and she lives in the Chicago area with her family.

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What is workforce planning, and why is it important?

Workforce planning is a strategic alignment of business goals with people strategy. It involves reducing labor costs, responding to changing customer needs, identifying strategies for people development, targeting inefficiencies, improving employee retention, productivity, and work-life balance, and delivering strategic value through talent.

Suzanne, the Evil HR Lady, shares expertise, guidance, and insights based on 10+ years of experience in corporate human resources....

Table of contents:

What is workforce planning?

What is involved in workforce planning, how to create a workforce plan.

Workforce planning is the people side of planning, but some businesses skip it, thinking that people will just appear when needed. Workforce planning aligns core business goals with people strategy . It makes no sense to plan on a new product launch next year without thinking about R&D, supply chain, and sales staff.

Workforce planning is the tool you use to ensure that alignment.

The Chartered Institute of Personnel and Development (CIPD) identifies the critical points of workforce planning as follows.

• Reduce labor costs in favor of workforce deployment and flexibility
• Identify and respond to changing customer needs
• Identify relevant strategies for focused people development
• Target inefficiencies
• Improve employee retention
• Improve productivity and quality outputs
• Improve employees’ work-life balance
• Make recommendations to deliver strategic value through talent

This article will break down these points and how they apply to your business.

1. Reduce labor costs in favor of workforce deployment and flexibility

Labor is often the highest cost for businesses outside of manufacturing. Some estimates put labor costs at 60% and even 70% of expenses . With these costs, planning to reduce costs while increasing flexibility is critical to continued success.

This isn’t advocating for low-balling employees or providing rotten benefits for employees. It’s about getting the right people in the correct positions. An engaged, competent, happy employee will cost less than an unhappy, unqualified employee. Remember, turnover is expensive as well .

2. Identify and respond to changing customer needs

The classic case study of a company that didn’t respond to customer needs is Kodak. As the king of film, Kodak had digital technology early but decided to focus on film, thinking digital was a fad. It wasn’t, and the company struggled for survival, dropping from a peak of 145,000 employees to 5,000 as of August 2020 .

Human resources departments need to be a bit of a fortune-teller to accurately predict workforce needs. Because SHRM doesn’t issue crystal balls, HR needs to work closely with each department to help predict needs and create plans for meeting these. Open communication between HR and each department is critical.

3. Identify relevant strategies for focused people development

The very premise of workforce planning is that business changes, and because business changes, people need to change. Figuring out talent gaps and plans to fill those gaps is a core function of workforce planning.

People development needs to happen before the need exists. Remember, you can go out and search for the “unicorn” candidate to fill a need immediately, but it’s often more manageable if you plan and develop an employee to take care of that specialty skill gap – if you do it right . This can mean training classes, graduate programs, or stretch assignments.

4. Target inefficiencies

If you’ve ever heard “we’ve always done it that way” as an explanation, then you know that the business has inefficiencies that can be rooted out. Good HR will ask; “What should we stop doing?” as well as “What should we do?”. You can find inefficiencies in all areas of the business.

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5. Improve employee retention

Turnover is expensive – not only does it take time and money to find, interview, and onboard a new employee, training them can take months. Good HR focuses on retaining employees who have potential. (You shouldn’t retain just to retain – if someone is a toxic employee , giving them more technical skills won’t eliminate their toxicity.) Creating career paths within the company can be an excellent workforce planning tool to aid employee retention .

6. Improve productivity and quality outputs

While managers need to figure out how to improve productivity and quality, HR can provide support. For instance, are there policies and procedures that can increase productivity and quality? What support do employees get for reaching their goals? When HR takes a look at the workforce, they can spot problems that decrease productivity. For instance, an employee who bullies their coworkers can destroy productivity in a department.

HR needs to plan to find, coach, or remove such employees, as well as helping managers find better ways to do things.

7. Improve employees’ work-life balance

Employees are at the center of workforce planning – without employees, all plans are worthless. You can increase your productivity by requiring everyone to work 80-hour weeks, but your turnover will shoot through the roof, and your quality will collapse.

Through making sure that employees have sufficient downtime and are supported at work, your workforce will be a lot more stable.

8. Make recommendations to deliver strategic value through talent

Sometimes managers can undervalue employees – they think if they can get someone cheaper, they should. But, good workforce planning demonstrates that you pay for top skills. While we use the word talent often in HR, you really should think about it in terms of skills. What skills do these employees have that can make a difference in your business?

Remember that treating employees right is a lot easier than trying to squeeze value out of people who are exhausted and burnt out .

This is more than just figuring out who you need to hire. There are many ways to approach this, but here are four critical elements that will make your workforce planning a success.

1. Understand the company’s mission and goals

Workforce planning doesn’t exist in a vacuum – it needs to support the company’s goals. Are you looking to expand across North America? Well, that’s quite different from a company that is content operating out of a single location.

The company’s mission matters as well. What’s the most important thing to the CEO, shareholders, employees, and customers? Make sure you have that answered before you move to step two.

2. Conduct a present gap analysis

This is a systematic method of understanding the gaps in the organization. What is missing? While workforce planning focuses on the people side of the business, keep in mind that a gap analysis looks at all business areas, not just skills and talent .

People aren’t at their best unless they have the equipment, training, and support they need. This is looking at the situation now. Remember all the points above – you need to look for improvement in all these areas.

3. Project for the future

This involves speaking with company leadership and involving every unit in the business. You’re looking for where the growth will be and where the workforce will shrink. You want to determine what skills the company will need in the coming years, not just now.

4. Conduct a future gap analysis

Knowing what you do about the current employment situation and the business’s goals and projected path, put together what the workforce will need and look at your gaps:

• What do you need to reach these goals?
• Do you need more employees?
• What type of training will your current staff need?
• Can you conduct this training in-house, or do you need people to receive formal training or even degrees?
• Do you have a formal employee training and development company policy in place?

Make sure you look at external trends as well. In 2019, no one would have guessed the massive shift toward remote work, but now, you’d be remiss not to consider where the workforce will be in the future. Will employees continue to work remotely or will they expect to? If so, is your company prepared to support people in other states? Or do you want to limit hiring to your local area, regardless of where they work?

Of course, there are many more things that you can do to plan for your workforce’s future, but these will get you a solid foundation. And, one last note: remember to be flexible. Plans change, and your workforce planning documents need to flex as the world changes as well.

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Workforce Planning

Learn what workforce planning is, its process, and its model. Discover five key steps in workforce planning and what it looks like in practice.

Ivan Andreev

Demand Generation & Capture Strategist, Valamis

January 17, 2022 · updated July 10, 2024

11 minute read

Taking the time to plan and make decisions as part of a broader strategy improves every aspect of your business, including your workforce. Despite the size or type of company, workforce planning is a valuable HR process that ensures you have the staff to execute your business strategy.

Learn what workforce planning is, how it helps with goals and produces positive outcomes, the benefits it can offer, five key steps in workforce planning, and what it looks like in practice.

What is workforce planning?

Primary workforce planning criteria, the goal of workforce planning, how workforce planning affects hr processes, the benefits of workforce planning.

• The five core workforce planning steps

Workforce planning is the process of analyzing existing employees and planning for future staffing requirements through talent gap assessment, developing employee management procedures, and setting recruitment strategies.

With effective workforce planning, your business is always staffed with the necessary talent, knowledge, and experience to produce positive business results.

Workforce planning requires developing an appropriate and cost-effective strategy for retaining, recruiting, and training your workforce while also continually assessing employee performance.

A survey by the American Productivity & Quality Center (APQC) shows 89% of 236 organizations integrated workforce planning into their business operations.

The plan for your workforce, what it will look like moving forward, and how to strategize for specific goals are unique to your business and depend on many factors. Typical components that affect workforce planning include:

• Talent availability
• Business growth
• Age of the existing workforce
• Current knowledge/skill gaps
• And much more

Strategic workforce planning

Strategic workforce planning is a proactive approach to managing staffing needs and aligns HR processes to business-wide goals. It guides future employee plans and decisions, ensuring they adhere to the company’s long-term vision.

Strategic workforce planning tends to take place at the senior leadership level and focuses on big picture goals such as:

• Structural organization
• Employee redeployment
• Succession planning
• Staffing budgets
• Maintaining capacity
• Reducing risk

Operational workforce planning

In contrast to strategic workforce planning, operational workforce planning focuses on the business’s immediate priorities. For example, which staff level can efficiently meet the current deadlines and objectives?

How to conduct a skills gap analysis and what to do next

Start building your foundation for strategic workforce development.

Criteria to consider when planning for your company’s future workforce include:

• Employee numbers : getting the correct workforce size so the business is not overstaffed and inefficient but not too small to hinder growth and fail to match demand.
• Skillset : having the right mix of skills, capabilities, knowledge, and experience to perform effectively and achieve your goals.
• Budget : finding the optimal staffing expenditure to achieve a high return on investment from employees and maximize profits.
• Flexibility : developing your workforce to be agile and adapt quickly when changes in the market occur.

The primary goal of workforce planning is to create a strategy for your staffing needs that ensures you can meet strategic objectives both now and in the future.

To achieve this goal, workforce planning requires an in-depth understanding of your existing workforce, employee skills, experience, load capability, and potential talent gaps.

Through performance tracking and employee assessment, you can take a birds-eye view of your entire workforce and create actionable plans for the future.

Workforce planning allows companies to understand and design their workforce effectively and efficiently with long-term objectives in mind. It prevents problems from developing and allows management to spot issues early, creating plans to remedy them. Examples could include:

• Identifying understaffed departments and potential bottlenecks
• Staffing requirement to scale operations
• Excess employees for redeployment or termination

Recruitment and employee development

Workforce planning provides the game plan for your company’s recruitment and employee development .

With a clear understanding of your existing workforce and your future goals, you can profile the skills, experience, and knowledge required to meet your needs and develop hiring and training processes to match.

Companies are constantly competing for the same high-end talent. With appropriate workforce planning in place, you can better identify future top employees for your business and develop talent acquisition strategies to attract them to your company.

Plus, workforce planning analysis can help companies formulate proper training and employee development to fill talent gaps while also finding individuals capable of excelling with the correct professional development in place.

This leads us to succession planning and ensuring you maintain successful leadership across your company.

By recognizing the leadership positions currently open or soon to be available, companies can begin assessing existing employees for promotion or targeting outside hires with the right mix of skill and experience.

Workforce planning together with succession planning creates a smooth transition for the critical roles in your company so you can provide an uninterrupted, seamless service or product for your customers.

Performance management

A significant outcome of workforce planning is managing the performance of your employees to increase productivity and efficiency.

With workforce planning, you can understand and develop strategies that get the most out of your employees to increase output and get a higher return on investment from your staffing expenditure.

1. Preparing for the future

With workforce planning, you have a roadmap for your staffing requirements to prepare for the future.

This could mean increasing the number of employees to match growth forecasts or pivoting to a different business model and finding the staff you need to accomplish this.

2. Discovering workforce gaps

Understanding the gaps of your current workforce informs your future personnel strategy in terms of recruitment, redeployment, and training.

Read: Skills gap and skills gap analysis

3. Effective succession planning

By identifying and developing employees with the potential for future leadership roles, you can effectively plan for staff leaving with minimal disruption.

Succession planning can also have a positive effect on employee engagement:

• 62% of employees would be “significantly more engaged” if they had a succession plan at their company.
• 94% of employers said having succession plans in place positively impacted employee engagement .

Succession planning template

It can help you navigate crises and leadership transitions with ease.

4. Improved retention strategies

Effective workforce planning gives you a clear understanding of employee skills and where they can be the most successful in the business.

So rather than terminating employees, you can retain valuable staff through well-planned redeployment.

5. Flexibility

A clear workforce plan with recruitment and training structures in place can make your business more agile, with the ability to efficiently anticipate and react to change.

You can reduce your overall staffing costs by developing plans to:

• Increase your productivity and workforce ROI
• Retain talent and reduce costs associated with employee turnover
• Develop a flexible workforce that can meet customer demand in different circumstances

Labor costs can account for up 70% of total business costs . Workforce planning allows you to map talent to value and ensure you are getting the best results for the costs .

The 5 core workforce planning steps

Successfully implementing new workforce planning strategies is an extensive procedure. However, businesses can break down workforce planning into five core steps to simplify the process.

1. Deciding strategic direction and goals

Workforce planning is a top-down process requiring clear organizational direction and defined strategic goals to inform and guide future decisions.

• What direction do you see your business going in?
• What are you hoping to achieve through workforce planning?
• What are the primary goals/milestones you are targeting?
• Why does your business need new workforce planning structures?

These are vital questions to ask yourself before analyzing your workforce and implementing new employee management strategies.

It is also important to remember that every process in your business affects another. Therefore, your workforce planning must be an organization-wide endeavor and include effective communication between HR and other departments.

Your new workforce plan must be produced with a collaborative approach that generates a consensus amongst all invested parties. Without organizational buy-in and a rationale for new strategies, you cannot reap the benefits of workforce planning.

Consider this step setting the “soft” workforce planning framework that will define the overall strategy to assess future information rather than the plan’s specific details.

2. Analyze existing workforce

The next step is to properly assess your existing workforce.

Common strategies used in this step include:

• Demand planning – Determining the number of employees needed for each role required to reach your goal. Demand planning requires accurate business forecasts to determine your workforce’s future number, structure, and composition.
• Internal supply – Internal supply planning needs accurate talent evaluations, an understanding of the expected employee turnover rate (retirements, resignations, etc.), and the design of training and professional development programs.
• Gap analysis – Identifying the gaps in your workforce and making plans to close them through recruitment, redeployment, and training.

These strategies help to answer the following questions:

• Do you have the right-sized workforce?
• What skills, knowledge, and experience do your current employees have?
• Do your employees need additional training?
• What new resources can improve workforce performance?
• Is your workforce correctly structured? (This includes organizational design, departments, communication channels, etc.)
• What is your current employee turnover rate?

What you have now is the starting point for future workforce plans. You can begin developing workforce planning strategies when you know what you have (step 2) and where you want to be (step 1).

A common pitfall of workforce planning is ensuring it is based on high-quality information from within the organization and external sources. Workforce planning defined by inaccurate forecasts and undeliverable future goals cannot be successful.

3. Develop your plan

This is where companies must take their overall goal, input the assessment of their existing workforce and produce a concrete plan for the future.

Businesses must plan their workforce to reflect the value and revenue it produces. A simple example of workforce planning in action could be:

A company is manufacturing two models of cars. Model A is the business’ flagship car, selling the most and bringing in the most revenue. However, model B is showing significant growth, and the income from model A is beginning to stagnate.

The car company can produce a simple revenue table based on 2023 figures and 2024’s forecasts.

The revenue per employee for model A is $250,000, and the revenue per employee for model B is $300,000.

Based on growth forecasts, you can estimate that staff working on model B will need to increase by 57 to match increased demand. This process assumes the forecasts are accurate and there are no sudden changes in sales or production. At the same time, model A will likely begin to have a surplus of staff in 2024 and need a reduction of 8 employees.

With workforce planning structures in place, you can develop plans to retrain and redeploy staff from Model A to Model B during 2023. This kind of planning minimizes disruption and reduces employee turnover.

Of course, this is just a plan based on forecasts and does not mean you should immediately move eight employees from model A to model B and hire 49 more. Instead, the business should put redeployment, hiring, and training plans in place to execute when key revenue indicators are met and take a gradual approach that matches the shift in focus of their business.

4. Implement workforce planning

Successfully implementing workforce planning requires:

• HR personnel to clearly understand their new roles and responsibilities.
• Strategies and processes for recording all relevant data and information.
• Effective communication channels between all invested parties to support the plan.
• Defined measurement and evaluation criteria to assess the plan’s success.

While the future HR plans for managing your workforce are specific to your business, they will involve some or all of the following:

• Recruitment
• Redeployment
• Outsourcing
• Deploying new technology

With many new processes to implement, workforce planning does not transform your company overnight. Instead, it is a gradual endeavor that optimizes each procedure for the given circumstances to get your business closer to your long-term goals.

5. Monitor results

It is crucial to remember workforce planning is an iterative process whereby progress is monitored and measured against specific milestones and long-term goals.

Post-implementation, your workforce planning processes may need adjusting due to unexpected factors within your business or to meet new realities of your industry.

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• Strategic Workforce Planning 101: Framework...

Strategic Workforce Planning 101: Framework & Process

What is strategic workforce planning?

• The goal of size revolves around the number of people and job roles. A workforce that is too large is overstaffed and works inefficiently. Conversely, a workforce that is too small means that the company isn’t producing what it potentially could produce. An excess of vacancies can be a good indicator of this.
• The goal of shape refers to having the right workforce configuration with competencies needed today and tomorrow. It also involves succession management .
• The goal of cost is to reach an optimum labor cost. Excessive labor costs can bankrupt the company, but costs that are too low may result in an inadequate workforce to complete the work.
• The goal of agility is about having a workforce that is lean and flexible and can adapt to changing market demands.

• Right people
• Right skills
• Right shape
• Right place
• Right cost.
• Right location
• Right risk, leading to
• Right capability.

Benefits of strategic workforce planning

• Addressing demographic changes: An aging workforce poses a number of different problems, including a lack of in-demand skills, reskilling challenges, and mass retirement. Strategic workforce planning can help to anticipate this future challenge so that organizations can prepare today and avoid a skills gap.
• Cost reduction: Strategic workforce planning helps you hire the right number of employees with the right skills at any given time, reducing costs that come with overstaffing and attrition. 
• Effective talent management: Hiring and retaining employees with the right skills, behaviors, and motivation and lining up a talent pipeline to replace the aging group of senior management and executives in an organization lead to a workforce filled with competent employees, providing you with a competitive advantage. 
• Preparing for the future: By anticipating and planning for changes, organizations can prepare themselves for an uncertain future filled with both expected and unexpected challenges. By identifying critical roles and skills and having a plan to keep these roles filled, organizations can better handle unexpected events like market disruptions or rapid technological advancements.
• Flexibility: Today’s competitive landscape and rapidly evolving technology require companies to be more agile in their approach to building a workforce. Strategic workforce planning gives organizations this flexibility by proactively building capabilities and allocating resources to priority areas.
• Risk mitigation: Because strategic workforce planning takes a more holistic approach and considers current and future needs, it helps you to mitigate risks associated with over and understaffing, budgets, an aging workforce, skills gaps and more. 
• Aligning workforce strategies and organizational goals: Thinking about where the business will go in the next three to five years helps you to align workforce strategies with broader organizational objectives. This foresight enables your organization to develop a workforce that is strategically prepared to support future business directions and goals.

Strategic workforce planning framework

• Strategic workforce planning is in line with the organization’s strategy. The organizational strategy is a long-term plan that dictates what the company strives to achieve in the next five to ten years. This is an excellent guideline for planning your workforce.
• Good workforce planning follows the 80/20 Pareto principle. 80% of the outcome is achieved by only 20% of the work. When you engage in strategic workforce planning, focus on the organization’s primary functions (also called critical roles). These are the ones that contribute most to organizational results. 
• Long-term focus. Workforce planning focuses on tactical and strategic decisions and therefore has a long-term focus.

Strategic workforce planning models

The hci model.

• Articulating the business strategy
• Segmenting roles
• Conducting an environmental scan
• Analyzing the current state 
• Constructing a detailed future
• Identifying gaps
• Creating an action plan
• Monitoring and reporting 

OPM’s Workforce Planning Model

• Step 1: Set strategic direction 
• Step 2: Analyze workforce, identify skill gaps, and conduct workforce analysis 
• Step 3: Develop action plan 
• Step 4: Implement action plan 
• Step 5: Monitor, evaluate, and revise

Strategic workforce planning case studies

Case study 1.

Case study 2

Strategic workforce planning process.

• An analysis of the current workforce
• A conceptualization of the future through scenario analysis
• An analysis of the workforce in the future.

1. Analyze the current formation of the workforce

1.1 quality of the workforce.

• High potentials need coaching and training
• High-potential managers need management development
• High performers with low potential shouldn’t get raises or promotions as they cannot develop much more. Doing so would make the organization top-heavy. In addition, if people stop performing, there’s no incentive for them to leave as they are very well-paid. 
• Low performers with low potential shouldn’t get raises or promotions. These are the people you should part with as they are likely to be happier in a different job.

1.2 Quantity of the workforce

2. Anticipate the future: Leverage scenario analysis to plot potential futures

3. analyze the future formation of the workforce, 3.1 future expected formation, 3.2 future desired formation, strategic workforce planning tools.

HR dashboarding

Compensation & benefit analysis, scenario planning, strategic workforce planning best practices.

• Establish your key stakeholders: Who are the people that you need to collaborate with, get on board, or influence to assist with and roll out your workforce plans? Stakeholders often include HR business partners , operational leaders, finance, IT, and (if applicable) unions.
• Maintain a skills inventory: A skills inventory helps HR professionals and leaders understand the mix of experiences, skills, competencies, and qualifications of all employees in their workforce. This is helpful for conducting a skills gaps analysis , which can then inform areas of recruitment, learning and development , and workforce planning so that your organization is prepared for the future. 
• Use data and analytics: A report by the CIPD and Omni found that less than half of employers use data to identify skills gaps in their workforce, and just 13% measure the ROI of their recruitment efforts. Leveraging data analytics to forecast your future workforce needs based on trends, business growth, and other factors enables you to make informed decisions, gain a competitive advantage, and plan ahead more effectively. 
• Determine your critical roles: What are the most critical roles in your organization that drive the most value in your business in the future? Conducting a thorough analysis of these roles as well as the skills, experience, knowledge, attributes, and qualifications that make people successful in them will help you determine if there are other people in your organization who can be trained up for these roles, as well as how easy or challenging it may be to hire externally for. 
• Consider external workforce trends: Keeping an eye on emerging external workforce trends, such as changes in labor markets, emerging skill sets, and demographic shifts, will help you anticipate future staffing needs. Reading online journals and blogs, subscribing to relevant newsletters, and networking with other people in the industry are all excellent ways to stay future-focused. 
• Develop a talent pipeline: A talent pipeline provides you with a pool of pre-qualified candidates who can be considered for future open roles as and when needed. To ensure that you always have a strong pipeline, you should be continually sourcing, engaging, and developing candidates who possess the right mix of skills, behaviors, and potential to succeed in your organization. For example, you can partner with relevant educational institutions, and create internal development programs to attract and nurture talent.
• Look into agile workforce planning : Agile workforce planning is an approach that is designed to be a continuous workforce planning activity rather than a one-off HR activity. In other words, workforce planning becomes a cycle of revisiting business strategy and goals, gap analysis, executing the workforce plan, and monitoring and iterating its outcomes. This approach is suitable for larger organizations with a mature HR department, leaders, and stakeholders, who have the resources to continually engage in workforce planning.

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What Is Workforce Planning?

A complete guide with definition, benefits and strategy tips.

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.

Use our template to seamlessly calculate your own employee retention rate.

Table of Contents

What is Workforce Planning?

Benefits of strategic workforce planning, stages of strategic 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.

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.

When it comes down to it, the goal of workforce planning is to help your workforce meet  the following criteria as closely as possible:

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

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 

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.

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Strategic workforce planning: Guide for people professionals

Understand what strategic workforce planning is and how to do it

This guide introduces you to workforce planning and provides you with an overview of how to do it. It examines the key stages involved in workforce planning and offers a practical structure for determining your strategy, with illustrative examples to guide practice.

We’ll show you how to develop a workforce plan by walking you through two methodologies for workforce planning: a six-stage planning framework and a seven ‘rights’ principle. The planning framework offers six stages for conducting workforce planning in the right order; the seven ‘rights’ principle lists seven areas of the business that you need to consider. 

People practitioners can use this guide to structure their (strategic) workforce planning, to identify the workforce challenges they may face ahead of time, and to put in place the appropriate actions to ensure organisational readiness and success.

What is workforce planning?

Six stages to workforce planning, appendix: workforce planning checklist.

In this guide, we talk about workforce planning and strategic workforce planning interchangeably. The difference between workforce planning and strategic workforce planning is that they are conducted within different time horizons. Workforce planning generally focuses on your current resource headcount plans and operational plans for the budget year ahead, whereas strategic workforce planning looks towards a three- to five-year time horizon. As you work on your interventions or analysis, and as you go through this guide, always consider which time horizon is most relevant for you in your specific context first. It will allow for better implementation of the concepts and tips gathered in the guide. 

Workforce planning is a continual process that is owned by the whole business and enabled by HR. It is not done in isolation; you need to understand the requirements and concerns of the different stakeholders involved in workforce planning, so identifying who they are and developing strong relationships with your key stakeholders is critical. It is not rigid and it needs to be agile, evidence-based and analytical. By analysing your current workforce and determining your future workforce needs, you are identifying the gap between the workforce you have available now and your future needs. Then you can implement the right solutions so your organisation can achieve its strategic plans. The great thing about workforce planning is that it integrates with other HR interventions such as: organisational development, talent management, recruitment and retention, succession planning, learning and development, and career development. 

Strategic workforce planning is a holistic approach to assessing and analysing internal business drivers and goals and provides a framework for organisations of all sizes to meet the challenges they are facing in complex and uncertain circumstances. It is, therefore, essential that organisations constantly review their long-term approach to talent and critical skills. By developing a more robust people plan, organisations can ensure they have the skills and labour to continue delivering on their business objectives, against both expected and unexpected changes.

You need to be familiar with your organisation’s strategy and what factors are contributing to the need for developing workforce plans. This can be achieved by conducting an external analysis of labour market trends and an internal analysis. A good way to conduct an internal analysis would be to ask leaders to share their stories on the consequences of not undertaking effective workforce planning, such as costly redundancy programmes followed by staff being rehired as expensive consultants. While we can’t predict what the future will be, workforce planning will help you prepare for different futures.

Workforce planning helps you to identify business problems and workforce implications and translate them into tailored solutions. It’s not about creating plans. It’s about identifying and, in some cases, creating the right workforce to deliver the desired organisational results. 

The benefits of a systematic approach to workforce planning enable organisations to:

• ensure talent is available when you need it
• prepare for the future by anticipating and planning for change
• become more agile and align processes and organisational priorities
• mitigate current and future workforce-related risks.

As discussed, workplace planning and strategic workforce planning happen on different levels in organisations and the focus of analytical thinking and planning activity will depend on the level you are operating at:

• Macro level – refers to the ‘bigger picture’, where you are thinking more holistically about longer-term strategic plans over the next three to five years for the whole organisation.
• Meso level – covers interim or operational plans for the year ahead for your workforce, aligned to next year’s financial budget.
• Micro level – your short-term resource plans, such as thinking about how to fill your current recruitment gaps and immediate needs.

The premise of workforce planning is to create a balanced approach where seven ‘rights’ of workforce planning are working together and are clearly understood by an organisation. Getting these elements in harmony is not a copy-and-paste process and needs specific tailoring for each organisation, depending on its make-up and operational context. You can reflect and discuss the elements of the seven ‘rights’ principle to help you take a more proactive approach when planning what your workforce should look like.

Figure 1: Seven ‘rights’ of workforce planning

• Right capability : This is about assessing the gaps in competencies and skills you have now and will need in the future. Ensure you have the right capability and core skills to bridge your current and future gaps.
• Right size : This is about having the right headcount or number of people you need. Make sure you have a sufficient quantity of people with the right capability in posts.
• Right shape : This is about having the right workforce composition in terms of structure, purpose, ratio of managers to professional and administrative staff and the right demographic mix. Make sure you have the right structures and levels in your workforce to avoid duplication or inefficiency.
• Right location : This is about having people in the right place geographically and structurally. It’s also about availability of people with the right capabilities at the right locations to meet current and future demand. You should consider whether there is an opportunity to build strategic hubs, relocating some operations abroad. Or whether you could outsource/insource operations or facilitate more hybrid working.
• Right time : This is about having the right people at the right time and for the actual duration that you need them. Have a think about the new talent and new skills you need and the timeframes for which you require them.
• Right cost : This is about sufficiently considering the right costs when making workforce decisions. If you focus on this right, have a think about when you have recently reviewed your financial investments in areas such as: benchmarking pay and reward, training and developing people, accounting for recruitment costs to hire, or outsourcing services.
• Right risk : This is about taking into consideration the risks in relation to your workforce, such as: retirements or predicting which staff will leave. Check how clear your organisation is on the risk involved if a vacancy is left open or the impact of not having enough people in achieving your goals. Ensuring you take into consideration these seven ‘rights’ is a great approach to workforce planning. Reflect on which ‘rights’ are the most challenging to get right and which ‘rights’ you should be focusing on.

To get these seven ‘rights’ right, we recommend a six-stage workforce planning methodology (see Figure 2). We take you through each stage of this framework in the sections below.

Six-stage workforce planning methodology

What is it?

The first element of your workforce plan is establishing your baseline. This stage is about recognising the external pressures on the labour market, the future of work, your current priorities, and internal talent breakdown of your organisation. It’s also about (re)looking into an organisation itself. Organisations must have a clear picture of their current workforce and an understanding of the organisation’s operating model, organisational strategy and workforce, otherwise it’s very challenging to plan for future changes.

Why is it important?

Understanding your baseline is important because it helps you take stock of external and internal factors that impact your organisation. External factors are the outside influences that your organisation can’t control, that challenge its capabilities. These include the political, economic, technological, legal and environmental. Internal factors are the factors that your organisation can control, such as its growth plans, ambitions, budgetary constraints and planned future changes. Planned future changes may include new products or services.

What can you do?

A pestle analysis.

A PESTLE analysis can help you identify your external pressures. It is one of the most effective frameworks for recognising the ‘big picture’ context in which an organisation operates. Horizon-scanning should be a priority to understand the drivers that could influence the direction of the organisation.

It looks at six key factors – political, economic, sociological, technological, legal and environmental. Monitoring and assessing each of these external factors and the impact they may have enables you to formulate business thinking and planning. See the CIPD factsheet on how to conduct a PESTLE analysis .

Figure 3: PESTLE analysis

A swot analysis.

Carrying out a simple SWOT analysis alongside a PESTLE analysis will help you identify internal elements for a baseline stage – areas of strengths and where there might be opportunities or threats to your organisation.

External factors like those considered in a PESTLE analysis will interplay with internal factors in the matrix of issues that can impact organisational strategy. Conducting these analyses will support identification of the critical roles, among others, in your organisation. Knowing critical roles will help you prioritise your further actions. You will find more information on critical roles later in this guide.

Data and information gathering

• Where does data sit? There are multiple data sources you can use to gain insight for workforce plans, such as: organisational data, reports from published research, or talking to stakeholders. You need to know exactly where to obtain relevant data. Is it within a single system or multiple systems? Can I access it, or do I need to access it through others? Is the data within single reports, or does it require data meshing?
• What is the quality/reliability? You need to understand the risks when making assumptions based on the credibility of the data you have. Are there known issues with the quality and reliability of the data? What assumptions am I making?
• How often does it change? Consider what timeframes you are working towards – are they immediate, mid or long term? How current do you need the data to be? How often does the data change? When was it last updated?
• What are the gaps? Identify where the gaps are and agree with key stakeholders what parameters are acceptable to work with or not. Are there known gaps in some data sets? Are there complete gaps in data?

Where to look for data sources

There are numerous areas in an organisation you can collect data on your employees from, including:

• asking employees to update their HR records
• following up on record updates and tracking compliance
• running voluntary and mandatory surveys using software other than their HR systems (for example Survey Monkey)
• auditing their HR records and checking passport copies, relying on right-to-work checks completed when a person began employment.

How to gain deeper insight into your workforce

Once you better understand your organisation and your workforce, you can then segment your workforce data so that you can focus on roles that matter the most and that will make the greatest impact to organisational performance. You may segment your workforce data into: demographics, structures, hierarchy levels, job families, job roles, competencies, contract types, and so on, to gain a better overview of your current workforce. By generating insight into the makeup of your workforce, you can then identify any gaps or issues.

Once you have segmented your workforce, you could then further segment your workforce into key groups based on skills and value. How unique are the skills you’ve segmented to your workforce or marketplace? Do the skills add value to your organisation and contribute to its success or competitiveness? From there you can then identify and agree the critical roles based on their impact (as outlined earlier in this section). Remember – your critical roles are the roles that carry the greatest impact to your business, so make sure to do a critical role analysis to find out what they are.

A critical roles analysis

To take a longer-term strategic approach to talent, you need to identify the critical, strategic roles that will disproportionately drive value for your business in the future. This includes a thorough analysis of such roles and what makes people successful in them – including required qualifications, knowledge, skills, attributes, and experience.

You can identify critical roles by analysing their impact and ability to deliver your strategic goals by asking three key questions:

When asking these questions, consider:

Which roles have a strong impact on your business? Look at roles that would immediately and severely affect your business if the role were made vacant today.

Which roles have a unique skillset or knowledge base? Analyse the roles that help deliver business strategy. What is it about a particular skillset or knowledge base that makes them critical or unique to your organisation? Consider current and future roles.

Which roles have poor internal bench strength? Gauge how long it would take for an internal succession candidate to become ready to fill the role.

Which roles have low external candidate availability? Evaluate how difficult it would be to fill this critical role with an external candidate.

Which roles need to be filled urgently? Based on past conversations and eligibility to retire, indicate how soon you anticipate needing to fill a role. A simple critical roles analysis can be started within your organisation. Looking at different roles and why they are critical, consider any additional demographic challenges and external scarcity of resource:

What is the role? Is this role unique to your organisation? How involved is it in strategy development? How senior is this role?

Why is this role critical? Is there only one person who can perform this role? Do they have specialised knowledge that is hard to replace? 

What is the current workforce demographic? Do you have others with the right skillset internally? How many other people could do this role in your organisation or be upskilled? 

What is the current external view? Is the role rare in the marketplace and difficult to hire for?

The term workforce supply means the labour availability, numbers, roles, skills required and the timeframe to meet the business needs. 

Workforce planning is also about managing the supply of talent you have (or attracting it, then managing it). You need to be aware of the current issues around the changing nature of work and organisations in order to manage your workforce supply effectively. You need to determine your workforce needs and evaluate whether you have an internal supply of talent to meet your demands.  Forecasting is also important at this stage, as is understanding the labour market. An accurate internal supply forecast is critical in identifying risks that need to be closed. Knowing which individuals are at highest risk of leaving provides an organisation with sufficient time to address future workforce gaps with minimal disruption to the business. Forecasting your supply enables you to target replacements and knowledge transfer for critical roles and prioritise the gaps based on numbers required or those which are more difficult to fill externally. 

Assess your workforce supply

You can determine your workforce needs on both a quantitative basis – by evaluating the supply by job role after turnover, retirement and internal job movement – and a qualitative basis – by reviewing capability and performance of people currently in jobs.

These are the areas you need to address to ensure an effective workforce supply:

• How good are your policies and processes at attracting and resourcing the supply of talent you need?
• How strong is your employer brand in attracting and retaining both internal and external talent?
• How effective are you at developing the existing talent you have and creating a future pipeline of successors?
• How effective are your reward and recognition policies at retaining the talent you need?
• Are you forecasting that supply of talent is likely to be an issue for your organisation?

Review the labour market

A labour market refers to the type of work that people who join your organisation are currently doing, and the geographical area they come from.

You can assess the labour market by asking the following questions of your organisation:

• Where do current staff live who are already doing this work?
• How far are they travelling?
• Are there other areas people may be willing to travel from?
• When you have filled jobs recently, what were people doing before and where did they come from?
• When people have left you, where have they gone? That is, to which kinds of employers in which locations?

The term workforce demand means the labour required for an organisation to meet its business goals in the future. One of the hardest aspects of creating a strategic workforce plan is establishing a robust and useable supply and demand equilibrium. This is especially the case when there is uncertainty.

This stage of workforce planning is about recognising how demand is structured, what drives it and what your workforce needs may be in the future. Demand planning helps you create a more accurate plan and enables you to use data to make more informed staffing decisions and evaluate changes that could impact staffing levels.

Speak with your senior leaders

To analyse demand, you will need to speak with senior leaders and gain knowledge of the following:

• Your organisation’s strategic vision: what is the plan for the next five years? Will there be any transformational changes, such as outsourcing or new systems? 
• Your business’s growth ambition: what plans are there for growth or acquisitions, or are you restructuring and reducing operations in areas?
• Your customer requirements: what creates your competitive advantage? How are you responding to trends in the marketplace so you add value for your customers and meet their needs?
• Any applicable regulations: what existing or future legal frameworks might impact your organisation’s ability to operate?
• The potential scope for process improvement and transformation: what are the plans for automation and accelerating digital transformation? These may be able to offset skills shortages.
• Relevant technical innovation: how are you aligning your talent strategy to technological breakthroughs and how business models are changing?

Estimate your workforce requirements

There are a wide range of methods for estimating workforce requirements, and the approaches used will very much depend on the size and nature of your organisation:

• Asking : simply asking managers and department heads what they think will be needed and when is always a sensible starting point.
• Budget-based : use cost per employee to work out how many people you can afford to employ if the budget for an area of work has already been set. This is easy to use for annual planning in support functions, for example, but it does not necessarily challenge how resources are being allocated or link to levels of activity.
• Ratios : what is the proportion of employees to activity levels or of one group of employees to another? This works well in stable circumstances, where employee demand moves in line with activity levels.
• Benchmarking : this looks at ratios or costs in other organisations or between parts of the same organisation. It can stimulate questions, but does not necessarily represent good practice or take account of different work contexts.
• Extrapolating trends : for example, forecasting based on past increases in productivity, assuming these trends continue into the future. This is a good method to use for longer product/service cycles and where technology is not changing too rapidly.
• Forecasting : this is based on more sophisticated models, taking into account a range of factors including variations in demand across the year. This is helpful for broad-brush planning, but is only as good as the assumptions put into the model.
• Workflow analysis : this is based on a detailed analysis of the activities taken for each task. This activity is useful if your organisation is undergoing transformational change where the roles, responsibilities and capability requirements of individuals/job families are likely to change.
• Defining job families : employees working in positions belonging to the same job family require little training to perform one another’s jobs. Therefore, job functions within the same job family require similar competencies, such as knowledge, skills and capabilities.
• Zero-base demand estimation : this estimates the workforce you might ideally need rather than being based on what you have now, informed by a mix of the methods above. Organisations are often so blinkered by their historical job design, staffing patterns and numbers that they avoid the need to change these assumptions. Zero-base approaches can help to unlock new thinking about work design, productivity and flexibility.
• Scenario planning : this tackles uncertainty directly by looking further ahead at alternative views of the future. It is useful in assessing the risks of different organisation futures, but cannot predict what will happen.

These methods have different strengths and weaknesses and may suit different workforce groups or circumstances. They can also be used in combination. Most organisations need to understand workforce costs, but should not simply extrapolate costs without considering possible changes in work methods and productivity.

Gap analysis involves working out the difference between supply and demand – what workforce your organisation has available and what it will need in the future. It is important to be clear about the gap and the challenges facing your organisation. Simply put, a gap analysis is comparing what you currently have with what you ideally need. 

A gap analysis is important because it helps you identify gaps (or surplus) between your current situation and the future state.

As Figure 4 illustrates, the gap evolves over time and enables you to forecast the quantity of people you might need: if you do nothing, the gap between what you have and what you need will get bigger. Proper interpretation of the gap between supply and demand will help you prioritise and focus activity on your action plan. It is not a one-time activity. It needs to be reviewed regularly, for different time periods, depending on the organisation’s need and conducted analysis. 

Figure 4: Gap analysis

Deconstruct your gap analysis

When carrying out a gap analysis, ask the following questions:

• What are the current gaps between supply and demand and how are you managing these gaps? For example, are you using more contractors or drafting in resource from elsewhere?
• What are your future gaps between supply and demand and how are you managing these? For example, are you increasing hiring or training more people?

Address its key areas

Areas that you may need to address once you have carried out a gap analysis include:

• Availability lower than need : gaps where the likely availability of people is lower than your needs, so more staff need to be brought in, upskilled or developed. Maybe you are struggling to recruit enough people to fill vacancies or need to place current people into gaps via secondments.
• Negative gaps : where there is a surplus, or more people in certain groups or locations than needed. You may need to consider redundancy, relocation or redeployment if you have too many people and the work has ceased or changed.
• Skills gaps : where there are critical skill gaps or areas where you need to train or reskill, but you may also need to shift the kind of workforce you are employing over time.
• ‘Business as usual’ : what are the continuous action areas where recruitment, staff development and redeployment will be required to keep additional needs in line with emerging changes in business requirements?
• Resource challenges : workforce groups where recruitment, retention or both present challenges and alternative resourcing options may therefore need to be considered. These gaps may cover all jobs in a particular group, or they may apply especially to some locations or teams.
• Workforce reductions : workforce groups and/or parts of the business where workforce reductions may be necessary; these must be well managed.
• Change in people and skills needs : change in the business strategy could lead to radical change in people and skills needs. Strategy change may be the result of competitive pressures, a new approach to product manufacturing or marketing, caused by emerging technology (fintech) or the desire to reduce costs (as in offshoring).
• Relocation and outsourcing : in extreme cases, resourcing difficulties may challenge the overall business strategy or prompt major areas of work for relocation or outsourcing.

The action plan is where you establish the best way to close the skills and capability gaps identified between supply and demand. Dave Ulrich and other HR thought leaders developed the workforce planning framework using a number of levers that can help HR and business leaders explore alternatives to closing the gaps. This framework consists of five talent management levers – buy, build, borrow, bind and bounce – and two demand optimisation levers – bot and balance. Sometimes we refer to these as the ‘7Bs’. 

The five talent management levers

buy : acquiring the necessary external talent (recruitment, entry schemes, graduates, apprentices, pay and reward) build : developing internal talent (progression, succession planning, L&D, talent schemes, high potential, diversity, culture) borrow : contracting, outsourcing or bringing in (secondments, contingent labour, professional services, seasonal temps) bind : retaining key employees and capabilities (pay and reward, contractual, tenure, return of service) bounce : removing employees and using performance management (redundancy, redeployment, exits, secondments, partnership schemes).

The two demand optimisation levers

• balance : appropriate combination of the rest (operational transformation, budget, service levels, performance improvement, technology, organisational design)
• bot : use of automation to augment or replace existing capacity or capability (robotic automation, machine learning, cognitive automation).

Understanding these levers is important, as they can help you formulate a plan and weigh up the alternatives for closing talent gaps. It is a framework that helps HR and business leaders plan their talent needs for the future by critically thinking about what they need to do to ensure they have the right capabilities to deliver the organisation’s strategy.

To buy is an effective method of acquiring new talent, to bring in new capacity and capability on a ‘permanent’ basis – in other words, to recruit. If the other workforce levers discussed below are unable or unsuitable to meet your organisational needs, hiring new recruits, though an expensive option, may still be considered. Consider which roles do you tend to buy in.

In an environment where costs and return on investment will need to be carefully weighed, hiring costs, onboarding and time to productivity for a new recruit will all be important factors in your decision to buy. And that decision should be made with reference to the seven ‘rights’ for your organisation.

Build and develop the talent you have rather than looking to external hires. Building is about developing needed capability internally. This includes all internal and external training courses and development programmes, supporting professional qualifications and studies. Review what talent-building activities you have in place.

Building rather than buying will have a number of benefits. Internal candidates will already have working knowledge of your organisation and its processes, and potentially many of the skills and relationships required to be functional in the role. Developing according to your needs can provide your organisation with a more tailored workforce. Visibly investing in people development and providing a pathway for progression will have the added benefit of improving your Employee Value Proposition (EVP). That said, building is likely to involve talent planning and investment over a longer term, and could be resource-intensive – for example, in creating development programmes, provisions for coaching and mentoring, and so on.

Borrow involves borrowing or utilising talent on a temporary basis, such as using contingent labour, consultants or secondments, or outsourcing skills. Consider where the opportunities are to borrow talent.

A way of reducing reliance on the external labour market would be to deploy staff from areas of workforce surplus (or where hiring is easier) to cover current or potential gaps. It will be necessary to test staff’s willingness to change work area and the extent to which retraining might be necessary, as well as its costs.

One option, particularly during times of uncertainty, is to increase the proportion of contingent or casual workers. These could be agency staff, or temporary or fixed-term employees, although these often come at a higher cost. The advantage this offers is ‘numerical flexibility’ – employers can flex workforce numbers more quickly in line with changing demand. The judgement that needs to be made is whether you can secure sufficient resources through these means, and whether this option will be better than permanent hires as set against your assessment of workforce demand.

Bind is to prevent workers from leaving (either a particular role, business area or organisation) and is a way to fix capacity and capability within the organisation. Typical approaches are to increase pay and reward, other retention schemes to improve conditions and incentivise longer service (for example additional annual leave), or include restrictive clauses in contracts. Consider how effective your retention strategy is at helping you retain key talent.

This is the opposite of bind – it is to move someone around or out of the organisation quickly enough. This is where you move capacity and capability either internally or externally. Consider how effective you are at moving people around.

This can include:

• redeployment (and use with build, reskilling of workers)
• exits (redundancy, and removing low or underperforming individuals through your performance management process)
• secondments
• partnership schemes with other organisations (often in the same group) to move resource around.

Balance ensures demand factors are reduced and balanced to align with the business strategy and your ability to implement change effectively. Consider how you can achieve the right balance or combination of the different approaches.

The importance of balancing and considering your costs is key to providing evidence as a base for any of your workforce initiatives. You need to highlight what the benefits are to the business and where you will be adding value.

Consider the following areas when it comes to balance:

• How well are you able to balance the demands in the way your organisation is designed?
• How balanced are the levels of hierarchy in your organisation? Are there too many layers and are demands on the spans of control untenable?
• How are you going to balance the demands of your strategy if it is not aligned?

Bot is the use of automation to augment or replace existing capacity or capability in the organisation.

An obvious way to reduce exposure to labour availability problems is to reduce dependence on people through some form of automation. Clearly, this will be a more appropriate option for some jobs, or parts of jobs, than others in the short term, but it is possible that many routine and repetitive jobs can be replaced by technological interventions over the medium term. By contrast, roles that involve ‘genuine creativity’, ‘building complex relationships with people’ and that are ‘highly unpredictable’ would not be suitable candidates.

If your labour source is interrupted or becomes more expensive, automation could provide a cost saving as well. However, decisions should reflect consideration of employment relationships, ethical responsibilities and appropriate workforce consultations.

Consider which levers you will pull to start developing action plans

What should you stop doing, start doing or continue doing under each of the workforce planning levers? The ideal state is to achieve a combination and balance of these levers to meet workforce demands. Remember the critical roles you identified earlier and recognise how you are using or could use the levers for better critical roles management. It is essential that the business owns the action plan and that HR enables and facilitates the plan.

Determine what you need to execute the plan

The initial plan needs to do three things:

• Detail the outcomes from the plan and the timelines.
• options (for example if sharing with key stakeholders, it can be beneficial to provide three options for them to choose, based on cost/timeframe)
• scenarios (for example, if our objectives are that, this is the plan; if our objectives are different, this is the alternative plan).
• Describe the journey to stakeholders. You need to be able to articulate the story in a compelling way.

Ensure success by establishing your key stakeholders

You need to consider who the primary stakeholders are that you need to influence, get on board, and collaborate with to help you with your workforce plans.

Typical stakeholders include:

• operational leads
• HR business partners and centres of excellence
• commercial and procurement
• estates/facilities

Understand what key components are needed

A typical action plan will include some of the following components:

• a demand management plan – to manage and optimise demand on an enduring basis
• a recruitment plan – of all permanent and contingent requirements
• an L&D plan – with all the learning interventions
• a redeployment plan – including promotions
• a relocation/estates plan – and possibly an outsourcing plan – all aspects
• where demand will be serviced by an external provision
• a number of non-business-as-usual projects – including automation and other one-off interventions.

Execute the plan using an action plate template

Once you’ve established what you need in your plan, you can then bring it all together. Use an action plan template, like the one below, to do so (you can print the table or recreate and adapt the table to suit your needs). An action plan template helps you understand what your key workforce issues and gaps are by consolidating them into one place.

In doing so, it helps you answer questions such as:

• What are the workforce gaps and issues to be addressed?
• What talent interventions will you use to address these?

Once your plan’s established, you can then move on to delivering it.

You need to ensure your work on creating the right workforce is in collaboration with key partners/stakeholders at every stage of the workforce planning methodology.

Consider the following:

• Managing stakeholders : communication, governance, monitoring and reporting, and execution are key components to the management of a wide range of different stakeholders.
• Roles and responsibilities : draw up a detailed RACI (responsible, accountable, consulted and informed) of who’s responsible for which part of the workforce plan.
• Plan the stages and work packages : get expert stakeholders to do this for each strand, from conception and initiation, definition and planning, execution, monitor and control, to benefit realisation, and report back to you as the workforce plan owner.
• Manage assumptions and risks : you to do this throughout the process and continue to monitor assumptions to ensure they are not flawed or wrong, resulting in higher impact.
• Utilise people analytics : to make real-time change to deal with specific challenges while the plan is in action on where you think you might have a problem; use data to explore if this is a reality.
• Manage a living plan : the plan is something that lives and continues to change: revisit assumptions, create a new baseline, iterate the plan, and manage change control.

As with so many aspects of business management and HR activity, it is better to make a start than endlessly defer or become trapped in analysis paralysis. Begin simple workforce planning by talking to managers about where the organisation is going and their resourcing concerns. The focus of your discussion should also include critical roles. Help them investigate what is going on and what might work better. If things feel very uncertain, work with managers to develop some simple scenarios to find out where actions may need to be contingent on unfolding events. 

Remember, workforce planning is not a prescriptive process, nor is it intended to be an exact science. It’s about improving business performance and reducing organisational risk by narrowing the gap between a business having the people it really needs and who it actually has.

‘People are a business’s most important asset’ is a well-worn catchphrase, but one that is nonetheless true: ‘The right people, with the right skills, in the right roles, at the right time.’

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Workforce Planning

Workforce planning definition.

Workforce planning is a strategic process used by organizations to anticipate and manage their future workforce needs in order to achieve their business objectives effectively and efficiently. It involves assessing the current workforce, forecasting future workforce requirements, and developing strategies to bridge any gaps in skills, talent, and capacity.

Organizations use workforce planning to align their workforce with their business goals and objectives. It involves forecasting future workforce needs, identifying skill and talent gaps, and developing strategies to ensure that the organization has the right people with the right skills in the right positions at the right time.

Modern workforce planning tools help organizations optimize their human capital, reduce turnover, control labor costs, and ensure they have the right talent in place to achieve their strategic objectives. It’s an essential element of organizational strategy, particularly in industries and markets that are subject to rapid change and evolving skill requirements.

Workforce Planning FAQs

What is workforce planning software.

Workforce planning software, also known as HR workforce planning software or human capital management (HCM) software, is a specialized technology solution designed to streamline and enhance the workforce planning process within organizations. This software is used by HR professionals, talent management teams, and organizational leaders to effectively manage, analyze, and optimize an organization’s workforce, ensuring it aligns with the business strategy and future goals.

Key features and functions of workforce planning software include data management, analytics and reporting, demand forecasting, supply analysis, scenario modeling, succession planning, talent acquisition, skills gap analysis, budgeting and resource allocation, integration, compliance and legal reporting, collaboration and communication, and a user-friendly interface.

The specific features and capabilities of workforce planning software can vary among vendors, so organizations should select a solution that best fits their unique needs and objectives. Overall, this software plays a crucial role in helping organizations make informed decisions about their workforce, optimize talent management, and align their human capital with strategic long term goals.

What is the Workforce Planning Process?

While specific approaches may vary depending on the organization’s size and industry, here is a general overview of the key components of the workforce planning process:

Demand Forecasting

Workforce capacity planning enables organizations to assess their future labor needs based on factors such as business growth, changes in market conditions, technological advancements, and industry trends. This involves projecting the number of employees needed and the skills required to meet business goals.

Supply Analysis

Evaluating the current workforce’s composition, skills, and capabilities is crucial. This includes analyzing the existing workforce’s strengths and weaknesses, assessing turnover rates, and understanding retirement trends or other factors that may impact the workforce.

Gap Analysis

By comparing the demand (future workforce needs) and supply (existing workforce capabilities), organizations can identify gaps in skills, knowledge, and talent. Workforce supply and demand analysis helps pinpoint areas where the organization needs to hire, train, or develop employees to bridge those gaps.

Recruitment and Talent Acquisition

Based on the gap analysis, organizations may decide to recruit new talent externally to fill skill shortages. This can involve various hiring strategies, such as recruiting entry-level employees, experienced professionals, or specialized experts.

Training and Development

The process often includes strategies for developing the skills and knowledge of existing employees to meet future needs. This may involve training programs, leadership development, or cross-training to increase employee versatility.

Succession Planning

Identifying and nurturing potential future leaders within the organization is a critical aspect of workforce planning. Succession planning ensures that there are individuals ready to step into key roles when needed.

Flexible Staffing Models

Organizations may consider flexible staffing models, such as temporary employees, contractors, or freelancers, to adapt to changing work demands more efficiently.

Monitoring and Adjustment

Workforce planning is an ongoing process. Organizations continuously monitor their workforce and make adjustments as needed based on changing business conditions.

Technology Integration

Many organizations use technology, such as workforce management software, financial management software and data analytics, to facilitate the workforce planning process. These tools can help in data collection, analysis, and decision-making.

What are the Benefits of Workforce Planning?

Workforce planning offers several significant benefits to organizations, helping them align their human resources with their strategic goals and adapt to changing business environments. Some of the key advantages of effective workforce planning include:

• Strategic Alignment : Workforce business planning ensures that an organization’s workforce is closely aligned with its strategic objectives. This alignment allows the organization to focus its resources and efforts on achieving its long-term goals. Optimized Talent Acquisition : By forecasting future talent needs, organizations can proactively recruit and hire the right talent, reducing the risk of skill shortages and ensuring a more efficient hiring process.
• Cost Control : Workforce planning and analytics help organizations manage labor costs effectively. It allows for more accurate budgeting and resource allocation, reducing unnecessary labor expenditures.
• Enhanced Productivity : A well-planned workforce is more likely to have the right skills and capabilities needed to perform their jobs effectively, leading to improved productivity and operational efficiency.
• Improved Employee Engagement : When employees see that their organization invests in their development and career growth, they tend to be more engaged and satisfied with their work. This can lead to lower turnover rates and higher retention of top talent.
• Talent Development : A robust workforce planning tool will help identify skill gaps within the organization, prompting targeted training and development programs to upskill employees and prepare them for future roles.
• Succession Planning : Organizations can groom future leaders and ensure a smooth transition of leadership through succession planning, reducing disruptions during key personnel changes.
• Adaptability : Implementing a workforce planning framework makes organizations more adaptable to changes in the business environment. It allows them to quickly respond to market shifts, industry trends, and emerging technologies.
• Risk Mitigation : By identifying potential talent shortages or gaps in critical skills, organizations can proactively address these issues, reducing the risk of project delays or operational disruptions.
• Data-Driven Decision-Making : An effective workforce planning strategy relies on data analysis and forecasting, enabling organizations to make informed decisions about their workforce based on real-time and future needs.
• Competitive Advantage : Having the right talent in place when needed can provide a competitive edge. Organizations can seize opportunities, respond to market demands, and outperform competitors with more agile and skilled workforces.
• Legal Compliance : Workforce planning solutions can help organizations ensure compliance with labor laws and regulations, reducing the risk of legal issues related to staffing and employment practices.
• Improved Employee Morale : Employees are more likely to feel secure and motivated when they see that their organization has a thoughtful and strategic approach to workforce planning, as it demonstrates a commitment to their long-term well-being.
• Enhanced Customer Satisfaction : A well-trained and skilled workforce is better equipped to meet customer needs and deliver high-quality products or services, leading to increased customer satisfaction.
• Sustainability : Effective workforce planning promotes long-term organizational sustainability by ensuring that the workforce is adaptable and prepared to meet future challenges.

What is Strategic Workforce Planning?

Strategic Workforce Planning (SWP) is a specialized form of workforce planning that focuses on aligning an organization’s human capital with its long-term strategic objectives. The strategic workforce planning framework is a proactive and forward-thinking approach to managing an organization’s workforce to ensure that it has the right talent, skills, and capabilities in place to meet its strategic goals and address anticipated challenges.

A strategic workforce plan is especially valuable for organizations operating in rapidly changing industries or environments where talent shortages, technological advancements, and evolving market conditions play a significant role in long-term success. Strategic workforce planning tools ensure that an organization’s workforce remains agile and capable of supporting its strategic objectives over the long haul.

Workforce planning processes are a continual effort that involves not only retaining, recruiting, and providing training to your workforce, but also routinely evaluating their performance. There are various workforce planning models, each with a different focus. Here are some of the most common models:

Equilibrium Model

In this approach, historical data is scrutinized to identify critical metrics, such as turnover rates, employee retention rates. By conducting this analysis, you can position your company more effectively for the future, leveraging insights derived from the current workforce status. Fledgling enterprises lacking their own data should leverage alternative sources, such as industry benchmarks or competitor data – the earlier the better. There are no rigid rules to adhere to in this model, allowing you the flexibility to tailor it to your specific requirements. The primary objective here is to strategize for the company’s future based on both historical and current trends.

Deterministic Model

This model is centered on anticipating forthcoming developments, such as retirements or promotions. For example, if certain managers are nearing retirement or promotion, it is imperative to proactively plan for their replacements. Numerous foreseeable events can be predicted with reasonable accuracy, often several months in advance. Consequently, these events need to be factored into the analysis of your workforce needs, addressing immediate manpower requirements in the near term as well as the long term.

In this model, the focus is on assessing ongoing changes within the company and posing straightforward questions to determine the appropriate course of action. For instance, if your product development team is in the process of creating a new AI-driven offering, you will need to have sales personnel with AI expertise. The options include hiring new employees, upskilling existing staff, or engaging freelance consultants. To effectively implement this model, company leadership must collaborate closely with the HR team to ascertain hiring priorities based on evolving business goals.

Optimization Model

This model revolves around leveraging existing talent to attain business goals. This approach takes a backward-looking perspective, where business objectives are first defined, and then the path to achieving these goals is determined by working in reverse. Given the complexity of the variables involved, manual design of this model is impractical. Workforce planning software is necessary to facilitate the execution of multiple models and conduct what-if scenarios rapidly. This technological support enhances data analysis, enabling a deeper understanding of the steps required to achieve organizational objectives.

What are Some Workforce Planning Examples?

Workforce planning examples can vary widely depending on the organization’s industry, size, and specific needs. Here are some scenarios and examples of how workforce planning can be applied in different contexts:

Growth and Expansion Scenario : A technology startup has secured funding for rapid expansion into new markets. Action : The organization conducts demand forecasting to determine the number and types of employees needed in sales, marketing, and technical roles in various locations. This includes recruiting, onboarding, and training plans to support opportunities for growth.

Talent Retention Scenario : A large manufacturing company faces high turnover rates among its skilled technicians. Action : The company conducts exit interviews to identify reasons for turnover and develops strategies to improve retention, such as offering competitive compensation packages, career development programs, and a more supportive work environment.

Skills Gap Mitigation Scenario : A financial institution identifies a significant gap in cybersecurity skills among its IT staff. Action : The organization creates a skills development plan, including training programs and certifications, to upskill existing IT employees and address the cybersecurity skills gap. It may also hire cybersecurity experts to fill immediate needs.

Cost Reduction Scenario : An organization faces budget constraints and needs to reduce labor costs. Action : The organization conducts a workforce analysis to identify areas where it can reduce headcount or optimize staffing levels without compromising essential functions. This may involve restructuring, reassigning tasks, or automating certain processes.

Diversity and Inclusion Scenario : A technology company aims to improve diversity and inclusion within its workforce. Action : The organization sets diversity goals, creates recruitment strategies to attract underrepresented talent, implements diversity training programs, and monitors progress toward achieving a more diverse workforce.

Technological Advancements Scenario : A manufacturing company is adopting advanced automation and robotics technologies. Action : The organization assesses the impact of automation on its workforce, identifies which roles will be affected, and develops reskilling and redeployment plans for affected employees.

Does Planful Help With Workforce Planning?

Yes. Integrating workforce planning with FP&A ensures alignment between human resource decisions and financial goals. This involves budgeting for staffing needs, evaluating the financial impact of talent strategies, and understanding how workforce changes affect financial forecasts. By closely linking FP&A and workforce planning, organizations can make more informed decisions, optimize resource allocation, and achieve better financial outcomes.

From talent acquisition to managing the financial performance of the organization’s workforce, Planful helps you tackle every facet of workforce planning . Our platform helps simplify and automate time-consuming tasks and build alignment across departments, giving you more time to create a stronger people strategy.

With Planful, you can easily build models and what-if scenarios with our highly intuitive workforce planning templates , report on key results, and collaborate with leaders across the business to bring your plans to life; solve talent challenges by connecting financial and operational data to highlight gaps, project people costs, and build an optimized headcount planning process; and team up with Finance to conquer HR challenges and gain visibility and insight into budgets, people, and team strategies while building trust across the business.

Future-proof your business with the power of workforce planning. Get up and running with Planful in no time and without the need for IT support with an easy-to-manage platform. Check out our workforce planning demo today to see how Planful can help you build a more resilient, productive workforce.

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Workforce Planning: A Complete Practical Guide 2024

Without effective workforce planning it's extremely difficult for an organization to achieve its strategic objectives. Here I share what workforce planning is and how to approach it.

Workforce planning is the process of analyzing your current workforce in terms of skills and capabilities and then developing strategies to have the right people in the right roles at the right time to realize your future objectives.

Workforce planning helps us to proactively manage our workforce, anticipate talent gaps, and make informed decisions about recruitment and talent development.

Effective workforce planning leads to improved operational efficiency, increased productivity, higher employee engagement, and a competitive advantage in the marketplace.

As an HR and business leader, workforce planning is a fundamental part of my role. Here I’ll share my process and best practices to help you get it right.

What Is Workforce Planning?

Workforce planning (WP) is a strategic process that organizations leverage to ensure their workforce is aligned with their goals and objectives. It involves analyzing the current workforce, forecasting future talent needs, analyzing the market, and creating strategies to ensure the necessary talent is in place to achieve strategic goals.

Per Harvard Business Review :  

“Workforce planning is more than budgeting for, attracting, and hiring talent. It’s about supporting your entire workforce—building an intelligent feedback mechanism between your current and future business interests and the acquisition, retention, and development of the employees who will drive those interests.”

While you can think of this as a simple gap analysis type exercise, the successful execution of workforce planning is significantly more complex.

You need to have a comprehensive understanding of your business goals and objectives, your current talent capabilities, the future human capital needs of your organization, and the world you’re operating in.

The interplay between these elements becomes your strategic plan to meet future talent needs.

benefits of strategic workforce planning

Before we talk about how you can approach your workforce planning efforts, let’s first examine why it’s so important for you to keep workforce planning in your strategic arsenal of talent tools.

Improved alignment with business goals

The primary benefit, and ultimately the purpose of workforce planning, is to ensure that an organization's workforce is aligned with its strategic objectives. 

While the old adage of “Our employees are our greatest asset” may sound cliché, it’s still fundamentally true. 

However, even the most talented workforce won’t be an asset if it’s not strategically aligned with your business needs. A soccer team probably wouldn’t prioritize buying a defender if they'd failed to score a goal all season!

Improved decision-making

Workforce planning provides organizations with an enormous amount of rich data. This allows organizations to make data-driven decisions about talent acquisition, development, and deployment. 

This enables leaders to allocate resources efficiently and align the workforce to the organization’s true strategic priorities.

Enhanced productivity and performance

Workforce planning helps ensure that employees are equipped with the appropriate skills needed to perform their jobs effectively, resulting in higher productivity, improved quality of work, and better overall organizational performance.

Effective talent management

Workforce planning enables organizations to strategically manage their talent pool. 

Workforce planning, performance management , talent reviews , and succession planning should all work hand in hand to identify high-potential employees , develop succession plans, and develop the skills your employees need for the future. 

This enables employee development, improves retention rates, and boosts employee engagement.

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Cost optimization

An accurate assessment of future workforce requirements allows organizations to optimize their staffing levels and avoid over- or under-staffing. This leads to cost savings by reducing unnecessary recruitment, training, and termination expenses, and prevents productivity impacts due to labor shortages.

Enhanced agility and adaptability 

A deep understanding of future talent needs enables organizations to quickly adapt their workforce strategies, train or hire talent with required skills, and address emerging challenges or opportunities proactively rather than reactively. This is essential for reducing/mitigating organizational risk and building resilience.

Workforce Planning Example 

To provide a bit more color, let me give you an example of a time when workforce planning was essential to helping an organization I supported.

I once worked as an HR Business Partner in a large organization and had a call center within my remit. A change in leadership placed higher expectations on this call center. 

The new leadership team expected higher service levels while also reducing wait times and call abandonment rates. They also expected a higher level of resiliency, including mitigating impact from severe weather events and flexibility based upon variable call volume. 

Through our workforce planning process, we were able to come up with a strategy that fundamentally changed how the organization functioned.  

Higher expectations came with a need to augment staff. However, the well of talent in the New England geography we functioned out of had mostly dried up. 

So, rather than trying to only hire locally, we set up remote hiring hubs in the southeast and southwest of the US.

Not only did this enable us to tap into new markets for talent, it also made us more resilient by providing coverage when the famous nor’easters that descend on the New England area hit, or when other events impacted local business.

Further, the remote hiring hubs were in lower-cost-of-living areas with cheaper labor pools. This meant we could simultaneously increase our service levels without a significant increase in labor costs.

Without engaging in the workforce planning process, we likely would have continued our normal hiring strategy, spun our wheels, and struggled to meet the expectations of our leadership team.

5-step Workforce Planning Process

Step 1: Revisit organizational strategy and approach

Your organizational strategy is the Northstar of everything you do from a strategic human resources management perspective and strategic workforce planning is no exception to the rule.  

If anything, the rule applies tenfold. Without a deep understanding of the direction of your organization, it's impossible to effectively conduct a workforce planning exercise . 

My recommendation to you would be to revisit your multi-year strategic roadmap and ensure all participating leaders are aligned around the organizational imperatives you’re working towards.  

If your strategy is unclear, pause on workforce planning and conduct a strategic planning exercise first.

Step 2: Analyze your current workforce and forecast future needs  

I mentioned earlier that workforce planning enables data-driven decision-making. That means you will need sufficient insights into both your current workforce capabilities and future needs.  

The data you collect will need to be customized based on the strategic business needs and direction of your business, but, ultimately, you’re looking for insights into the composition and capabilities of your current workforce .

Focus on skill gaps, areas where you are either over or understaffed, critical roles to your business, and other key risks.

Based on your organization's strategic goals and anticipated changes in the business environment, you can forecast the future demand for various types of employees, skills/capabilities, and the volume or talent you will need.

Questions to ask yourself include:

• Where do you anticipate growth or contraction in your org?
• How does this impact headcount/your number of employees?
• Are there changes in market conditions that impact the work you do and the talent you need? 
• How do technological advancements (e.g. artificial intelligence) impact the work your colleagues do? Will they need new skills to interact with those advancements?  

Based upon all these considerations, your leadership team can develop models to estimate the future demand for different job roles and skills.

Step 3: Gap analysis

This step is as straightforward as it sounds: you conduct a skills gap analysis by comparing your future needs versus the current capabilities of your workforce. 

Essentially, you compare the forecasted demand with the projected supply to identify any gaps in skills, competencies, or workforce size.

This gives you key information associated with where you’ll need to spend the time, energy, and money to be successful in the future. 

This is also an opportunity to identify potential risks or constraints and pinpoint areas requiring attention during the decision-making process.

Step 4: Assess the supply of talent and develop strategies 

In planning for your future talent needs, you need to look at the availability of talent both internally and externally.  

Your current employee population will have a unique set of knowledge, skills, and abilities that you may need to augment by either upskilling your current workforce or supplementing with additional labor.

This could involve recruitment, training and development programs, succession planning , workforce restructuring, or outsourcing.

It’s important to understand external labor pools for the talent needs required for you to be successful. Some questions to ask yourself here:

• Do you require niche or specialized talent that’s difficult to recruit? 
• Are you able to hire sufficient talent with those skills in the geography your organization recruits from?
• Are there seasonal labor shifts that might impact your ability to hire talent? 
• Does the market put a premium on compensation for the work your organization does? 

These insights will help you plan effectively to meet your talent needs. You may need to plan for additional compensation or expand your hiring geography to source from additional sources (e.g. hiring work-from-home talent, candidates on work-based immigration visas, or contractors ).

Step 5: Develop your roadmap, execute and iterate 

Once your strategies are determined, it’s time to develop a strategic roadmap to close your skill gaps. This could be learning and development-based, org design-based, succession planning-based, recruitment-focused, or a combination of all of the above.  

Once you implement the strategies you’ve devised, continuously monitor and evaluate their effectiveness. This may involve tracking KPIs and other key metrics, adjusting strategies as needed, and ensuring that the workforce remains aligned with changing business requirements.

Additionally, it’s important to evaluate the effectiveness of your workforce planning process.  What went well? What would you change for next time?

It’s helpful to have a retrospective conversation with all parties involved to learn from your experience and ensure the next iteration will be even more successful.

These insights will help you plan effectively to meet your talent needs. You may need to plan for additional compensation or expand your hiring geography to source from additional sources (e.g. hiring work-from-home talent or potentially hiring candidates on work-based immigration visas). 

Tools and resources to support workforce planning 

There are numerous tools that can support you on your workforce planning journey. The tools you’ll need will vary drastically based on your organization’s size, complexity, and business plan.

Workforce planning software 

Depending on your needs, dedicated workforce planning software could be the best solution to support your needs.  

These types of applications can help you with your workforce planning needs by giving you visibility to your entire workforce, generating reports, data and analytics tools, and even modeling ‘what if’ type scenarios to test the impact of your workforce-related decisions.

HR analytics/business intelligence (BI) software 

Comprehensive HR analytics is essential to proper workforce planning. Through your HRIS and other inputs, you’ll likely have access to very rich employee/workforce-related data. 

But, without the ability to slice and dice that data per your specification, you’ll never be able to glean the necessary insights to make proper workforce planning decisions. 

Luckily there are many BI tools out there that you can leverage for data visualization and analysis, including Tableau and Power BI .

Talent marketplace

Talent marketplace software can also give you rich access to employee competency and skill data.   

While the true purpose of a talent marketplace is a colleague development solution that matches employees to opportunities based on their competencies, skills, and values, the competency/skill data collected through these tools can be immensely helpful in the workforce planning process.

It will give you visibility into the skills your workforce has today and where they want to grow/develop, allowing you to assess the future skills needs of your organization.  

This empowers your organization to make educated decisions about where to invest from a learning and development perspective, which skills to hire for, and can simultaneously help with employee engagement and retention. 

Key organizational information

In addition to any formal tools that you’ll leverage for workforce planning, there’s also other key organizational information you’ll want at your fingertips during the process. 

• Business strategy documentation. Workforce planning is tied back to enabling your organization’s strategy as it’s Northstar, so you must have a deep understanding of your business strategy and your strategy documentation handy for reference along the way.  
• Talent review and succession planning. The talent review and succession planning processes are kindred spirits to workforce planning and provide you key insights into what you have today, the capabilities you need tomorrow, and your approach to developing key talent to fill any gaps (especially critical roles identified through succession planning). This is a vital input into the talent side of your workforce planning process.  
• Compensation and finances. Your employee compensation and financial data are also a key part of the workforce planning conversation. After all, if your workforce is going to expand or contract this could majorly impact your organization's financials.

Workforce Planning Best Practices

Data comes first.

Data is an essential input into effective workforce planning and, without access to that data, your workforce planning efforts will be futile.

Harvard Business Review reports that “An inability to connect operational, people, and financial data to business outcomes impairs agility, according to 49% of leaders responding to a 2022 global survey by Workday. And only 12% of those leaders say their organization’s data is fully accessible to those who need it.” 

Have a solid HR analytics strategy in place before you begin to attempt workforce planning. You’ll thank me later!

Get the right people in the room

Workforce planning is a collaborative effort that involves multiple stakeholders within an organization.  

• Senior leadership . This is an activity that I believe should be business-owned and HR-facilitated, so it’s essential that your executive leadership team is involved in the process to provide strategic guidance and ensure the process complements your overall business strategy. 
• HR team. Your HR team should be accountable for designing and facilitating the process, providing HR analytics support, and expertise on talent management, learning and development, and the development of other workforce strategies.  
• Finance . Finance can assist in analyzing the cost implications of various forecasting scenarios, budgeting for your workforce strategies ( recruitment , learning and development, organizational design, etc.), and evaluating the ROI of your WP efforts.
• Front-line managers. I believe it’s important to bring front-line managers into the process. After all, they’re closest to the work and will have an intimate knowledge of their teams’ capabilities, strengths/development areas, workload, staffing needs, and other operational requirements.  

Need help? Phone a friend 

Workforce planning is a highly in-depth process and requires a significant amount of time, effort, and energy to be poured into for you to get the results you’d be hoping for. 

If you’re inexperienced with the workforce planning process, it might help you to hire a consulting firm to help you through the process.

An added benefit is that consulting organizations generally have access to a significant amount of global market trends, research, and analysis that can give you insights into the external labor market that you wouldn’t have access to otherwise.

If you're looking for some more basic advice or just to keep up with the latest trends in workforce planning and staffing, check out this list staffing conferences worth attending this year.

Change management 

Don’t under-index on a quality change management plan. Your strategies could mean a significant amount of change for your organization and team members. 

Remember: Data Is Key

It’s essential that your leaders act as change leaders and take your colleagues on the right journey to address their wants and needs along the way.

Workforce planning is an essential process for both organizations and their leaders/HR teams to develop. While it can be a daunting task, it doesn’t have to be. 

This can and should be viewed as a normal part of your strategic planning process. After all, what kind of plan would it be if you didn’t have a people-based strategy in place to execute against it? 

The best advice I can give you is not to underestimate the importance of high-quality data and analytics.

It takes meaningful data to draw meaningful insights, so if you have to start somewhere, start with how you can pull together the right compilation of data that will inform how you achieve your business strategy.

Liam Reese’s HR metrics article is a great starting place for this.

Join The People Managing People Community

For further support with strategic talent management, join the People Managing People Community , a supportive community of HR and business leaders sharing knowledge and expertise to help you progress in your career and make greater impact in your organization.

Why Is Workforce Planning Important?

Workforce planning helps future-proof your organization by ensuring your talent management strategies are aligned with organizational goals and objectives.

For example, if a tech company is planning to build a new product and launch it into a new market, workforce planning is key to ensuring there will be the necessary talent to build and market it.

How is workforce planning different from workforce management?

Workforce planning and workforce management are closely related concepts but they focus on different aspects of managing an organization’s human resources.

As we’ve discussed above, workforce planning is a strategic process focused on aligning the workforce with the future needs of the organization.

Workforce management, on the other hand, is more about the day-to-day operations of managing a workforce focusing on efficiently and effectively deploying the organization’s current human resources to meet its immediate needs and goals.

What is the objective of workforce planning?

The objective of workforce planning is to ensure an organization has the right people with the right skills at the right time to achieve its strategic goals and respond effectively to any changes in the market or environment.

What are the main principles of workforce planning?

Workforce planning is guided by several fundamental principles designed to ensure its effectiveness and alignment with an organization’s strategic objectives:

• Alignment with organizational strategy
• Forward-looking and proactive
• Data-driven
• Integrated planning
• Flexibility and adaptability
• Stakeholder engagement
• Continuous improvement
• Talent development and retention
• Diversity and inclusion
• Ethical and legal compliance.

These principles serve as the foundation for developing and implementing a robust workforce planning strategy.

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What is workforce planning? Definition, benefits, steps

April 19, 2024

Anakin Garcia

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 .

Anakin Garcia is a content writer for SC Training (formerly EdApp), an e-learning platform that brings certified training courses straight to your phone. Outside of writing, he's playing tabletop games or reading comics.

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Workforce Planning

Workforce Planning is the process of analyzing, forecasting, and planning workforce supply and demand, assessing gaps, and determining target talent management interventions to ensure that an organization has the right people - with the right skills in the right places at the right time - to fulfill its mandate and strategic objectives.

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1. Strategic Direction

2. supply analysis, 3. demand analysis, 4. gap analysis, 5. solution implementation, 6. monitoring progress.

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Practicing the Discipline of Workforce Planning

Workforce planning is the process an organization uses to analyze its workforce and determine the steps it must take to prepare for future staffing needs.

Any business plan deals with resource requirements, and, just as financial requirements need to be addressed, the business plan needs to ensure that the appropriate workforce mix is available to accomplish plan goals and objectives. In workforce planning, an organization conducts a systematic assessment of workforce content and composition issues and determines what actions must be taken to respond to future needs. The actions to be taken may depend on external factors (e.g., skill availability) as well as internal factors (e.g., age of the workforce). These factors may determine whether future skill needs will be met by recruiting, by training or by outsourcing the work.

Whether handled separately or as part of the business plan, workforce planning involves working through four issues:

• The composition and content of the workforce that will be required to strategically position the organization to deal with its possible futures and business objectives.
• The gaps that exist between the future "model" organization(s) and the existing organization, including any special skills required by possible futures.
• The recruiting and training plans for permanent and contingent staff that must be put in place to deal with those gaps.
• The determination of the outside sources that will be able to meet the skill needs for functions or processes that are to be outsourced.

While many see workforce planning as purely a staffing tool for anticipating employment needs, it can also be a critical tool for staff training and development and succession planning. To be successful, organizations should conduct a regular and thorough workforce planning assessment so that staffing needs can be measured, training and development goals can be established, and contingent workforce options can be used to create an optimally staffed and trained workforce able to respond to the needs of the business.

Roles of HR and Senior Management in Workforce Planning

Often, a workforce plan is completed simultaneously with organizational strategic planning and is updated with the same frequency as the strategic plan. While the HR department is typically responsible for the bulk of workforce planning initiatives, other members of senior management may be involved in the workforce planning process, including the CEO, COO, CFO and other leaders responsible for organizational strategy. To ensure the effectiveness of a workforce plan, leaders should evaluate the ability of the plan to anticipate and respond to future needs so that the organization can make and execute sound business decisions. Performance indicators will include standard organizational performance measures: profitability, ROI, productivity and so on. An effective performance management system can have a positive impact on the performance indicators of the organization. Benchmarks may also be established by relying on industry data.

Tips for Effective Workforce Planning

For the workforce planning process to be successful, human resource professionals responsible for leading workforce planning initiatives should make sure to:

• Designate a specific member of the HR team to manage the process.
• Find a high-level executive to champion the plan.
• Involve key stakeholders in the workforce planning process.
• Align the plan with the company's strategic business plan.
• Coordinate the workforce plan with succession planning and career development initiatives.
• Make workforce planning an ongoing activity, with continuous evaluation of changes in the internal and external environment that may affect the organization's staffing needs.

Steps in the Workforce Planning Process

Several distinct analytical steps need to be taken in workforce planning:

• The supply analysis , also referred to as the "supply model" or "staffing assessment," involves an analysis of an organization's current labor supply.
• The demand analysis, also referred to as the "demand model," includes a review of future business plans and objectives.
• The gap analysis compares the differences in the supply and demand models and identifies skill surpluses and deficiencies.
• The solution analysis focuses on how to address gaps in current staffing and future staffing needs through recruiting, training and development, contingent staffing, and outsourcing.

Step 1: Supply analysis

The purpose of the supply model is to analyze the organization as it currently exists—in other words, the supply of labor and skill sets that are vital to an organization. This analysis should encompass not only the number of employees and their skills, but also factors such as workforce demographics and representation of protected classes. Demographics may be especially important in workforce planning if the organization has large numbers of workers nearing retirement age, or if it has large numbers of young workforce entrants with turnover rates exceeding those of older, seasoned employees. Representation of protected classes will have significance for federal or state government contractors, which must comply with applicable affirmative action plan requirements, as well as for organizations that have a voluntary affirmative action plans and that wish to improve representation of underused protected classes. See   How does the use of trend analysis fit into the overall workplace planning process?

A supply analysis also involves making projections of attrition (due to resignations, retirements, internal transfers, promotions and involuntary terminations) over the planning horizon being used, so that attrition is taken into account in considering the future supply of labor and skill. From this information, the workforce planner can develop a profile of current staff as it would exist in the future if no action is taken in recruiting, training or outsourcing.

Step 2: Demand analysis

The purpose of the demand model is to forecast the organization's future workforce composition. This forecast should take into consideration a broad range of business issues, including new product lines, competitive forces and expansion/constriction in global marketplaces, anticipated workforce availability within geographic boundaries, and myriad other issues.

Internal and external factors need to be considered in the demand analysis. Analyses of internal demand influences may focus on the following questions, among others:

• Will the current workforce, with minimal retraining, have the skill sets necessary to perform new duties with a new product line?
• Will current employees remain loyal to the organization if it has anticipated changes in mind?

Analyses of external demand influences may consider these questions:

• Is labor readily available that possesses the skills and abilities needed by the evolving organization?
• What external pressures will change demand for goods and services that may ultimately affect internal business decisions and, thus, workforce planning needs?

The future composition of the workforce must also be analyzed. This analysis will seek answers to the following questions:

• How many employees will be necessary to achieve business plan goals and objectives?
• What skills and competencies will be required for the new business?
• What is the composition of the available workforce population?
• What will the organization need to do to attract prospective employees?
• What will the organization need to do to attract and retain a diverse group of workers?

Step 3: Gap analysis

The next step in the process seeks to compare the supply model with the demand model to identify gaps between the composition of the current workforce and future workforce needs. The workforce planning professional may want to categorize a variety of future scenarios and then select the future that is most likely to occur, with contingency planning for alternative futures. When conducting this analysis, the planner should identify the additional number of employees needed who have the requisite skill sets, as well as the employees who will no longer be needed due to limited skill sets.

Step 4: Solution analysis

Solution analysis involves the development of strategies to close the gaps identified in the previous step. Approaches for meeting future workplace demands may include recruiting, training and retraining, using contingent staff, or outsourcing. The approaches selected will be dependent on whether the organization will need to expand, contract, restructure or rely on contingent staff to meet new workplace demands.

Recruiting . When external staff is required to meet a workforce expansion due to demands of new product lines, expanded production or service offerings, or new geographic areas to be served, external recruitment may be the logical strategy to address gaps. Recruiting may also be required as turnover occurs, whether due to employees leaving to find other employment opportunities or to retirement, which may be the case for organizations with large numbers of employees nearing retirement age. Employers can choose among a wide variety of tactics for executing their recruiting strategy. These tactics vary depending on market conditions, the type of targeted candidates, diversity-related issues and other factors. Cost and time are major issues in recruitment. Even if the recruitment process is efficient, it typically costs more and takes longer to find, hire and train a new person than to "recycle" a current employee through internal recruitment. So, in many instances, external recruitment should be the workforce planning strategy of last resort. See  Recruiting Internally and Externally .

Training and retraining. Instead of filling the skills gaps through external recruiting, human resource professionals may choose the less costly solution of employee development, particularly for key high-value positions. Employee development builds on current intellectual capital, retains the corporate culture, and motivates and stimulates the workforce. As skill sets become obsolete due to new technology, new services, additional product lines or other competitive forces, the organization should focus on updating skills and capabilities of their employees as a critical workforce planning strategy. Training, retraining and development may include many methodologies, such as classroom training, on-the-job training, e-learning, webinars and job aids. These activities may concentrate on specific job duties and tasks or on leadership and managerial skills for new leaders.  

Contingent staffing. When the current number of employees or their skills sets are insufficient to accomplish the work, given the anticipated business future, contingent staffing may be used to fill that gap. This approach makes sense when the demand model indicates that the numbers of employees will vary significantly and cannot be leveled out through resource allocation strategies. Contingent staffing is often best used when the future is likely to be fluid or highly dynamic; in these circumstances, it may be a better alternative than hiring full-time employees who may not be needed on an ongoing basis. Contingent staffing options include temporary employees, part-time employees, contract workers and consultants. Discussion of each of these types follows.

Temporary workers

Temporary workers may be found internally or externally, depending on the needs of the organization. Although temporary staff is often hired to perform traditional clerical duties, the desire for additional flexibility, as well as early retirement, has resulted in higher-level experienced individuals seeking temporary assignments to meet their personal goals. Today's temporary workers can be hired to work in virtually every level of an organization, including CEOs, controllers, accountants, consultants, IT, marketing and HR.

To maximize the benefits of using temporary workers, human resource professionals should consider whether to use an agency or internal resources, determine selection criteria, ensure successful onboarding, set expectations and effectively manage performance. Organizations will also want to ensure that policies or procedures are established for issues such as screening and selecting temporary agencies, temporary-to-regular employee classification, discipline, work behaviors and legal compliance activities.

Part-time employees

Part-time employees are those who typically work less than a full-time schedule. Many of these employees work a partial day every workday; some work part-week, and some may work part-month. Some may even job-share with another part-time employee. Part-time work can be used to attract diverse workers, including students, parents of young children, older workers and others who need or want to work but do not wish to work a full-time schedule. Most organizations require part-time employees to follow all policies and procedures that their full-time employees must follow. Fewer or different benefits may be offered to part-time employees than to full-time employees.

Contract workers and consultants

Sometimes an organization may need workers who have specialized knowledge or expertise to help meet new business requirements. Independent contractors and consultants may be used to meet these special requirements. Employers should take care in properly identifying contract workers and consultants, as misclassification of these workers can result in violations of the Fair Labor Standards Act or Internal Revenue Service regulations. Classifying a worker as an independent contractor should always be an informed and bona fide business decision, not a subterfuge to avoid the employer's legal obligations to employees. Independent contractor arrangements have drawn increasing scrutiny and significance with the proliferation of workplace laws covering "employees" and the growth of the contingent workforce. Misclassification of an individual as an independent contractor can give rise to a variety of liabilities. See   Employing Independent Contractors and Other Gig Workers .

Outsourcing

Organizations may determine that certain noncore business functions would be better accomplished by outsourcing them to an organization that specializes in those functional areas. Jobs that are prime targets for outsourcing are those that require a skill that is critical, in short supply and needed only periodically. If such needs can be handled through contingent staff—for example, by using retirees—the organization will, of course, be ahead. However, many high-demand, low-supply, leading-edge skill needs may be met only through outsourcing to specialized contractors.

To ensure that outsourced functions are properly managed, HR should consider:

• Selecting the right firm.
• Establishing guidelines for a partnering relationship.
• Communication methodologies and protocols.
• Metrics for measuring and ensuring business results.

Companies and providers should work to structure an outsourcing contract that can adapt to the client's changing needs. See  Outsourcing the HR Function .

Succession Planning as a Workforce Planning Tool

Another aspect of effective workforce planning is succession planning. Succession planning is used by organizations to identify and prepare suitable employees to fill key positions when current employees leave their jobs. An effective workforce planning process will include a review of key leadership and business-critical roles and will identify key incumbents able to progress into these roles. Having a succession plan in place generally ensures a smooth continuation of business when key players leave due to retirement, resignations or transfers within the company.

The types of positions included in a succession plan vary by organization. Traditionally, these plans included only executive-level positions. In recent years, however, companies have been selecting successors for positions throughout the organization. During times of economic upheaval, when the economic security of organizations and their staffs may be uncertain, the need for up-to-date succession plans increases. With a wavering economic outlook, downsizing, mergers and acquisitions become more likely. With these events leading to potential increases in turnover, implementing a succession plan is a key strategy an organization can use to reduce turnover costs and ensure smooth transitions. In addition, a succession plan can help foster employee commitment because it demonstrates to employees that the organization supports their development and internal growth.

Organizations use a variety of models for succession planning, which may range from self-identification or nomination to highly sophisticated software tools that maintain information about individual employees' development plans, training and education completed, classes taken, performance evaluations, and recommendations for future development. See   Engaging in Succession Planning .

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What is workforce planning?

Workforce planning is the strategy used by employers to anticipate labor needs and deploy workers most effectively, usually with advanced human resources technology .

Workforce planning is a subset of workforce management , a critical element of most large organizations' software-based human resources and enterprise resource planning systems.

Workforce planning models

Organizations -- including corporations, nonprofit groups, universities and government agencies -- use workforce planning to design the best-performing employee-management groups they can to reach goals, such as profits, productivity or efficiency.

Workforce planning falls into two broad categories: operational and strategic.

Operational workforce planning is on a person-to-person level and streamlines daily, employee-related operations. This approach can help managers develop work schedules and employee hours to maintain business productivity and continuity.

A good operational workforce planning strategy includes elements of talent management and can help ensure talent is well-distributed among divisions and departments, as well as identify organizational needs and the number and types of employees required to do those jobs. It also can pinpoint staffing gaps, which job functions and processes are no longer necessary and whether workers should be reassigned to other roles.

Workforce planning also includes developing and putting into practice policies to help employees remain satisfied with their jobs.

Strategic workforce planning deals with broad-based issues that develop over months and years and can encompass all the aspects of an enterprise. Examples include the following:

• Forecasting knowledge drain as employees leave the organization.
• Anticipating future talent needs.
• Determining and evaluating likely future sourcing options.
• Establishing an effective workforce analytics strategy.

Benefits of workforce planning

Using workforce planning software, organizations can schedule employee hours and shifts using accurate labor and sales forecasting that matches demand to labor needs. Workforce planning technology can also help managers better prepare for retirements and design a talent acquisition strategy to replace retiring employees.

Executives involved with compliance with federal, international and local laws can use workforce planning software to ensure their staffing strategy dovetails with compliance plans, including having enough people to fill jobs with labor and safety requirements and to control health insurance costs.

Workforce planning vendors

Some HR technology vendors, notably UKG and Ceridian, have made workforce management and workforce planning software their main offerings. Infor and ADP also have workforce management modules, and Workforce is a pure-workforce management software vendor whose platform integrates with the SAP SuccessFactors human capital management ( HCM ) suite.

For small and medium-sized businesses that need workforce planning, Paycom, Paylocity and Paychex offer that capability, along with other workforce management and HCM functions, such as payroll and time and attendance.

Continue Reading About workforce planning

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HR terms frequently used by HR professionals.

Strategic workforce planning (SWP) 

What is strategic workforce planning.

Strategic workforce planning is a process that prepares companies to respond in advance to continuous and inevitable changes in the workplace.

Which areas can be improved through strategic workforce planning?

Strategic workforce planning provides market intelligence for organizations to enable informed decision-making related to:

• Changing customer needs
• Workforce demographics: retirements, remote workers, globalization, etc.
• Closing knowledge and skills gaps
• Succession planning, talent management, and people development
• Workforce deployment and flexibility
• Recruitment and selection
• Learning and development
• Organizational agility
• Maintaining DEI initiatives

How does strategic workforce planning benefit an organization?

Strategic workforce planning helps an organization predict its hiring needs for the near future and the long run, ensuring it has the best talent when required. It takes care of unforeseen circumstances by developing contingency plans.

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Workforce planning

Last updated 22 Mar 2021

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For most businesses, large or small, the task of identifying what work needs doing and who should do it is a continuous challenge! Workforce planning is the approach most businesses take to address this challenge.

It is rare that a business of any size operates for long without having to recruit or remove employees.

For example, consider why a business might need to recruit staff:

• Business expansion due to
• - Increasing sales of existing products
• - Developing new products
• - Entering new markets
• Existing employees leave:
• - To work with competitors or other local employers
• - Due to factors such as retirement, sick leave, maternity leave
• Business needs employees with new skills
• Business is relocating – and not all of existing workforce want to move to new location

The world of work is also changing rapidly:

• Increase in part-time working
• Increased number of single-parent families
• More women seeking work
• Ageing population
• Greater emphasis on flexible working hours
• Technology allows employees to communicate more effectively whilst apart
• People rarely stay in the same job for life

Businesses need to understand and respond to these changes if they are to recruit staff of the right standard – and keep them!

So what is workforce planning?

Workforce planning is about deciding how many and what types of workers are required

There are several steps involved in workforce planning:

• The workforce plan establishes what vacancies exist
• Managers produce a job description and job specification for each post
• Job description
• Detailed explanation of the roles and responsibilities of the post advertised
• Most applicants will ask for this before applying for the job
• Refers to the post available rather than the person

Job specification

• Sets out the kind of qualifications, skills, experience and personal attributes a successful candidate should possess.
• A vital tool in assessing the suitability of job applicants
• Refers to the person rather than the post
• Workforce planning
• Flexible working

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Featured Article

A comprehensive list of 2024 tech layoffs

From major layoffs at tesla, amazon and microsoft to small fintech startups and apps.

The tech layoff wave is still going strong in 2024. Following significant workforce reductions in 2022 and 2023 , this year has already seen 60,000 job cuts across 254 companies, according to independent layoffs tracker Layoffs.fyi . Companies like Tesla , Amazon , Google , TikTok , Snap and Microsoft have conducted sizable layoffs in the first months of 2024. Smaller-sized startups have also seen a fair amount of cuts, and in some cases, have shut down operations altogether .

By tracking these layoffs, we’re able to understand the impact on innovation across companies large and small. We’re also able to see the potential impact of businesses embracing AI and automation for jobs that had previously been considered safe. It also serves as a reminder of the human impact of layoffs and what could be at stake in regards to increased innovation.

Below you’ll find a comprehensive list of all the known layoffs in tech that have occurred in 2024, to be updated regularly. If you have a tip on a layoff, contact us here . If you prefer to remain anonymous, you can contact us here .

• January 2024: 19,350 employees laid off — see all January 2024 Tech Layoffs
• February 2024: 15,589 employees laid off — see all February 2024 Tech Layoffs
• March 2024: 7,403 employees laid off — see all March 2024 Tech Layoffs
• April 2024: 22,153 employees laid off — see all April 2024 Tech Layoffs
• May 2024: 9,882 employees laid off — see all May 2024 Tech Layoffs
• June 2024: 10,083 employees laid off — see all June 2024 Tech Layoffs

Is laying off about 250 employees in the latest in a series of job cuts after schools reopened across India following pandemic lockdowns.

Is ceasing its operations after its last-resort acquisition talks with Dailyhunt collapsed.

Upside Foods

Has cut its workforce by 26 people , CEO Uma Valeti wrote in an email to staff, as the lab-grown meat industry sees a decline in VC funding.

Is eliminating 20 employees , amounting to a third of its total workforce, as the company shifts its focus to software development.

Will cut approximately 4% of its workforce as part of a plan to boost growth, though the company is also one of many within its field facing a consolidated lawsuit alleging they engaged in price fixing .

Intends to lay off roughly 180 employees , amounting to 17% of its workforce, according to an SEC filing that amounts to its second recent round of layoffs .

Moxion Power

Is laying off more than 100 employees , according to a WARN filing. The news of the cuts comes after the company launched a large office expansion in Richmond, California.

Is reportedly conducting layoffs in Israel as it goes through a global restructuring.

Is reportedly cutting a large number of its staff after being acquired by French gaming company Voodoo .

Flutterwave

Has laid off about 30 people , accounting for 3% of its workforce, as it refocuses its business to enterprise.

Ginkgo Bioworks

Terminated 158 employees, with another batch of layoffs expected to come as the company aims to reduce its workforce by 25%.

Is making cuts to 10% of its workforce, impacting around 20 to 25 employees.

Is laying off 375 employees, accounting for 5% of its total workforce.

Will eliminate up to 85 employees based in Ireland, the company announced.

Is reportedly laying off around 30 employees in Israel and will move positions to other regions to cut costs.

Cut 16 employees in its supplier resource management department as it focuses on automation.

Is reducing its global headcount by 23% in a major restructuring effort as the online learning platform aims to become a “leaner” operation.

Is closing up shop and liquidating its assets. The number of employees affected is currently unknown.

Is reducing its headcount by 15% as the company attempts to “think in longer time frames,” the company announced in a blog post.

Is making more cuts, co-CEO Carey Anne Nadeau announced on LinkedIn . The number of employees impacted is currently unknown.

Will lay off its 143 employees by July 3 due to a “funding loss,” and will no longer be accepting new orders. The company has not shut down fully though, telling TechCrunch: “We are actively exploring options for the brand but do not have anything definitive to communicate at this time.”

Running Tide

Shut down its operations and laid off its remaining employees after raising more than $50 million since its 2017 start.

Is laying off 70 employees, about 30% of its workforce, three weeks after an earlier round of cuts impacted 34 employees.

Is slashing around 450 jobs at its Indonesian e-commerce division, accounting for 9% of the unit. 

Has eliminated around 30% of its total workforce , CEO Graham Gaylor confirmed in a statement.

Is reportedly conducting large cuts across the company. The total number of employees impacted is currently unknown.

Has cut around 45 jobs as part of a restructuring effort.

Copia Global

Has laid off at least 1,060 employees two weeks after the startup filed for administration.

Is laying off its 1,000+ staff drivers as it embraces a gig worker model similar to that of Lyft and Uber.

Has cut 30 employees a month after the Bengaluru-based startup laid off 160 people.

Has confirmed layoffs of 150 jobs as it drastically scales back its expansion ambitions to focus on its markets in Norway and Sweden.

Is laying off 100 workers, or 20% of its staff, in another round of cuts.

Is reportedly laying off 10% of its workforce, amounting to around 30 people.

Is reportedly cutting hundreds of employees working in its Azure cloud business, though the exact number of employees impacted is currently unknown.

Is laying off 100 employees months after reducing its headcount by 50 workers.

Is reportedly making large cuts globally across several of its Cloud teams, including teams focused on sustainability, consulting and partner engineering.

Is eliminating 40 employees as part of a restructuring effort, CEO David Campbell wrote in a post on LinkedIn . 

Gro Intelligence

Is shutting down its operations after laying off 60% of its staff in March in an attempt to stay afloat.

Jasper Health

Has laid off a substantial part of its workforce , TechCrunch learned. Engineering and product design departments were most impacted by the cuts at the cancer care platform startup.

Is laying off 37 tech workers at FlightStats , the flight tracking startup it acquired in 2016, as it plans to consolidate its operations in India and the U.K.

Is cutting 15 employees in a round of layoffs, impacting 20% of the Israeli startup’s total workforce.

Has laid off hundreds of employees in a bid to keep the EV startup alive . One current and one laid off employee told TechCrunch exclusively that an estimated 150 people remain at the company.

Is shutting down its operations and laying off the rest of its staff. The COVID-19 test company laid off half of its workforce earlier this month to cut costs.

Has let go of 105 employees as the company seeks to “streamline” its operations, according to an email to staffers from current CEO Gary Little.

Lucid Motors

Is laying off about 400 employees , roughly 6% of its workforce, as part of a restructuring ahead of the launch of its first electric SUV later this year.

Will reportedly make large cuts to its global operations and marketing teams. The amount of employees impacted is currently unknown.

Will reportedly cut 14% of its staff , impacting 175 employees, as the company shifts its focus from original Disney+ programming back to films.

Let go of 20% of its staff as the coding startup shifts its focus to enterprise sales.

Cut about 30% of its total workforce . The recruiting startup that uses AI to find candidates was last valued at over $1.2 billion in January 2022 .

Eliminated 6% of its staff in another round of layoffs as the fast-delivery startup attempts to become cash-flow positive by the end of 2024.

Plans to lay off 106 employees , according to a WARN notice filed in Texas. 

Has shut down its operations . The number of employees affected is currently unknown.

Is cutting roughly 1,000 jobs, impacting 8% of the company’s headcount, CEO Chris Hyams wrote in a letter to staff .

Cut around 40% of its workforce, impacting about 550 employees, sources told TechCrunch . The company’s chief operating officer, Abe Ghabra, has also left the company.

Will eliminate 57 positions in San Francisco , according to a WARN notice filed in California.

Is eliminating 800 employees , accounting for 13% of its workforce, as part of a restructuring effort.

Told The Verge it has laid off most of its staff and is no longer selling its smart home controllers and light switches as it looks for a buyer.

Laid off roughly 170 workers , impacting a third of its total headcount, in an effort to cut back on annual operating costs. 

Closed Arkane Austin, Tango Gameworks, and more game studios as part of cuts at Bethesda . It’s currently unclear how many employees will be impacted.

Is eliminating 230 employees, about 49% of its workforce, in a cost cutting measure laid out in documents filed with the U.S. SEC .

Is slashing its workforce by 20% . The cuts will affect around 140 employees, and the company is also cutting ties with “the majority” of its contract workers.

Has laid off about 3% of its workforce , impacting 116 people, the company confirmed to TechCrunch in a statement. The cuts come over a year after the company eliminated about 4% of its headcount .

Is laying off 15% of its workforce , affecting about 400 people, as part of a cost-cutting effort. The company’s CEO Barry McCarthy is also stepping down.

Has gutted its charging team in a new round of layoffs , CEO Elon Musk announced in an overnight email to executives.

Has laid off staff across key teams like Flutter, Dart and Python . It is currently unclear how many employees were let go.

Is laying off more employees to “preserve cash,” according to an internal email viewed by TechCrunch . The number of cuts is currently unknown.

Is shutting down operations in the U.S., the U.K. and Europe, impacting at least 6,000 jobs across the closing markets .

Is cutting about 180 jobs in a profitability push and has let go its chief executive Hemant Bakshi, a source familiar with the matter told TechCrunch.

True Anomaly

The space and defense startup laid off nearly 30 people, accounting for about 25% of its workforce, due to “duplication of roles and functions across the company,” TechCrunch exclusively reported.

Is expected to cut employees in its Austin office for the second time this year.

Plans to eliminate 740 employees at its Oregon headquarters this summer, according to a WARN Act notice.

Stability AI

Is eliminating 10% of its workforce following the exit of former CEO Emad Mostaque.

Is laying off workers as part of continued cost cutting measures . The number of employees affected was at the time unknown.

Is reducing its total workforce by 1% . It’s the second round of layoffs for the EV maker this year.

Is laying off 5% of its workforce , affecting around 579 employees. The GTA 6 publisher also announced the elimination of “several projects” in development.

Is eliminating about 20% of its 59 employees in a restructuring effort.

Is cutting “more than 10%” of its global workforce , per an internal email sent by CEO Elon Musk. That could impact more than 14,000 workers worldwide, as Tesla prepares itself “for our next phase of growth” amid a challenging EV market.

Is reducing its global workforce by nearly 4%, impacting up to 140 employees .

Is laying off 250 employees based in Ireland as it restructures its Training and Quality team.

Hinge Health

Cut approximately 10% of its workforce, TechCrunch exclusively learned , as the company prepares for an IPO and aims to reach profitability.

Has laid off 382 employees, amounting to 32% of its total workforce, TechCrunch exclusively learned . The background-screening platform was last valued at $5 billion in April of 2022.

Reportedly laid off a sizable part of its staff in a restructuring effort. The number of employees impacted is currently unknown, but sources told Inc42 that it could be “in the range of 70-100” workers.

Is laying off 614 employees in California after abandoning its electric car project , according to a WARN notice .

Agility Robotics

Has laid off a “small number” of employees as part of a company-wide focus on commercialization efforts.

Ghost Autonomy

Shut down operations. The company, which was backed by OpenAI, employed about 100 people .

Is shutting down Yummly , the recipe and cooking app it acquired in 2017.

Will cut hundreds of jobs across Sales, Marketing, Global Services and its Physical Stores Technology team.

Byju’s

Is laying off about 500 employees , accounting for 3% of its total workforce, as part of a restructuring effort.

Has laid off 20% of its staff after acquiring point-of-sale platform Cuboh. The company previously laid off 100 people in 2022.

Nintendo of America

Is restructuring its testing department, which is largely made up of contractors. A Nintendo spokesperson told Kotaku the changes will end some assignments but will lead to the creation of new full-time positions.

Cut its global workforce by about 6,000 jobs , according to a 10-K SEC filing . The filing reveals the company cut 13,000 jobs in the last year .

Has made cuts to its staff, the company confirmed to TechCrunch . A report in Fintech Business Weekly estimates that 17 people, or about 15% of the company, were impacted. 

Is cutting 195 roles in an effort to become more sustainable, CEO Henry Chan wrote in a blog post . The layoffs impact nearly a quarter of its staff.

Reportedly eliminated 20% of its total workforce in its second restructuring effort in the past year.

Chipper Cash

Conducted another round of layoffs impacting 20 employees, CEO Ham Serunjogi announced in a blog post . 

Has reportedly cut 16% of its staff in a strategic move to support its Textio Lift product. 

Is reportedly laying off around 25% of its workforce . According to Axios, the cuts affect roughly 80 people.

Phantom Auto

Is shutting down after failing to secure new funding, TechCrunch has learned . The remote driving startup, which had cut staff last year, employed a little more than 100 people.

Is reportedly slashing its marketing and communications staff. The company previously announced a strategy to replace upwards of 8,000 jobs with AI.

Inscribe.ai

Cut just under 40% of its staff, equating to dozens of employees, the company confirmed to TechCrunch .

Laid off around 15 people earlier this year , following comments from CEO Chris Caren that the company would be able to reduce 20% of its headcount thanks to AI.

Laid off 13% of its staff based in its New York office as the web3 fantasy sports platform focuses on its Paris headquarters, a source familiar with the matter told TechCrunch .

Is eliminating roughly 7% of its workforce as part of organizational restructuring. The fintech unicorn last conducted layoffs in August 2022.

Is cutting about 13% of its workforce , affecting 40 employees. It’s the second round of layoffs for the battery startup in recent months.

Project Ronin

Is shutting down, resulting in a “permanent mass layoff” impacting around 150 employees.

February 2024

Plans to lay off 15% of its workforce and says it likely does not have enough cash on hand to survive the next 12 months.

Cut 5% of its workforce , impacting 670 employees, as it moves away from the “development of future licensed IP.”

Is letting go of about 350 employees, accounting for 30% of its workforce.

Is likely cutting hundreds of employees who worked on the company’s autonomous electric car project now that the effort has stopped, TechCrunch has learned.

Is laying off 900 employees from its PlayStation unit, affecting 8% of the division’s workforce. Insomniac Games, Naughty Dog, Guerrilla and Firesprite studios will also be impacted .

Will reportedly cut 1,500 roles in 2024 , primarily in its Product & Technology division, accounting for more than 8% of the company’s workforce.

Eliminated roughly 60 employees , or 17% of its workforce. It’s the financial startup’s third major layoff round in the past 12 months.

Is laying off 10% of its salaried workforce in a bid to cut costs in an increasingly tough market for EVs.

Meati Foods

Will lay off 13% of its workforce as it works to “build a financially sustainable business,” CEO Phil Graves told TechCrunch exclusively .

Announced it will eliminate 5% of its employees, impacting more than 4,000 people .

Will lay off about 550 workers in a move designed to promote “operating expense efficiency.”

Announced in an SEC filing that it will lay off roughly 250 employees as part of a restructuring effort.

Is scaling back its investment in a number of products, TechCrunch has learned, resulting in layoffs that will affect roughly 60 employees .

Is laying off 230 employees worldwide as part of the company’s efforts to advance its focus on “the AI-enabled workplace of the future.”

Is cutting 30% of its North American workforce as part of a restructuring.

Is reportedly cutting jobs in its healthcare businesses One Medical and Amazon Pharmacy. The number of impacted roles is currently unknown.

Announced plans to eliminate 6% of its workforce , largely impacting the company’s sales and marketing divisions.

Announced plans to cut 10% of its workforce , impacting roughly 500-plus employees, in an effort to “reduce hierarchy.”

Polygon Labs

Has laid off 60 employees , or about 19% of its staff, CEO Marc Boiron announced in a blog post .

Is laying off approximately 400 employees . The layoffs come almost exactly a year to the day after Okta announced plans to cut about 300 employees.

January 2024

Will lay off 95 workers in New York City, according to a filing with the New York Department of Labor.

Is laying off about 6% of its global workforce , or 280 employees, the company confirmed to TechCrunch.

Conducted another round of layoffs earlier this month, amounting to roughly 15% of its workforce, a source familiar with the situation told TechCrunch. 

Is reportedly laying off around 1,000 people in the Cash App, foundational and Square arms of Block.

Has reportedly begun company-wide layoffs . While it is unclear how many people will be affected, one source told TechCrunch it was expected to be in the “thousands.”

Aurora Solar

Has laid off 20% of its staff of about 1,000 people, TechCrunch exclusively learned. The cuts to the software startup come despite record growth in the solar industry last year.

Is laying off 350 people , or one-third of its headcount, after Amazon’s bid to acquire the Roomba-maker shuttered. Longtime CEO Colin Angle has also stepped down.

Is reportedly laying off 700 workers , or around 1% of its staff. This comes after the company had a significant reduction of 10% of its workforce in 2023.

Is reportedly planning to cut around 20% of its staff in the next few weeks. The company announced similar cuts in October, when founder Ryan Petersen returned as CEO and slashed its workforce by 20%.

Is laying off 1,900 employees across its gaming divisions following its acquisition of Activision Blizzard. Blizzard president Mike Ybarra announced he will also be stepping down.

Is cutting about 400 jobs , 7% of its workforce, as the food delivery startup seeks to bring further improvements to its finances ahead of a planned IPO later this year.

Laid off dozens of workers , according to sources familiar with the decision. The autonomous vehicle technology company has since confirmed that about 3% of its workforce has been laid off.

Will lay off 9% of the company’s workforce , affecting about 1,000 full-time employees. In a blog post , the company also plans to cut contract roles in the coming months.

Announced it intends to offer voluntary buyouts or job changes to 8,000 employees amid restructuring.

Laid off 20% of its staff , affecting 282 workers. In a blog post , Co-CEO Pedro Franceschi said that the company is prioritizing “long-term thinking and ownership over short-term gains in our comp structure.”

Eliminated around 60 jobs across the U.S. in Los Angeles, New York, and Austin in addition to layoffs in international markets. The affected roles, according to NPR’s initial reporting, are largely in sales and advertising.

Is cutting 90% of its employees as it shuts down its online used car marketplace and shifts resources into two business units: one focused on auto financing and the other on AI-powered analytics.

Is laying off 11% of its workforce , affecting about 530 employees, as the company focuses on “fewer, high-impact projects.” The League of Legends maker is also sunsetting its five-year-old publishing group , Riot Forge.

Is eliminating 13% of its global workforce , affecting 1,650 employees, in a restructuring effort aimed at cutting layers of management.

Will eliminate 100 employees , a spokesperson confirmed to TechCrunch, as part of a restructuring effort in its creator management and operations teams.

Is laying off “hundreds” of employees in its advertising sales team, according to a leaked memo. The cuts come a week after the company did sweeping layoffs across its hardware teams. And more layoffs will come throughout the year, as CEO Sundar Pichai told the company in a memo obtained by the Verge .

Lost Boys Interactive

Reportedly laid off a “sizable” number of employees January 12. The game developer studio was acquired by Borderlands maker Gearbox in 2022.

Is going to lay off employees in 2024, TechCrunch exclusively learned , with the total impacted employees potentially reaching as high as 20% of the animation studio’s 1,300 person workforce. The cutbacks come as Disney looks to reduce the studio’s output as it struggles to achieve profitability in streaming.

Is laying off 5% of its workforce , citing an “increasingly challenging landscape,” according to a leaked memo obtained by Business Insider.

Is laying off 17% of its staff , impacting 170 people. In an internal memo obtained by the Verge , Discord CEO Jason Citron blamed the cuts on the company growing too quickly.

Laid off hundreds of employees across its Google Assistant division and the team that manages Pixel, Nest and Fitbit hardware. The company confirmed to TechCrunch that Fitbit co-founders James Park and Eric Friedman are also exiting.

Is laying off “several hundreds” of employees at Prime Video and MGM Studios, according to a memo obtained by TechCrunch. The cuts come days after the 500 layoffs at Amazon’s Twitch .

Is reportedly laying off 500 employees , 35% of its current staff, amid a continued struggle to achieve profitability in the face of rising costs and community backlash. The pending layoffs come after hundreds more employees were laid off in 2023.

Treasure Financial

Confirmed to TechCunch that layoffs, conducted in December, had impacted 14 employees, accounting for 60% to 70% of the company, according to multiple sources.

Confirmed it cut 10% of its contractor workforce at the end of 2023 as it turns to AI to streamline content production and translations previously handled by humans.

Rent the Runway

Will cut about 10% of corporate roles as it goes through a restructuring plan following Anushka Salinas’ planned resignation as operating chief and president at the end of January.

Is reducing its workforce by about 25% , or 1,800 people. The video game engine maker went through three rounds of layoffs in 2023.

Laid off two-thirds of its employees as the German startup, which built collaborative presentation software, looks to pursue a “completely different path.” CEO and co-founder Christian Reber also stepped down.

The AI and biomedical startup reportedly cut 17% of its workforce January 8, citing “shifts in the economic environment,” in a LinkedIn post announcing the layoffs. 

Eliminated 38% of its staff January 8 as the online retail logistics company follows up after conducting layoffs in September 2023.

Announced January 8 it is laying off 28% of its staff , or 154 workers, as the small modular nuclear reactor company shifts its focus to “key strategic areas.”

Is reportedly laying off 15% of its workforce focused on computer vision for retailers.

Is shutting down at the end of 2024 after a 12 year run. The design collaboration startup was once valued at nearly $2B.

Is laying off nearly 20% of its workforce as it tries to maintain its battle with Nielsen over media measurement. CEO Ross McCray stepped down from the company.

Orca Security

Is laying off roughly 15% of its staff , totaling 60 employees. The Israel-based unicorn reportedly plans to move some impacted employees into other positions at the company.

Laid off its entire 200-person workforce January 2 after attempts to raise more capital failed, TechCrunch exclusively learned . The mass layoff comes just seven months after the startup acquired rival Zencity . 

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What is Project 2025? The conservative road map is raising a lot of eyebrows, on both sides of the aisle.

• Project 2025 is a road map for the next Republican president.
• The Heritage Foundation, a prominent conservative think tank, authored the plan.
• It calls for eliminating the Education Department, among some other surprising things.

Well before the disastrous presidential debate during which President Joe Biden may have handed the keys to the White House back to former President Donald Trump, conservative thinkers were assembling a game plan.

In January 2023, The Heritage Foundation began promoting Project 2025, a 922-page "playbook" assembled with input from dozens of other conservative organizations to guide the next Republican administration.

"The time is short, and conservatives need a plan," reads the website for the right-wing presidential transition plan . "The project will create a playbook of actions to be taken in the first 180 days of the new Administration to bring quick relief to Americans suffering from the Left's devastating policies."

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Some of Project 2025's priorities include:

• Slashing employment in the federal government and muzzling "woke propaganda at every level of government"
• Eliminating the Department of Education and its "woke-dominated system of public schools"
• Prohibiting the FBI from fighting misinformation and disinformation
• Ending the "war on fossil fuels" and allowing further development on Native American lands
• Ending active FBI investigations that are "contrary to the national interest"

The plan is so extreme that even Trump has distanced himself from it, writing on Truth Social this week that he knows "nothing about Project 2025."

"I have no idea who is behind it. I disagree with some of the things they're saying and some of the things they're saying are absolutely ridiculous and abysmal. Anything they do, I wish them luck, but I have nothing to do with them," Trump wrote.

A spokesperson from Project 2025 told Business Insider that the playbook "does not speak for any candidate or campaign."

"We are a coalition of more than 110 conservative groups advocating policy and personnel recommendations for the next conservative president. But it is ultimately up to that president, who we believe will be President Trump, to decide which recommendations to implement," the spokesperson said.

Watch: Donald Trump announces 2024 presidential run amid legal woes

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