Workforce Planning

Author: Stacy Chapman

Updating Author: Kim Freeman

Introduction

Expenses related to workers are among the highest costs for businesses. Making sure an organization has the right number of employees - finding the right hires - with the right skill sets - for the right positions - at the right price - can mean the difference between profit or loss and achievement or failure of the organization's short- and long-term objectives. Effective workforce planning contributes to an organization's financial well-being, productivity and talent acquisition.

HR professionals use workforce planning to meet short- and long-term strategic plans. Different methodologies apply depending on how far in advance plans are made. Operational workforce planning (OWP) is used for workforce plans under a year, while strategic workforce planning (SWP) addresses needs further into the future.

A critical factor in developing effective strategies includes working with leadership to define who makes up the future workforce, where the work happens, and how to fill workforce demands, especially when supply is low. Understanding the demographics of desirable candidates and planning for multiple possible scenarios to be ready to adapt and be flexible in uncertain and changing  job markets is crucial.

This guide helps employers understand the essential function of of workforce planning, why it is important and the associated business benefits. Although the concepts and methods are applicable to all organizations, every organizaton will apply them differently depending on an organization's size and challenges.