Skip to Main Content
Filter By +
Topic +

Workforce Planning: Types and Benefits

7 Minutes to Read

Topics covered


    Workforce planning is a process that allows organizations to align their employees with long-term business goals. It works by assessing current and future staffing needs and closing the skills gaps necessary to sustain growth. Read how the different forms of workforce planning function and HR’s role in optimizing an organization’s performance.

    If it feels like a constant scramble to find the right people for your company, you’re not alone.

    Fortunately, there’s a solution: workforce planning, a modern approach to assembling top talent aligned with your organizational goals.

    Let’s take a deep dive into workforce planning — what it is, why it matters and the various approaches you can use to build a future-ready team.

    What is workforce planning?

    Workforce planning is a process designed to help organizations align their human resources (HR) with business objectives. It’s a multipronged approach that allows companies to:

    • assess their current staff’s capabilities
    • forecast future needs
    • identify gaps
    • implement strategies to bridge those gaps

    This way, companies can ensure they have the right number of people with the right skills in the right places at (you guessed it) the right times.

    Why is workforce planning important?

    Workforce planning is a critical business process that helps companies achieve their long-term goals. It starts with a comprehensive evaluation of the existing workforce — their skills, experience and performance — to determine how well they align with the company’s future goals and expected industry trends. And identifying strengths and weaknesses allows the company to address any critical gaps that could hinder progress toward long-term goals.

    With these insights, businesses can implement:

    By ensuring the workforce’s composition and capabilities align with future needs, workforce planning optimizes organizations to help achieve strategic goals, giving businesses a competitive advantage in the market.

    Types of workforce planning

    Two main types of workforce planning exist: operational and strategic. Each one differs in terms of the time frames and objectives they address. By combining these two approaches, businesses can meet their current operational demands and future strategic objectives with a more resilient and adaptable workforce.

    Operational workforce planning

    Operational planning zeroes in on the granular, day-to-day aspects of employee operations — from managing resources to assigning tasks — ensuring that each employee’s daily activities align with immediate business needs. Scheduling software, for example, can forecast workloads, employee skill sets and availability to generate optimized shift patterns.

    Strategic workforce planning

    Strategic planning addresses broader, long-term issues across the entire organization, with a focus on aligning the workforce with future business goals — from identifying future requirements to assessing demographic changes and forecasting workforce trends.

    For instance, a business could conduct a gap analysis to compare current workforce capabilities with future needs, which they could then use to develop a plan for employee recruitment, training and development.

    What are the benefits of workforce planning?

    Workforce planning offers numerous benefits for businesses, each impacting the efficiency and effectiveness of a business and its employees.

    Putting the right people in the right roles can significantly reduce operational downtime, with adequately staffed teams that can meet demand without overburdening individuals. It also minimizes the costs associated with filling open positions — like recruiting expenses and productivity losses due to unfilled roles — through more precise hiring and internal development.

    Done effectively, workforce planning can create a culture where employees feel valued and understood, with a clearly articulated vision for growth and career development.

    Clear road map for organizational success

    Workforce planning provides businesses with a blueprint for success, including all the skills and personnel needed to achieve current and future goals. It aligns human resources with long-term objectives and helps HR avoid skill shortages and operational downtime so projects and tasks run smoothly.

    This road map aids in identifying prospective challenges and opportunities, which can lead to more informed decision-making, effective employee development, and a flexible and adaptive workforce that can navigate complex challenges.

    Discovering gaps and opportunities to increase productivity

    Workforce planning helps businesses evaluate their current workforce relative to future business requirements, identifying any gaps in staffing levels, skills or capabilities. Through detailed analysis, companies can identify any spots where productivity can be improved, whether through additional training or a reallocation of resources.

    It also helps uncover opportunities for innovation and process improvements by highlighting areas where new skills or technologies can be introduced to stay ahead of the competition. Addressing these gaps and capitalizing on opportunities leads to a more efficient, effective and agile workforce, which, in turn, can increase overall productivity and organizational performance.

    Succession planning

    Workforce planning also assists in succession planning, ensuring a seamless transition in key positions and minimizing disruptions to business operations. It allows employers to identify critical roles and potential future leaders by assessing the skills, experience and developmental needs of current employees. This level of foresight can help prepare internal candidates for leadership roles through targeted training and mentorship programs.

    Put simply, workforce planning helps maintain continuity and supports strategic growth, developing a pipeline of qualified leaders ready to tackle future business challenges.

    Improved retention rate

    Another critical component of workforce planning is ensuring that employees are engaged, well-suited to their roles and have clear career development paths within the company. By carefully analyzing existing capabilities and predicting future needs, workforce planning can identify growth opportunities for employees and align their personal aspirations with business objectives. In turn, businesses reduce turnover by fostering a supportive work environment and providing long-term career prospects for their employees.

    Improved workplace culture

    Effective workforce planning can enhance the culture in a workplace, ensuring that business objectives align with the needs and well-being of its staff. It helps organizations create a diverse, inclusive and supportive work environment, one where employees feel appreciated and understood. It also encourages a culture of continuous learning and development by identifying opportunities for growth and increasing employee engagement and satisfaction. All of this helps align workforce strategies with organizational values, cultivating a sense of purpose and belonging among employees.

    Actionable data

    Workforce planning helps HR teams manage their workforce more effectively by analyzing the current abilities and future needs and identifying any gaps. This process provides critical data on things like workforce:

    • demographics
    • skill sets
    • performance levels
    • potential trends

    With this information in tow, HR can make informed decisions on everything from recruiting and training to development and retention strategies, ensuring the company’s human resources align with its strategic objectives.

    This data-driven approach helps businesses measure and track the effectiveness of HR initiatives, which also improves workforce management practices.

    What is the role of HR in workforce planning?

    HR plays a central role in workforce planning; the team is at the forefront of the process, responsible for aligning business objectives with human capital needs. They orchestrate the entire workforce planning process, from identifying skills gaps to developing strategies that address them.

    HR’s role in workforce planning includes:

    1. Data collection and analysis. HR collects and analyzes data on the current workforce — its skills, performance, potential and more. This information provides insight into understanding the gaps between a business’s current state and its future strategic goals.

    2. Forecasting and strategy development. HR forecasts future workforce requirements based on business growth, tech advancements and market trends. They then develop strategies for talent acquisition, development and retention to meet these future needs.

    3. Implementation and monitoring. HR implements strategies through recruiting, training programs and succession planning. They’re also responsible for monitoring their progress and making necessary adjustments to ensure the strategies are effective.

    For effective workforce planning, HR should leverage some specific key metrics that can guide and measure success. These metrics include:

    • Turnover rates. High turnover can indicate mismatches between job roles and employee skills or dissatisfaction. Lowering turnover rates is often a primary objective of workforce planning.
    • Time-to-fill. The average time it takes to fill open positions. Reducing this metric usually indicates more efficient recruiting processes.
    • Employee engagement scores. High engagement scores often correlate with increased productivity and reduced turnover. HR can use these scores to gauge the effectiveness of workforce development and retention strategies.
    • Skill gap analysis. Identifying areas where current workforce skills don’t align with future needs can help HR prioritize training and development efforts.
    • Succession planning metrics. Tracking employees’ readiness to fill key roles can ensure the organization is prepared for transitions.

    In a way, HR is the conductor guiding the orchestra that is workforce planning. They have the expertise to manage all the complexities of aligning human capital with strategic objectives, and they play a critical role in creating a culture that values continuous learning and employee engagement.

    By effectively managing the workforce planning process, HR can help create a resilient, high-performing organization capable of conquering future challenges.

    Explore Paycom’s resources to learn more about HR strategy, workforce management and more.

    DISCLAIMER: The information provided herein does not constitute the provision of legal advice, tax advice, accounting services or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional legal, tax, accounting or other professional advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation and for your particular state(s) of operation.