October 2008 Research Report
Workforce planning looks at internal and external factors that will impact the supply
(employees) and demand (work to be performed) balance of an organization’s workforce.
Workforce planning is one part of the broader initiative of strategic talent management.
Sometimes workforce planning is confused with succession planning (looking at the
supply/demand of a specific occupation or role) or replacement planning (reviewing who
would replace specific individuals if they exit the organization), which are both parts of
the talent management strategy. This paper will focus on workforce planning; how to
conduct it and what tools technology can offer to help you plan for the future needs of
With workforce planning it is always good to start with the end in mind. That end result
should include reduced operating costs, increased revenue, reduced time to revenue
creation, improved client satisfaction, reduced/increased attrition, increased quality, etc.
Remember that everything in an effective workforce planning program (strategies,
policies, measurement systems and communications) must support the core mission of
The first step of workforce planning is to identify the roles and/or occupations within
your organization that are critical to the organization’s present and future direction.
Many consultants suggest creating a standardized list of questions and interview
workgroup leaders throughout the organization. Some sample questions include:
What are your key business goals and objectives for the next year? Two years?
What is your competitive environment like and how will it impact your ability to
meet these goals and objectives?
What are the critical processes that are needed to meet those goals? What are the
key success factors for achieving future outcomes?
What are the key work activities associated with these success factors?
What are the barriers to optimally performing the work activities?
What talent pools can affect those barriers?
What does your current talent pool (current employees) look like today and how
will it affect your ability to achieve success in the future?
What people capabilities are needed to deliver on those critical processes?
What are the most critical people issues you currently face?
What do you think the most critical people issues will be in one or two years?
Which positions and capabilities are most critical to your business?
Once you determine what the critical needs are for each department and organization-
wide, it’s time to look at how the current workforce stacks up against the needs of today
and the future. Below is a table taken from Reward $ystems Inc. that could easily be
created in Excel as a tool to help you examine the current workforce.
Critical Supply Demand Demand in How long to Gaps: Strategy for
Skill Today Today 1 yr; 2 yrs; develop Supply / Closing
5 yrs skills? Demand Gaps
1 yr; < 1 yr 1 yr;
2 yrs; 1-2 yrs 2 yrs;
5 yrs 2-5 yrs 5 yrs
1 yr; < 1 yr 1 yr;
2 yrs; 1-2 yrs 2 yrs;
5 yrs 2-5 yrs 5 yrs
Once the gaps are identified for the current and future workforce, then it is time to
analyze and discuss what the organization plans to do about closing those gaps. This
might take the direction of things like hiring new talent, training the existing workforce,
modifying the current job structure, or changing the organization’s recruitment strategy to
meet the demands of the business. It is critical to remember that the direction of this
analysis needs to be guided directly by the organization’s strategic vision and direction.
The two plans should be directly linked together to ensure consistency across the
organization and maximize the benefit to the organization in the future.
Workforce Planning Technology
While this may seem like a very simplistic way to go about workforce planning, it is a
very thorough process if done correctly across the organization. In reality these processes
become complicated very easily and it is sometimes difficult to look at various “what if”
Infohrm is an organization that provides on-demand workforce reporting, workforce
analysis, workforce planning and benchmarking solutions. Their solution helps
organizations create forecasts and conduct financial modeling from the company’s HRIS.
They offer products such as “what-if” applications, where you can model the skills and
competencies needed for the future, and incorporate external market data into reports and
financial models to compare your employee information to sources such as the Bureau of
Infohrm’s four-step workforce planning methodology is as follows:
1. Strategic Analysis: Analyze internal and external business issues and drivers
and link workforce planning to business planning.
2. Demand Forecasting: Estimate the demand for number and type of employees
for scenario (how many and what sort of people will we need?)
3. Supply Forecasting: Making workforce supply forecasts on the basis of internal
and external workforce data (how many and what sort of people will we have?)
4. Strategy Development: Developing strategies to bridge any demand/supply gaps
between the “need” and “have”.
Below is an example of how managers and HR can have the ability to create forecasts
and ‘what if’ statements.
Infohrm also allows users to create future scenarios, such as the example below.
Reports can show results of your scenarios such as the supply forecasting report and the
gap analysis below.
To learn more about what Infohrm can do to help your organization, please contact Joe
Morrissey, Director of Sales. Email: Joe.Morrissey@infohrm.com. Phone: 202-589-
Online Tool from AARP
AARP created a free online tool to help employers assess their current and future
workforce needs. While this is not as in-depth as a formal workforce planning initiative,
it can serve as a starting point to begin your analysis. The AARP Workforce Assessment
Tool asks a number of questions and takes less than 30 minutes to complete. After you
complete the online questionnaire, you will receive an individual report providing an
overview and a road map of areas for improvement to help meet future workforce needs.
To view the tool, visit: www.aarp.org/workforceassessment
Regardless of how you capture your information, comparing current employee
information to future workforce needs is the basis of conducting planning for your
workforce. Similar steps are followed if you utilize a workforce planning process with
Word and Excel versus analytical software such as Infohrm, which can be cost-
prohibitive. Don’t get too wrapped up into having ‘perfect data’; moving forward with
solid data will better position you for future success than working for years to create the
perfect database. By then, you might find that your competition will already have
planned for and created the talent supply to meet its needs.
Workforce planning will help you, as an HR professional, stay ahead of the talent
demand of your organization. You will be able to proactively prepare the workforce for
the future and allow the organization to be ready to meet future challenges. As with all
forecasting, sometimes things change. Creating a solid workforce strategy and
continuing to update and revise that strategy will be the key to your success in this
Eskenazi, J; Henson, M. (August 2005) Workforce Planning: the Key to True Staff
forecasting and Strategic Staffing. SHRM White Paper.
Green, R. (Fourth Quarter 2007) Ensuring Future Workforce Viability.
HR Magazine (September 2008) “What’s New”.
Infohrm product information provided by Joe Morissey: October 8, 2008
Stachura, T.; Lesser, E. (June/July 2008) Work Force Planning as a Competitive
Advantage: Enabling Success in a Services Business. IHRIM.link.