Nobody knows what the future holds, but planning makes navigating uncertainty much easier. This is especially true in business, where emerging technologies often leave companies stranded, and market shifts make it hard to parse ideal staffing levels.
Without a crystal ball to tell us how the labor market might shift or how to prioritize talent needs, the next best thing businesses have at their disposal is strategic workforce planning, which anticipates trends and positions organizations to handle change.
While we don’t have a crystal ball or any fairy dust to help you magically implement workforce planning, we do have this guide, which introduces the ins and outs of the process and offers a step-by-step breakdown of strategic workforce planning (otherwise known as SWP).
TL;DR — Key Takeaways
- Strategic workforce planning analyzes the supply and demand of critical skills, ensuring companies have the talent they need now and in the future.
- Strategic workforce planning avoids future skills gaps, enables seamless transitions to new ways of working, decreases hiring costs (and the cost of repeated hires), and aligns HR activity with strategic business goals.
- The workforce planning process starts by identifying strategic goals. HR teams assess skills gaps and future scenarios. They develop a hiring plan and regularly evaluate the plan to ensure continuity over the long term.
- Apply best practices and common principles to simplify the most common SWP challenges. Leverage planning tools and create a systematic process to assess skills, plan needs, and fill gaps.
- Toggl Hire helps with every aspect of strategic workforce planning. Discover streamlined skills testing for employees and potential hires, gather data for training and career development, and set your organization up to thrive.
What is workforce planning?
Workforce planning analyzes the supply and demand of talent, enabling organizations to source the skills they need to meet critical goals. Analysts typically assess current skill levels and forecast future needs. They use that analysis to create long-term strategies to avoid skill gaps and ensure operational success.
Springboard research proves the importance of this approach — some 70% of HR professionals report their organization has an existing skills gap, and LinkedIn also highlights skills agility as a top priority for L&D leaders.

Example of workforce planning in action: An online retailer wants to start marketing products via Snapchat and TikTok but has no experience with these platforms. It needs videographers and analysts to guide content production. Strategic planners source these skills on a phased basis, allowing the retailer to test channels and find methods that work for them.
Companies that implement smart planning methods know their internal skill levels and provide employees with routes to boost their skills. They have systems in place to find suitable recruits and reduce the risk of being blindsided by the pace of change.
7 benefits of workforce planning
Implementing enterprise-wide workplace planning strategies is a massive undertaking. So, to justify the heavy lifting, let’s get clear about the benefits. That way, you can set metrics for success and sell the project to departmental managers and executives.

1. Prepare for the future
Companies that anticipate the future are well-placed to shape it. Strategic workforce planning allows forward-thinking companies to stay ahead of the curve while competitors struggle, and it does so in a few ways.
First up, the workforce planning process forecasts future labor needs. For instance, a fashion label might want to use AI market analysis to make flexible deliveries to global markets. Workforce planning lets the label recruit coders and engineers to meet that need and smoothly transition from older marketing systems.
But it’s not just about how many employees you’ll need to handle future workloads, but rather their skills that’ll help the organization succeed.

The World Economic Forum suggests 44% of employee skills will be irrelevant by 2028. Workforce planning allows you to identify areas of weakness and strategically plug those gaps in your business strategy.
Finally, workforce planning boosts flexibility when dealing with sudden labor demand or supply changes. We only need to remember “the Great Resignation,” which peaked when an unprecedented 4.5 million people quit their jobs in one month. In tight labor markets like that, workforce plans help, as they include contingency plans to replace workers or upskill staff to keep them on board.
2. Decrease hiring costs
The average new hire costs companies between $4,000 and $16,000. That number increases drastically if your hiring process fails (resulting in high employee turnover rates or a bad hire), and you must re-advertise positions or use more costly methods like external agencies.
Fortunately, workforce planning processes reduce hiring costs in several ways:
Targeted recruitment efforts
Well-planned recruitment campaigns attract candidates with the skills needed to meet strategic goals. Companies that plan are less likely to hire reactively. Human resources teams can carefully fill positions and avoid costly mistakes.
Leverage internal talent
According to PWC, only 40% of companies use upskilling in their recruitment strategies. Gallup reports that 57% of US workers want to upskill, while 65% see upskilling opportunities as a major draw when seeking a new employer. With strategic workforce planning, you can easily identify employees with the chops to take on new roles.
Reduce employee turnover
Three-quarters of millennials and Gen Z employees would quit a job that doesn’t provide the opportunity to learn new skills. With the right plan, you can create promotion routes that meet internal demand for career opportunities and encourage high-value employees to stick around instead of looking elsewhere.
3. Improve HR efficiency
A strategic workforce plan improves HR efficiency, allowing professionals to create streamlined processes that meet core goals. There are four key ways that planning contributes to efficiency:
- Analytical processes allow HR teams to create an ideal candidate profile for each role. They can assess the outstanding performers in each department and seek recruits with similar strengths.
- Workforce aligns recruitment with business aims. HR teams can integrate core competencies into job ads or internal recruitment searches, ensuring every hire meets the company’s talent needs.
- Strategic planning identifies redundancies within the business organization. Roles and responsibilities may overlap, resulting in duplicated workloads. Operational workforce planning eliminates these overlaps and boosts efficiency.
- Workforce planning enables efficient resource allocation. HR teams can assign the ideal personnel to projects, and companies can scale up teams without compromising staffing elsewhere in the organization.

4. Align HR with business goals
Workforce planning aligns HR with accounting, marketing, IT, and product development departments. As a result, companies can leverage data-driven insights to reshape the workforce as business goals shift.
The implications are huge, especially considering the sheer number of companies making massive digital transformations or moving from office-based to hybrid working models.
Amazon suggests 72% of companies struggle to source the digital skills they need. In that context, making digital transitions and staying in tune with business goals is only possible with strategic thinking.
5. Improve resource allocation
Every extra hire adds to the wage and benefits bottom lines, while bad hires damage productivity and add hidden costs that impact company turnover. Workforce planning tools identify areas of overstaffing or underutilization.
Example: United Airlines famously offered its pilots unpaid leave to combat an overstaffing problem due to Boeing aircraft delivery delays.
Underutilization of resources can also occur when companies don’t capitalize on employee capabilities. A smart company implementing workforce planning would better understand employee skills and either recommend training or reshape roles to suit those skills.
6. Increase employee retention rates
Replacing employees is expensive. Estimates vary, but hiring new staff usually costs between half and two times the salary of an existing employee. Given those numbers, maximizing retention rates should be a core business goal.
Workforce planning can achieve that goal by identifying growth opportunities for existing staff. This is great for your business, sure, but ultimately, it’s about the employees — individuals who feel valued are more likely to stay, and workforces that feel valued tend to work more productively.
HR teams can use workforce planning to create personal development plans for every employee. Entry-level workers should see a route to becoming business leaders. If they see a dead end, they will soon look elsewhere.
7. Facilitate succession planning
Succession planning ensures companies can smoothly replace high-value employees. Too often, business leaders fail to prepare their successors properly. Talent planning supplies a solution, allowing HR teams to assess internal skills and train high-potential employees to take on more responsibility.
Succession planning also protects institutional knowledge. Training, experience, and mentoring prepare employees for senior roles. This way, critical knowledge passes from person to person without difficult and disruptive interim periods.
5 key elements of workforce planning
Effective workforce planning requires a systematic approach to identify objectives, analyze existing skill levels, and implement ongoing recruitment plans. The exact mix and order of steps varies, but we like the five-step process outlined by the US Office for Personnel Management (OPM).

1. Identify strategic objectives
At the start of the process, companies need a clear action plan related to their strategic aims.
HR teams should link every aspect of recruitment and upskilling to your organization’s strategic plan. What is your long-term business strategy? What metrics do HR professionals need to track to understand recruitment or training needs?
At this stage, it makes sense to consult managers and stakeholders across all departments. For example, digital marketers may supply metrics about conversion rates or lead generation. Customer service teams may advise about tracking customer satisfaction or return rates.
Every department has something to contribute to strategic workforce planning. Use the knowledge you gather to understand strategic objectives. These objectives should guide your workforce plan when it comes into force.
2. Conduct a workforce supply and demand analysis
Workforce supply and demand analysis assesses the wider business environment, analyzing which skills are in demand and hard to source. The analysis should tell you:
- The skills you possess within your organization
- The type and quantity of skilled workers you’ll need in the future
- Different workforce demand scenarios based on market changes, business growth, and emerging technologies
Tracking workforce supply and demand helps you plan for long-term labor costs and goals. Sound planning gives firms a competitive advantage when critical skills markets start to tighten (which they are sure to do.)
For example, the BLS reports that the US workforce is aging. The number of workers aged 65 and above has risen by 117% in the past 20 years. At the same time, the size of the workforce is flatlining. Armed with that data, planners should expect finding graduate employees will become harder than upskilling older workers.

Combine macro-scale data with sector-specific data to gain perspective. For instance, back in 2023, some sectors experienced unique shortfalls, and some had exceptional potential for AI-based disruption, with McKinsey suggesting that office support and customer service are particularly vulnerable.
3. Perform a skills gap analysis
The next stage in the workforce planning process is analyzing skills gaps which appear when current workforce skills don’t meet an organization’s future workforce needs. When carrying out talent gap analysis, personnel experts should:
- Assess current workforce skills. If necessary, carry out skills assessments to determine the competence of each individual.
- Forecast future workforce requirements based on industry trends. Build long-term career plans based on upskilling to adapt to those trends and proactively handle shortages.
- Create a profile for each worker (often called a skills map) listing their skills and identifying potential areas of improvement.
- Agree on personal development plans with employees, ensuring all training fits the core business strategy.
- Identify roles you can only fill externally. Create skills-based recruitment processes that select candidates with skills to take the company forward.
- Prioritize urgent skill requirements. Meet immediate staffing needs to create a solid foundation and schedule a transition phase before the long-term strategic plan goes into action.

4. Develop and implement a workforce plan
After analyzing gaps in skills, finalize a workforce plan. This plan covers the recruitment needs of the entire organization. It defines specific skills-related objectives and identifies targets for the following:
- Ideal recruitment levels. Run headcount scenarios based on different revenue forecasts or external conditions.
- Training employees. Train current employees based on future skill requirements through projections of skill gaps.
- Developing personnel. Employees should have pathways to improve their skills, take on new responsibilities, and be a part of building the organization.

An effective workforce strategy does more than maintain skill levels. It also makes companies more attractive places to work as potential employees can see routes to advancement through skills improvements and internal mobility opportunities.
As Virgin CEO Richard Branson says, “Train people well enough so they can leave. Treat them well enough, so they don’t want to.” That’s the kind of balance we’re looking for.
5. Monitor, evaluate & revise
From the start, planners should set evaluation criteria to determine whether the strategy works as designed. Tracking employee turnover and job satisfaction demonstrates your talent acquisition strategy is working properly. Ideally, you should see turnover and attrition rates drop and job satisfaction rise.
Other tracking metrics include time and cost-to-hire. Well-planned recruitment efforts should drive both metrics as low as possible. HR teams can also factor in business metrics like revenue per employee or productivity statistics as needed.
The bottom line? Workforce planning should be dynamic and agile, not static. Adapting to the ever-changing economic environment is all-important, especially in the wild, wild world we live in today.
What about the Bs, Cs, and Rs of workforce planning?
The process above sums up a typical workplace planning strategy, but not everyone is process-oriented (and that’s okay!). Without tangling you up in lists, we find the 7 “Rs”, “6 Bs”, and “4 Cs” models help conceptually minded people navigate the business planning process.
The 7 Rs of workforce planning
- Right people: Recruit for skills, experience, values, and culture fit.
- Right skills: Implement skills-based hiring to focus on the exact skills each new hire possesses and how their skills translate into job success.
- Right shape: Optimize organizational structure for communication and decision-making.
- Right size: Use workforce demand forecasting to estimate company growth and scale staffing accordingly, based on factors like seasonality or unpredictable factors like labor supply, disruptive tech, or economic recessions.
- Right time: Align hiring and workforce changes with demand trends and use contingency plans to address specific issues.
- Right place: Use remote-first working models to access global talent and boost your business strategy.
- Right cost: Maximize ROI through efficient hiring, fair wages, and impactful training.
The 6 Bs of workforce planning
The 6 Bs of talent management also guide human capital strategies. Here’s how they work:
- Buy: Bring in or “buy” external talent for skills gaps to meet your business goals.
- Build: Develop existing employees with training and upskilling to raise competencies in line with strategic business needs.
- Borrow: Use freelancers or contractors to address workforce gaps and cover critical roles.
- Bind: Create a retention roadmap, including fair compensation, recognition, and career development opportunities to connect employees to your company culture and mission.
- Bounce: Manage attrition and employee exits smoothly with structured offboarding.
- Boost: Give employees a career “boost” with clear promotion pathways, mentoring, and training to help them step up when needed.
The 4 Cs of workforce planning
Finally, before you check out under the weight of so many lists, we need to run through the 4 Cs of contingent workforce management:
- Cost reduction: Keep recruitment costs low without compromising organizational strategy.
- Continuity: Ensure a steady skills pipeline for fluctuating demands. For example, you may need to scale up your number of employees for short-term events.
- Control: Collect performance and skills data and ensure you have competent employees in every position.
- Compliance: Adhere to labor laws and guarantee employee rights. Non-compliance hurts strategic workforce planning by deterring talented candidates and damaging morale.
Where does succession planning come into play?
Succession planning and strategic workforce planning are closely related but not quite the same.
The main difference is focus. Workforce planning operates at the enterprise level. Planners assess organizational goals and big-picture economic trends. They estimate future workforce needs and consider every role within the organization.
Succession planning targets critical roles, making sure these roles never go unfilled as workers come and go. Succession planning maintains a robust leadership layer within companies and departments — even during transitional periods or economic turbulence.
In the workforce planning arena, it’s important to identify leadership gaps (and the right skills for future leaders). We need to integrate succession into broader skills strategies while dedicating extra time to making or breaking roles.
The consequences of not planning successions eventually tell. Even a few weeks of rudderless leadership leads to project disruptions or compromises compliance processes.
How to build a business case for workforce planning
There’s one more critical angle we haven’t considered: selling strategic workforce planning as an organizational priority.
Human resources experts need to make a strong business case for their strategic roadmap. After all, assessing and managing skills can be disruptive. Some people may need to leave their roles, reskill, or adapt, all of which cost money, so pushback is inevitable.
Here’s how we would make the business case for SWP.
Connect workforce planning to business goals
Stakeholders will only bite when they understand how a workforce planning strategy supplements and strengthens their overall business objectives. This should be the overarching theme of your pitch. Fundamentally, companies can only succeed by putting skills at the heart of their strategy.
Target high-impact metrics
- Stress the cost savings from systematic recruitment instead of ad hoc, reactive hiring.
- Show how skills and financial performance are tightly connected. Convince stakeholders that skills planning is not an optional extra in a world where technology and business needs change by the week.
- Touch on risk mitigation metrics. Planning can mitigate risks related to market shifts or tech integration, positioning your company to handle change.
Leverage data to demonstrate ROI
Return on investment is critical in every business challenge, so it’s important to analyze the costs of implementing strategic workforce planning. Be transparent about your methods, and present these to your stakeholders.
Now, use data-backed insights to show why workforce planning is a good business investment. You might use case studies like the following to present a convincing argument.
- How talent gaps can overwhelm successful companies: Use data to show how quickly companies can lose ground to competitors by failing to upskill and hire dynamic talent. For instance, product ranges offered by eCommerce companies may become outdated compared with agile rivals using AI market analysis tools.
- How poor skills planning leads to workforce turnover: Show how companies that fail to upskill employees eventually experience rising turnover and lower morale. For example, an IT maintenance company may lose talented workers, leading to low-quality customer service and falling sales.
- How companies can miss opportunities by not prioritizing skills: Explain how the pace of technological change presents huge opportunities, but the window to realize these opportunities is narrow. Continuous upskilling positions companies to take these chances while others fail.
These scenarios show the power of linking data with compelling stories. Above all, you need to weave narratives that convince corporate leaders to ditch older methods and embrace strategic planning.
Why you likely need workforce planning tools
Strategic workforce planning feels like a giant task if you start from scratch. But you don’t really need to. HR teams can use workplace planning tools to simplify processes, cover every angle, and save time and money.
Sounds good? Here are four indispensable tools to use in your workforce planning efforts.
Strategic workforce planning map
Strategic workforce planning maps connect workforce management to other strategic business objectives.
Planning maps prompt you to identify organizational needs, such as expanding markets, retaining customers, or building brand awareness. They visualize how workforce planning can contribute to these strategic aims.
The core idea behind strategic workforce planning is aligning HR with organizational goals. Strategic maps detail how roles, skills, and competencies contribute to business aims and include visualizations of current and future workforce needs.
For example, a travel services company may shift its strategic direction from human to AI-powered customer service and re-allocate employees to managing clients or developing destinations. In this case, the strategic map would model ways to add AI skills and retrain the existing workforce.
🧰 Recommended tools: WorkDay offers comprehensive workforce planning software that should get you on the right path.
9-box grid
The 9-box grid assesses employee performance and future potential as part of a future-proof talent strategy. One axis plots low, medium, or high employee potential, and the other plots current performance on a similar scale.
The grid visualizes how to get the most out of every worker in your current or future workforce. Use it during employee evaluations and when allocating the annual training budget.

For instance, a company expects to transition from mainly written to video content production in the next few years. The 9-box grid identifies employees with communication abilities or those with the potential to retrain in videography or metadata management.
The grid also provides a heads-up about timeframes. Existing skills may allow a rapid TikTok rollout or the firm may need longer lead times to develop its strategy.
🧰 Recommended tools: WorkDove offers a 9-box grid tool with easy drag-and-drop manipulation, automation, and integration with talent reviews.
HR dashboards
HR dashboards are software tools that organize and present important HR data. Dashboards let you centralize different recruiting metrics, identify future talent development initiatives, and track large workforces.
The best part: Centralized dashboards deliver up-to-date information about recruitment costs, training levels, and employee engagement. Use the data displayed to make informed decisions without time-intensive, in-depth investigations.
🧰 Recommend tools: Full-cycle recruiting tools tend to feature intuitive HR dashboards. Toggl Hire is great for smart data presentation and organization options.
Scenario planning
Scenario planning is a great way to manage workforce supply. This collaborative technique explores how potential scenarios could affect an organization’s overall business strategy.
Think of it as a gamified, predictive model of metrics like employee performance and composition change. Use it to identify which skills will be needed as the future unfolds.
For instance, scenarios might consider how the workforce planning process can deal with a recession. Or they could workshop the impact of AI on employee skills.
🧰 Recommended tools: WorkDay, Anaplan, and Toggl Hire can model future scenarios, but this tactic is about people working together. Get creative with cross-department teams and in-person workshops. The best way to anticipate future needs is to collaborate and consider everyone’s perspective.
Close skills gaps with Toggl Hire
Workforce planning identifies and closes skill gaps to meet core business objectives. Companies that know their current abilities and assess future staffing needs can ride technological and economic waves without being submerged under the dark waters of change.
But here’s the thing. To assess skills properly, you’ll need the right tools — like Toggl Hire. Our skills test library makes it super simple to discover the abilities of current employees and identify outstanding external talent.
Forget about constantly battling workforce gaps. Be strategic and focus on skills. The only thing you have to lose is stress. The gains? Limitless.
Browse our skills test library now to see what skills-based hiring is all about, or watch this video to learn more about Toggl Hire! If you like what you see, sign up for Toggl Hire to start planning for the future, today.
Elizabeth is an experienced entrepreneur, writer, and content marketer. She has nine years of experience helping grow businesses, including two of her own, and shares Toggl's mission of challenging traditional beliefs about what building a successful business looks like.