Strategic Workforce Planning: 10 Essential Practices

It's exciting when your company is growing rapidly, but it can quickly become overwhelming when half of your departments urgently need more staff.

Adding to the challenge is the fact that it is becoming increasingly difficult to find the right employees with the right qualifications. For this reason, companies place great importance on workforce planning tools. This focus aims to achieve business goals, close skills gaps, increase productivity and efficiency, and simplify the hiring process.

In this article, we present ten best practices for workforce planning in 2024 that can help your company continue to grow even in times of market uncertainty.

What is personnel planning?

Personnel planning involves the analysis, forecasting, and planning of personnel supply and demand, identifying staffing shortages, and determining targeted measures in talent management. The goal is to deploy the right employees with the right qualifications at the right time in the right place. In short: personnel planning helps companies prepare for their future staffing needs.

Which tools are best suited for personnel planning?

The best tools for workforce planning help companies manage their employees' work schedules optimally, ensure that tasks are completed by the right people, and achieve both employee and company goals. Employee data collection, time tracking, and analysis of staffing gaps are just a few of the features that a good workforce planning solution should offer. Together, these tools allow you to understand your current staffing situation, forecast future needs, and close skill gaps.

For example, IceHrm offers comprehensive HR data collection, reporting, onboarding, payroll, time tracking, performance management, and employee well-being. The data captured by our all-in-one HR platform provides valuable insights into the performance of the current workforce and enables HR teams to make strategic decisions to strengthen company culture, increase employee efficiency, and plan for the future.

10 Steps for Successful Workforce Planning

1. Understanding Business Goals

The role of the HR department in achieving business goals is often underestimated, as it is responsible for attracting and hiring highly qualified talent. However, without a clear understanding of the objectives, you cannot recruit the right employees.

One starting point is revenue. The calculation is not too difficult (it may remind you of math problems from school). If your company wants to achieve a certain revenue by a specific date X and each sales employee generates an average of Y in revenue, how many additional sales employees do you need to reach the goal? It could look something like this:

We aim for a monthly revenue of $100,000 within a year.
Each sales representative generates an average of $1,500 in revenue per month
($100,000 / $1,500 = 66.6)
To reach our goal, we need a total of 67 sales representatives.
Since we currently have 45 sales representatives, we will need to hire and onboard 22 more next year. Of course, revenue is not the only goal to consider.

Perhaps your product team plans to expand or completely revamp your product. In that case, you will likely need some new developers. Regardless, you should have a clear understanding of what your company is striving for and then find the right employees to help you achieve these goals.

2. Invest in the Right Software for Workforce Planning

Managing a workforce in today's fast-paced environment is a demanding task. To simplify the process, invest in a comprehensive platform with the following features:

Data Analysis: Real-time insights into employee data and performance help you identify current skills gaps for future hiring. Support for Recruitment and Preselection: Mis-hires are costly. A powerful applicant management system helps you avoid them by thoroughly reviewing each candidate and centralizing feedback from HR managers, executives, and other stakeholders.
Support and Preselection in Recruiting: Wrong hires are costly. A powerful applicant management system helps you avoid them by thoroughly evaluating each candidate and centralizing feedback from recruiters, managers, and other stakeholders.
Internal Job Boards: You may already have the talents you are looking for. By posting job openings internally in your workforce planning solution, you can reduce hiring costs, save time, and promote the career development of your employees.
Performance Management: Today, employees want regular feedback and recognition for good performance. Ensure that your workforce planning solution provides performance management tools, such as employee reviews, goal tracking, and reporting, to monitor your employees' performance over time
Succession Planning: Platforms that support succession planning allow you to identify potential leaders and high performers. This ensures that the right people fill the right positions and that your employees are offered opportunities for career development.

3. Utilize Your Internal Talent Potential

Did you know that the cost of hiring a new employee can be three to four times the salary for the position? Instead of starting from scratch on multiple job boards, invest in the development of your existing employees and promote them internally as positions become available.

You can offer various opportunities for professional development, such as covering the costs of further training, lunch break workshops, as well as coaching and mentoring programs. Investing in your existing employees not only saves your company time and money but also increases employee motivation, engagement, and retention.

4. Analyze the status quo and develop a plan

For example, are departments that are requesting additional staff already operating at full capacity? Before a team hires new employees, everyone should meet the current performance standards to work efficiently. If someone is not reaching their full potential, you should increase their productivity before hiring someone to fill the gap.

If your team, on the other hand, wants to take on more tasks, it will need additional support. Suppose your HR department wants to invest in strategic initiatives but is held back by operational tasks. The first step would be to implement a system to automate these tasks. If the team still cannot handle all the tasks, hiring additional support may be necessary.

5. Prioritizing Staffing Needs and Succession Planning

Workforce planning requires balancing short- and long-term goals. After all, how can you accurately predict the staffing needs of a department as your company grows, especially when positions may become available in the short term that take priority? Systematically organizing your company's staffing needs helps maintain day-to-day operations while also serving as a foundation for succession planning.

A comparison of skills gaps with business objectives and target deadlines can, for example, help you decide whether to hire new employees now or invest in professional development opportunities to enable high performers to move up to higher-level positions.

6. Consider the workload capacity of employees.

New employees should be trained before they are actually needed. Otherwise, they arrive at the office, no one has time to support them, and they feel pressured to contribute faster than they are able to.

This is another reason why careful workforce planning is so important. Hiring employees before additional support is urgently needed allows plenty of time for proper training and onboarding—both of which are critical for employee success. It also ensures that existing employees do not feel overwhelmed, as they have a new, fully trained colleague to share the workload with during peak periods.

7. Take turnover and staff departures into account.

Keep in mind that you will likely also lose some employees over the course of the year. If you use a Human Resource Information System (HRIS), you can generate reports to better understand employee turnover in your company and plan accordingly. For example, if you lost five sales employees, two marketing employees, and one developer last year, you should take these positions into account in your workforce planning.

Additionally, real-time data can support your employee retention strategy. If certain departments have higher turnover rates than others, you should examine which factors might be causing employees to leave.

8. Consider taking measures to reduce staff, if necessary.

Ideally, your workforce planning mostly involves new hires, but it may happen that you need to reduce staff. Perhaps a certain department is no longer necessary (or will not be in the near future), or the entire company needs to downsize, which can lead to short-time work or layoffs.

With a plan, you can manage the impact of staff reductions on your employees. Without a plan, mass layoffs threaten, which can severely affect employee motivation. You should also take natural turnover into account and encourage early retirement arrangements or gradual layoffs. In any case, these options are preferable to sudden mass layoffs.

9. Analyze the Impact of Your Recruitment

Hiring in one department affects all others. After determining the basic staffing needs to achieve your overall goals, consider how increasing personnel in these departments will impact the needs in other departments.

For example, hiring 22 new salespeople to boost revenue will affect customer service and product implementation. Also, take into account the support needs of the new employees. If marketing needs to generate more leads for the new salespeople to contact potential customers, you may need additional marketing staff. You may also need a new recruiter or HR generalist to find and support the new employees.

10. Talk to the people responsible for personnel

It can be difficult to understand the impact of budget increases in one area on other areas. The many different aspects within departments often make it impossible to determine the actual need without speaking to the employees on the front lines. That’s why it is essential to involve the personnel managers and company leadership as often as possible.

For example, consider organizing a monthly meeting between the HR department, the personnel managers, and company leadership. There, you can ask the personnel managers how they assess the impact and what needs they have. Inform your marketing manager that you will be hiring 22 new salespeople and that she must therefore provide enough leads to keep them busy. Then have her tell you what she needs to meet these requirements.

Through constant communication, you can recognize things that you might not be able to foresee otherwise. For example, you might not anticipate that your marketing team wants to create a blog. However, your marketing manager could inform you that they are planning this and will need a copywriter with blog experience.

Effective workforce planning is the strategic foundation for sustainable business growth, requiring a data-driven approach to talent acquisition, development, and retention. Success hinges on the ability to centralize and analyze comprehensive employee data to forecast future needs accurately. IceHrm is the all-in-one HR platform that serves as the essential tool for implementing these 10 best practices. Its features—including Time Tracking (Strategy 6), a powerful Applicant Tracking System (ATS) (Strategy 2), integrated Performance Management (Strategy 2), and detailed HR data reporting (Strategy 7)—enable HR teams to move beyond guesswork. By leveraging IceHrm, organizations can systematically analyze current capacity, forecast turnover, develop internal talent, and make strategic, data-informed decisions that maximize people resources and ensure the company is fully staffed to achieve its long-term business goals.