The Role of Recruiting in Workforce Planning

by | Sep 21, 2023

Company goals and tight alignment of your workforce is critical to maintaining an agile business. In the face of a fluid labor market, rapidly advancing technologies, and ever-changing consumer behaviors, being able to pivot and keep pace means having a highly coordinated team — one that’s working toward the same mission, and following the same roadmap to get there.

Workforce planning positions your company to achieve and maintain the high level of coordination necessary to achieve your business goals. By helping connect teams, forecast future needs, and proactively fill skills gaps, workforce planning will help you stay agile by effectively shuffling, expanding, and managing your team as needs change. 

What is Workforce Planning? 

Workforce planning serves to align your human resource initiatives with overarching business objectives. It involves forecasting future talent needs, identifying skills gaps, and developing strategies to acquire, develop, and retain the right talent.

The workforce planning process always begins with an in-depth analysis of your organization’s direction, existing workforce, current challenges, and industry trends. The goal is not only to pinpoint areas where specific competencies may be lacking or misplaced but to develop actionable, comprehensive strategies so you’re able to address these issues effectively.

On paper, workforce planning involves stacks of data, reports, and predictions, along with shifting organizational charts that illustrate how you expect your teams to grow. In practice, workforce planning means implementing thoughtful recruiting strategies and training programs, along with various initiatives to ensure your high-value talent remains engaged, motivated, and ready to meet evolving demands as your organization moves forward. When you put all of the pieces together, workforce planning positions your organization for sustainable, long-term scaling with minimal growing pains.

Benefits of Workforce Planning

A survey by the SHRM found that 77% of employees who left their jobs could have been retained with a substantial portion citing a lack of career development opportunities as a “difference maker” in their decision. Employee retention is one of the many challenges that workforce planning can address by enabling a holistic approach to who you hire, how you manage talent, and the development paths you design for employees. 

By reducing employee turnover and optimizing labor costs, workforce planning can also improve efficiencies all around. A case study from Deloitte revealed that a large financial services company was able to save $6 million for every 100 employees after implementing a workforce planning strategy that allowed them to reorganize teams and redeploy excess staff. 

Deloitte also found that taking a reactive approach to filling skills gaps can result in up to 5% high labor and labor-related costs. In contrast, workforce planning enables a proactive approach with accurate labor forecasting and detailed breakdowns that allow organizations to hire the right people at the right moment. 

Altogether, the key benefits of workforce planning include:

  • Improved Quality of Hires: Proactively identifying skill gaps allows your organization to seek out talent ahead of when you need it while providing ample time and context to support your team in hiring the best fit. 
  • Long-Term Outlook: By gaining insight into employee development, training, and promotion paths, workforce planning allows you to take a skills-based approach to hiring and ensure you’re choosing individuals who can make a high impact both now and in the future. 
  • Strategic Alignment: Workforce planning ensures that human capital investments are in the best interest of your organization’s short- and mid-term goals. 
  • Employee Retention: Through careful hiring, management, upskilling — and by nature of having a clear vision for your team — workforce planning helps improve employee satisfaction and retention. 
  • Time and Cost Efficiency: By accurately evaluating upcoming resource needs, workforce planning helps control labor costs, optimize spending, and empower you to fill roles at the right moment. 
  • Innovation: Staying ahead of the latest technologies means continuously adapting processes and relying on a highly skilled team. Effective workforce planning allows organizations to identify specific skills required to fuel innovation as new opportunities arise. 
  • Investor Confidence: Strategic foresight and operational readiness bolster investor confidence. Investors are more inclined to commit resources to organizations that proactively implement processes like workforce planning as it signifies prudent management and the potential for calculated, sustainable growth. 

Strategic workforce planning allows your organization to unlock all of these benefits and more, but it means taking a multifaceted approach to developing a strategy, one that goes beyond simply evaluating your current position and instead leverages data to create a forward-looking plan. 

What are the goals of strategic workforce planning?

The basics of workforce planning focus on finding skills gaps, but when organizations go beyond simple staff audits and begin following a detailed process, the many elements of workforce planning start to come together. Comprehensive workforce planning will evaluate and cover the following:

  • Career Planning: The motives behind career planning is to help your employees set clear career objectives, identify growth opportunities, and align their aspirations with your organization’s needs. When thoughtfully executed, career planning allows employees to take charge of their professional development and can improve engagement, performance, and loyalty. 
  • Training and Multi-Skilling: Investing in training and multi-skilling will prepare your organization to capitalize on emerging opportunities and continuously innovate. By enabling employees to adapt to changing job requirements, training programs enhance competence and confidence while fostering a culture of continuous learning. 
  • Succession Planning: A cornerstone of talent management, succession planning supports seamless knowledge transfer and leadership continuity as your organization grows and your team changes. Beyond employee retirement, succession planning should consider unforeseen departures, starting at the top level, and work backward to nurture a pipeline of capable leaders. 
  • Scenario Planning: In an era of uncertainty, scenario planning equips organizations to navigate unpredictable futures. By considering ideal and alternative future scenarios and developing strategies to respond effectively to each, your organization can become more resilient and better equipped to seize opportunities or mitigate risks.
  • Flexible Working: Planning for flexible schedules, hybrid environments, and remote work arrangements is pivotal in today’s landscape. These initiatives can enhance work-life balance, improve productivity, help you retain top talent, and even help you tap into a wider talent pool, moving beyond those close enough to commute each day. 
  • Role Design: Role design involves clarifying job responsibilities, defining performance expectations, and ensuring roles are meaningful to both your organization and your employees. Effective role design enhances employee motivation, job satisfaction, and overall organizational efficiency. 
  • Outsourcing: Whether temporary or permanent, outsourcing can enhance cost efficiency, improve access to specialized skills, and allow your existing team to focus on core competencies. Effective outsourcing requires a robust understanding of your needs and goals, but outsourcing can vastly improve agility when used properly.

Aligning all of these elements takes time, and it also requires you to involve a handful of stakeholders beyond HR. Following a structured process will help your organization avoid common pitfalls along the way and empower you to make the most of the data and information available to you right now. 

Overview of The Workforce Planning Process

The demand for companies to be agile amidst economic shifts can make workforce planning difficult. Startups, in particular, often struggle to see beyond the next hiring round; but planning provides a sense of vision, purpose, and direction, and it allows you to handle deviations with confidence and intention if unforeseen circumstances arise. 

If you’re feeling overwhelmed by the notion of workforce planning, start by looking a year ahead and plan out from there, aiming for a final draft that looks three to five years out. While it will take time and legwork to develop this forward-looking strategy, following a process like the one outlined below will help you break it down into manageable steps. 

1. Assess Your Current Workforce 

The first phase of workforce planning is focused on information gathering. Lean into historical data to evaluate your organization’s average time-to-hire, employee performance, employee satisfaction, and turnover rate. Take inventory of any and all feedback you’ve received in these areas over the last year. 

To thoroughly review all of the data, begin assembling your stakeholder team of HR professionals, senior executives, departmental managers, finance representatives, data analysts, and external consultants. This diverse group will serve to provide insight and guidance as you start quantifying the skills, competency, and manpower gaps in your existing workforce in a way that aligns with key business goals. From that, you can begin to project future needs. 

According to PWC, 72% of organizations lack confidence in their ability to predict future workforce needs. There is always an element of guesswork involved, but you can limit the uncertainty by leaning on your business plan, data, and market trends. It’s also critical to remember that these projections can (and should) be adjusted as time passes and more data becomes available. 

Predictive analytics — revolving around growth forecasts, retention, time-to-hire, and similar metrics — can help project workforce needs, especially in project-based businesses. For other areas with more variables, like back and middle office functions, a good approach would be to ask each department head to create a forecast that leverages their hands-on knowledge.

Once you have a few reports, combine them with data on finance, marketing, and procurement to create a workable plan. You can then put all of those numbers together to forecast transactional needs (within the next nine months), operational needs (within nine to 24 months), and strategic needs (looking three to five years out). 

By the end of the first phase, you should have:

  • Clear guidelines and criteria regarding the roles you need to fill, dissolve, or create in the near future with adjusted organizational charts showing how your team will evolve through each phase.  
  • Roadmaps to filling existing skills gaps that account for hiring and onboarding time, and prioritize roles based on strategic business objectives. 
  • Training plans and promotional paths for your existing employees, along with loose plans for how you will train, upskill, and promote the employees you intend to obtain over the next year.

2. Evaluate Your Talent Management Strategy

The second phase of workforce planning revolves around maximizing your current resources and laying the foundation to avoid gaps in your future workforce. This means sitting down to evaluate all facets of your talent management strategy. 

Your organization should be looking to optimize its hiring practices and set clear guidelines for talent sourcing, interviewing, and onboarding to ensure you’re taking a skills-based approach to fill roles with an emphasis on cultural alignment. This also means taking strides to accelerate employee integration and finding ways to foster clear, open communication across teams.

Career planning and succession planning should both be a major focus in this stage as you look to Implement a merit-based system to incentivize upskilling and create efficient and transparent internal recruitment strategies. Also, consider internal mobility in this phase by identifying transferable skills and creating paths for employees to explore different roles within your organization. 

With a holistic talent management strategy, your organization can retain valuable talent and reduce dependence on external hires by equipping your organization with an internal talent pipeline capable of adapting to changing needs and demands. 

By the end of this phase, you should have:

  • Internal recruitment strategies that seek to align employees’ skills and aspirations with business goals, creating paths for promotion and lateral moves so you can retain top talent and check the boxes for your succession planning. 
  • Work models that consider the needs and desires of your employees, whether this entails hybrid work options, flexible scheduling, or other accommodations. This is also the phase to re-evaluate policies and benefits, ensuring your workplace standards align with what your top talent wants. 
  • External recruitment guidelines that emphasize a skills-based approach, cultural alignment, and diversity and inclusion initiatives. This may involve reevaluating hiring and onboarding processes and finding a talent sourcing agency to partner with. 

3. Training and Development 

In the early stages of workforce planning, your organization will conduct a thorough analysis to identify specific skills gaps — using surveys, performance evaluations, and discussions with managers. By the third phase, you’ll start putting your strategy in motion by delving into the specifics of your upskilling, career planning, and succession planning initiatives. 

With a new team of stakeholders, the goal of this phase is to create a comprehensive training curriculum that covers technical skills, soft skills, and any specialized knowledge required for certain job roles. This means going deeper still into role design and looking back on all of the reports and forecasts you’ve laid out to ensure each individual’s plan aligns with the organization’s overarching goals. 

By this phase, you should begin to involve employees in the workforce planning process by talking to them about their aspirations, skills, and needs. Someone within your HR department should be assigned to create individualized development plans for each employee, based on their career goals and your organization’s internal and external recruitment plans. 

By the end of this phase, you should have:

  • Individualized development plans for each of your employees, or at least the employees that are on a fast track to promotion or serve a critical role in your organization already. You should also have contingency plans for these same positions. 
  • Repeatable playbooks to develop skill-specific training programs as new technologies and challenges arise in your industry. This will include designating a person or team to identify new skills as they come up on the horizon, developing a curriculum around them, and deploying the programs to your workforce.
  • Curriculum for leadership training programs and similar initiatives that allow employees to achieve their professional development goals and work toward promotions.  

4. Reviewing and Refining

No strategy is complete without metrics and benchmarks in place that allow your team of stakeholders to track the rollout and effectiveness of your workforce planning efforts. These should revolve around employee satisfaction, productivity, and turnover, but you must also include metrics to track program adoption and skills development.

In addition to hard numbers, communication channels should be established to create a feedback loop between employees, leaders, and key stakeholders. Find ways to capture insights, complaints, and suggestions from all parties, especially from leaders who will see first-hand the impact your workforce planning initiatives have on teams. 

In the long term, look to conduct a cost-benefit analysis and evaluate metrics like time-to-value so that you can see the bottom-line impact your workforce planning efforts have. 

  • Metrics and a reporting cadence established, along with all of the necessary channels to collect information and analyze data quickly. 
  • Open communication channels and feedback loops with employees and leaders to further inform your strategy and what can be improved. 
  • Standing stakeholder meetings at least twice a year to check in on the progress, performance, and implementation of your workforce plans.

Challenges in Workforce Planning

To be successful with workforce planning, HR and your organization as a whole must change how it approaches talent management and recruiting. Much of this change should be directly driven by data. But, according to Gartner, only 33% of HR leaders consider their organizations effective at using data in workforce planning. 

Indeed, some of the key challenges that you’ll need to overcome during the workforce planning process revolve around data — getting it, protecting it, integrating it, and using it. Be proactive about addressing data quality and availability concerns, and find ways to supplement the internal data you have at your disposal.

Beyond, prepare for the other common challenges that accompany workforce planning, like technology integration, resistance to change, budget constraints, and skills shortages. At your initial stakeholder meeting, you should discuss these challenges and welcome suggestions on how to avoid and address them. 

Here are 5 Questions to Improve Your Hiring and Workforce Planning Strategies.

The Role of Recruiting Firms in Workforce Planning 

With a systematic approach to workforce planning supported by external experts, you can break an otherwise complex and overwhelming strategy down into a few manageable phases, while keeping stakeholders involved in the process along the way. 

A specialized recruiting firm can aid your organization throughout the workforce planning process by offering:

Specialized Expertise

Recruiting firms have a deep understanding of the specific skills, qualifications, and alignment required to fill roles more effectively than in-house HR teams, which may have broad expertise but often lack the specialized knowledge needed to design and fill niche roles.

Access to Talent Networks

Established recruiting firms have extensive networks of talent and places to find them, including passive candidates who may not be actively seeking new opportunities, but could be well-suited for your open position, and willing to move if a recruiter knows where and how to approach them. In contrast, in-house teams often rely on traditional job boards or may be resource-constrained when it comes to seeking out passive and specialized talent. 

Accelerating Hiring Processes

By leveraging existing networks and resources to identify and vet candidates, recruiting firms are able to streamline the hiring process, reducing metrics like time-to-fill and ultimately ensuring the best fit. On the other hand, internal HR processes are often subject to organizational bureaucracy and resource constraints, prolonging the hiring timeline.

Cost-Effectiveness of Recruiting Firms

While there are fees associated with recruiting firms, the cost is often justified by the time and resources saved in finding high-quality talent quickly. The cost per hire may also be more predictable. Compare this to in-house recruiting, which entails a long list of line items, along with the risk of lost productivity and revenue due to inefficiencies. 

The ROI of in-house recruiting depends on factors like the efficiency of internal processes, the success of hires, and the organization’s ability to meet its workforce needs on time. By delivering top talent promptly, contributing to long-term success, and supporting strategic workforce planning, the ROI of using a recruiting firm can be substantial. 

Why Startups Need Workforce Planning 

Workforce planning helps executives, founders, and high-level leaders align on the direction of the organization and foster vision for employees all the way down to the most entry-level roles. Meanwhile, investors see 3- or 5-year workforce plans as an affirmation of organizational foresight and readiness, and as a measure of market opportunity. 

Whether you’re an early-stage startup or facing a new phase of growth in your company’s development, workforce planning is an invaluable activity — but one that must be supported by a handful of dedicated stakeholders, expert consultants, and reliable datasets. Digital Knack can help the process along by bringing diversity of thought, functional expertise, and tailored recruitment strategies to support your planning. Get in touch with us to learn more about why we’re selected to build 1 out of every 5 early-stage teams. 


Written by Marcia Needels