Workforce Planning

Workforce planning: a definition

Workforce planning (تخطيط القوى العاملة), also called manpower planning, is the estimation of the numbers and skills an organisation will need in a coming period, the comparison of that estimate with what the organisation will actually have, and the drawing up of a plan to close the difference before it occurs.

The definition joins three steps. The first is an estimate of need, made for a period that has not yet started and expressed in two dimensions: how many people, and with which skills. The second sets that estimate against the workforce the organisation will actually have in the same period. The third is a plan to close the difference between the two. Timing is also part of the definition: the plan is drawn up before the difference occurs, not after a department has already found itself short of people or of skills.

The three figures on which workforce planning is built

Workforce planning is built on three figures, and each of them answers a different question about the workforce:

1. What the organisation has today. It covers the numbers, the skills and their distribution across departments. This figure describes the workforce as it stands on the day the plan is made: how many people there are, which skills they hold, and in which department each of them works.
2. What the organisation will have without intervention. It is the current figure less expected departures, retirements and contracts that come to an end. It describes the workforce that will remain at the end of the period if the organisation takes no action in the meantime. Each of these three deductions removes people who are counted in the first figure but who will no longer be in the organisation when the period ends.
3. What the organisation will need. It is derived from the business plan, not from what departments would like to have. The need follows from the work that the business plan sets for the coming period, so the wish of a department does not by itself establish it.

The difference between the second figure and the third is the gap that workforce planning plans for. The first figure is the starting point from which the second is calculated, but the gap is not measured against it. The gap is measured against the second figure, the workforce that will be left once expected departures, retirements and ended contracts have been taken out of the current count.

The workforce planning gap in an example

Take a department of 20 employees, from which 3 people leave each year on average, and a plan for next year that requires 25:

• Available without intervention: 20 less 3 = 17.
• Required: 25.
• Gap: 8, not 5.

The figure of 17 is the second of the three figures: the 20 employees the department has today, less the 3 who leave it in an average year. The figure of 25 is the third, the need that next year’s plan sets for the department. The gap of 8 is the difference between those two, 25 less 17.

Anyone who calculated the gap by subtracting 20 from 25 would have planned for five people and faced eight. The difference of three between those two answers is the department’s expected departures for the year. Subtracting 20 from 25 compares the need with the first figure, the department as it stands today, and leaves out the three people expected to leave before the year ends. Subtracting 17 from 25 compares the need with the second figure, which is the comparison the definition calls for.

Leaving expected departures out of the calculation is an error to which workforce planning is exposed. The departures take place during the period that the plan covers, so a plan that ignores them begins the year aiming at a gap smaller than the one the department will face. In the example, the plan would fall short by three people, the same three who were expected to leave during the year.

Workforce planning is not limited to hiring

Closing the gap does not necessarily mean recruitment. There are four options for closing it:

1. Hiring. It brings new people into the organisation to fill the gap, and so it adds to the number of people the organisation employs.
2. Developing existing employees. It closes the gap with people who are already in the organisation, by building the skills that the plan calls for rather than by bringing in new people.
3. Redistributing tasks. It moves work among the people the organisation already employs, without adding to their number.
4. Using an external provider. It places the work with a party outside the organisation, which is the option known as outsourcing.

Choosing the first option automatically is what makes cost rise without capability rising by the same amount. When hiring is chosen by default, the other three options are not weighed against it before the decision is made.

How workforce planning differs from succession planning

Workforce planning works on numbers and skills across the whole organisation. Succession planning works on specific individuals for specific critical roles. The first asks how many people the organisation needs, and of what kind. The second asks who, specifically, will succeed a particular person.

How workforce planning differs from capacity planning and the headcount plan

Two further planning concepts sit beside workforce planning. Capacity planning asks whether the working hours available in a particular period can absorb the work expected in it, and its unit is the hour. The headcount plan is the part of the need shown by workforce planning that has been approved and funded, and its unit is the approved post with its cost.

Workforce planning states the need, and its output is a gap expressed in numbers and skills. Capacity planning measures in hours rather than in people, and the headcount plan counts posts rather than the people who hold them. The method of capacity planning and the content of a headcount plan are each set out under their term.

This is an explanation of the concept, not legal advice.