Workforce Planning: How to Build a Workforce Strategy That Actually Helps You Make Decisions

Workforce planning becomes useful when it answers a fairly simple business question: who will you need to deliver the plan you are making now, and what needs to change before you get there?

We often see growing businesses answer that question much later than they intend to.

The commercial plan says revenue will grow. A new service is being launched. One team is expected to double. A senior person is carrying knowledge nobody else has. Three managers are already stretched. Recruitment begins because somebody finally says, "we need more people".

That is resourcing.

Workforce planning starts earlier.

The CIPD describes workforce planning as balancing the supply of skills you already have against the people and skills the organisation will need in future. It involves understanding the current workforce, determining future requirements, identifying the gap between the two, then deciding what action will close it.

We think that distinction matters particularly in founder-led businesses.

You do not need a 40-page workforce plan. You do need enough visibility to know where growth depends on one person, where capability will become a constraint, what you should recruit externally, what you can develop internally, and which roles may not need to exist in the same form two years from now.

That is strategic workforce planning in practical terms.

What is workforce planning?

Workforce planning connects your business plan to the people needed to deliver it.

The CIPD defines it around having the right number of people, with the right skills, in the right place, at the right time, at the right cost and on the right contractual basis. It can cover immediate operational requirements or longer-term questions about talent, capability and organisational structure.

The important bit is that it begins with the organisation.

Not HR.

If your business strategy says you will enter two new markets, automate part of your service, reduce reliance on one client and build a stronger management layer, your workforce strategy should explain the people implications of those decisions.

You might need fewer people doing one type of work.

You might need completely different skills elsewhere.

You might need to promote people who are excellent technically but have never managed anybody.

You may discover that the person you assumed would lead the next phase does not want the role.

Those are business questions with people consequences.

Workforce planning is not a headcount spreadsheet

Headcount matters.

It is just not the whole answer.

The CIPD distinguishes between the numerical side of workforce planning and the more strategic side. The first asks how many people and skills will be required. The second places that information inside the organisation's strategy so leaders can consider different possibilities before circumstances force a decision.

We see the difference quite clearly when working with growing businesses.

A numerical workforce plan might say: "We have 62 people now and expect to have 80 by next year."

A useful workforce plan asks: Where are those additional 18 people actually needed? What work will they be doing? Which existing roles will change? Which skills can we build internally? Which roles are business-critical? What happens if the person currently holding one of those roles leaves? Which assumptions in the growth plan rely on recruitment that may be difficult?

That gives the leadership team something they can act on.

Why does workforce planning matter for growing businesses?

Because growth often exposes people problems that were manageable at a smaller size.

In a business of 30 people, a founder can still be across most important decisions. By the time the business reaches 100, that same level of involvement can start slowing things down rather than helping them.

The issue is not simply headcount. It is that complexity increases.

Complexity increases. More managers, more specialist roles, more dependencies, and knowledge that once sat with the founder now sitting inside individuals rather than shared systems.

The CIPD says workforce planning can help organisations identify inefficiencies, respond to changing customer needs, improve retention, support productivity and direct people development towards the skills the organisation will actually require. The outputs can influence organisational design, recruitment, succession planning, career development, learning and reward.

That is why we see workforce planning as much more than a recruitment exercise.

Recruitment is one response to a gap.

It is not the only one.

What is the difference between a workforce strategy and a workforce plan?

A workforce strategy sets the direction. A workforce plan turns that direction into specific actions, owners and timescales.

Suppose the business expects to grow its client base significantly over the next three years.

The workforce strategy might conclude that the organisation needs stronger middle management, more commercial capability, less dependence on senior specialists, better internal progression and greater use of technology in administrative work.

The workforce plan then translates that into decisions: identify five roles where succession risk is highest; recruit a commercial lead by Q2; create manager development for six new managers; redesign two operational roles after introducing new technology; create progression criteria for specialist employees; review the plan every six months.

Strategy tells you where the workforce needs to move.

The plan tells you what happens next.

We find businesses often have one without the other.

Some have an excellent strategic conversation and no execution.

Others have a spreadsheet full of recruitment dates without any explanation of why those roles matter.

You need both.

What does strategic workforce planning involve?

The CIPD's strategic workforce planning guidance uses a six-stage framework: establish a baseline, assess workforce supply, analyse workforce demand, identify the gap, create an action plan, then deliver and review the plan.

We like the sequence because it prevents businesses jumping directly to hiring.

1. Start with the business plan

Before looking at people data, understand what the organisation is trying to do.

Ask: What are the three most important commercial priorities over the next one to three years? Which products, services or markets are growing? What is likely to shrink? Where will technology change how work gets done? What work should the business stop doing? What customer expectations are changing? Where does the leadership team expect productivity to improve?

The CIPD is explicit that workforce planning should flow from organisational strategy and form part of the wider business planning process.

Without that link, workforce planning becomes an HR exercise nobody else feels responsible for.

2. Understand the workforce you have now

Most organisations know how many people they employ.

Fewer can quickly tell you which skills are concentrated in one person, which roles are difficult to replace, where strong successors exist, which teams have repeated retention problems, where managers are carrying too many direct reports, which employees have skills the organisation is not using, or how many critical roles rely on somebody likely to leave in the next few years.

The CIPD recommends analysing skills, knowledge, abilities, talent profiles, turnover patterns, employee sentiment, geographical differences and contractual arrangements when assessing the current workforce.

You do not need sophisticated software to begin. For an SME, a leadership team with reliable data and honest discussion can get a long way.

3. Work out what you will need

This is the part people often find hardest because there is no perfect answer.

You are making assumptions about the future.

That is fine.

Workforce planning is not fortune telling.

The CIPD recommends identifying future skills and capabilities and using scenarios where different versions of the future could materially change people requirements.

Imagine you run a 70-person professional services business. Your three-year plan assumes significant growth. You could build three simple scenarios: growth happens as planned; technology reduces some delivery work; growth is slower. The aim is not to guess which future is exactly right. It is to understand which workforce decisions remain sensible across more than one version of it.

How do you identify workforce gaps?

Compare the workforce you have with the workforce the business will need.

The gap might be numbers, skills, leadership, structure, capacity, location or employment model.

The CIPD notes that workforce gaps can be addressed by building skills internally, recruiting them, retaining them or borrowing capability through outsourcing.

That is much more useful than assuming every gap creates a vacancy.

Why succession planning belongs inside workforce planning

Succession planning addresses one particular risk inside the wider workforce plan: what happens when somebody in a business-critical role moves on?

The CIPD defines succession planning as identifying and developing talent to fill leadership and other critical positions in future. Its purpose is to make sure key roles can still be filled effectively when somebody leaves or moves elsewhere in the organisation.

We think smaller businesses sometimes interpret succession planning too narrowly.

They picture a chief executive with two names underneath them.

Real succession risk is often somewhere else: the finance director who understands every covenant and banking relationship; the relationship lead who owns three major client accounts; the operations person who knows how the entire delivery process really works; the technical specialist clients ask for by name; or the founder who still approves every senior hire.

The job title is not what makes the role critical. The consequence of losing the capability is.

What should you ask about each critical role?

• If this person left next month, what would stop working?

• Who could cover the role tomorrow?

• Who could realistically grow into it within 12 to 24 months?

• What development would that person need?

• If nobody internally is credible, how long would external recruitment take?

The answers usually reveal more than a traditional succession chart.

Case study: Telefónica and succession planning

Telefónica's approach to succession planning has been documented as a case study in Human Resource Management International Digest. The case describes work to move succession planning towards a model that reflected current workforce realities while also preparing for future talent requirements, rather than treating succession as a static list of replacements.

The principle is useful for smaller organisations too.

A successor should not simply be the person who looks most like the current role-holder.

The job itself may change.

If a commercial director's role will involve far more international growth, technology or partnership work in three years, preparing somebody to inherit today's job description misses the point.

Succession planning should prepare people for the role the business is going to need.

Should SMEs really plan three to five years ahead?

Strategic workforce planning often uses a three-to-five-year horizon, but smaller businesses do not need false precision.

The CIPD's strategic guidance uses that longer timeframe because workforce capability cannot always be created quickly.

We would still plan at more than one horizon.

The next 12 months: recruitment, immediate succession risks, manager capacity, existing vacancies and known organisational changes.

Years two and three: capabilities becoming important, future leaders needing development, structure changes and work that may disappear or grow.

Beyond three years: technology, new markets, leadership succession and changes in customer behaviour.

You do not need accurate headcount numbers for 2030. You need enough foresight to avoid discovering in 2029 that the capability takes three years to develop.

How should workforce planning account for technology and AI?

Start with the work, not the tool.

We see businesses ask: How many roles will AI remove? We think that is usually too blunt a question.

A better sequence is: What work is being done now? Which tasks are likely to change? Which parts can technology perform? Which parts still require judgement, relationships or accountability? What new skills will people need? Does the role still make sense in its current form?

The CIPD explicitly includes future technology and changes to organisational processes among the factors organisations should consider when planning future workforce requirements. It also notes that future roles are likely to require stronger technological and digital capability.

That means technology belongs inside workforce planning before somebody buys the software.

If the technology changes the work, it changes the workforce.

What role should managers play in workforce planning?

A large one.

The people team can provide data, structure, and challenge. Managers know where the work actually happens.

They know which roles are overloaded, which skills are difficult to find, who is developing quickly, where client demand is changing, which employees would be difficult to replace, and what the team keeps doing manually that should probably stop.

The CIPD stresses that workforce planning should involve stakeholders across the organisation and that managers need support to interpret data and act on the resulting plan.

We would not ask managers: What headcount do you need next year? That tends to produce a wishlist.

Ask instead: What work needs doing next year that your team cannot do today? What capability are you most dependent on? What would stop you delivering the business plan? Who could take on more responsibility? What work should no longer sit in your team?

The quality of the answers changes considerably.

What commonly goes wrong with strategic workforce planning?

The first problem is beginning with the organisation chart. The chart tells you where people sit now. It does not tell you what the business will need.

Another problem is that every gap becomes recruitment. Hiring is visible, so it becomes the default answer. But a workforce gap might be solved by development, promotion, role redesign, technology, changing responsibilities, outsourcing, retention or stopping unnecessary work.

Succession can also become little more than naming somebody. Putting someone's name underneath a senior role is not a succession plan. Have they been told? Do they want it? Are they ready? What development are they getting? Would they be suitable for the future version of the role?

The plan can also ignore cost. A workforce plan cannot sit separately from financial planning. If the business strategy assumes 30 per cent growth but the only workforce model capable of delivering it destroys margin, the strategy has a problem.

Finally, the organisation plans once. Workforce planning is iterative. We would rather see a six-page workforce plan reviewed every quarter than a beautiful 50-page deck opened once a year.

What does a good workforce plan include?

A useful workforce plan can be surprisingly simple. For each important business priority, capture the commercial implication, current position, gap, action, owner and timing.

• Grow new service line. Workforce implication: more specialist capability. Current position: one senior specialist. Gap: high key-person risk. Action: develop a deputy and recruit. Owner: Director. Timing: Q1-Q3.

• Reduce founder dependency. Workforce implication: stronger management layer. Current position: six inexperienced managers. Gap: capability gap. Action: manager development programme. Owner: People lead. Timing: Q2.

• Improve automation. Workforce implication: different operational skills. Current position: roles designed around manual processes. Gap: skills and job design gap. Action: redesign roles and train the team. Owner: COO. Timing: Q2-Q4.

• Protect major accounts. Workforce implication: succession for account leadership. Current position: two relationships held by one director. Gap: succession risk. Action: broaden client ownership. Owner: MD. Timing: Immediate.

The document is not the point. The decisions are. If nobody refers to the workforce plan during budgeting, recruitment, promotion or organisational design discussions, it is probably sitting too far away from the business.

Case study: strategic workforce planning in Scottish Police Authority Forensic Services

A 2026 Skills for Justice case study shows what a more formal strategic workforce planning exercise can look like.

Working with Scottish Police Authority Forensic Services, the project brought together demand forecasting, workforce supply analysis, career pathways, retirement profiles and succession risk. The resulting workforce plan gave the organisation five-year visibility of future workforce pressures and connected workforce planning to recruitment and financial planning.

The scale is obviously different from most JourneyHR clients. The underlying approach is not.

The interesting part is not that they produced forecasts. It is that they connected demand, cost, recruitment, retirement and succession.

That is what a workforce plan should do. It should help leadership see the relationship between decisions rather than manage each one in isolation.

Case study: Essex County Council and recruitment strategy

Essex County Council's recruitment transformation is another useful example of workforce planning influencing a specific people decision.

The council moved from outsourced recruitment towards an internal resourcing function, supported by recruitment technology, a clearer employer proposition and an Entry to Work team. The Local Government Association reports that the programme increased direct hiring, reduced temporary staffing costs and improved the council's strategic workforce planning capability.

Again, this is a large organisation. But the thinking applies to smaller companies.

If your workforce plan shows that you will repeatedly recruit the same skills for the next three years, the answer may not be: use another recruiter each time.

It may be: build the capability to attract this talent ourselves.

Workforce planning changes the question from how do we fill this vacancy to what resourcing capability will the business repeatedly need?

A practical workforce planning checklist

If you are building a workforce plan for the first time, we would work through these questions.

Business direction

• What are the organisation's three main priorities?

• What will grow?

• What will shrink?

• What is likely to change how work gets done?

Current workforce

• What capabilities do we have?

• Where are the strongest people?

• Which roles are difficult to replace?

• Where are we heavily dependent on individuals?

• Where is turnover creating repeated problems?

• Which managers are already stretched?

Future demand

• What work will need doing in one, two and three years?

• Which skills will matter more?

• Which existing roles will change?

• Which roles might disappear?

• What leadership capability will growth require?

Gap analysis

• What do we lack?

• Can we build it internally?

• Should we recruit?

• Could we borrow the expertise externally?

• Does the structure itself need changing?

Succession planning

• Which roles are business-critical?

• Who could cover immediately?

• Who could become ready?

• What development is required?

• Where do we have no credible successor?

Delivery

• What are the five most important actions?

• Who owns each?

• What will they cost?

• When will they happen?

• What would tell us the plan needs changing?

That is enough to begin.

How JourneyHR can help

Workforce planning often becomes difficult at the point where the conversation moves from the business plan to real people.

You can see where the company wants to go. The harder questions are what that means for the structure, which capabilities you already have, where you are exposed, who could grow into a larger role and where external recruitment is genuinely necessary.

We work with leadership teams on exactly those questions.

JourneyHR's work across People Strategy, organisational design, talent mapping, succession planning, career development and competency frameworks means we can look at the workforce as one connected system rather than a series of separate HR projects.

The output might be a workforce plan, a new organisational structure, or the discovery that the business does not need the six hires it thought it needed but does need two stronger managers and a clearer succession plan.

That is why we start with the business question.

If you are planning your next phase of growth and want to understand what it means for your workforce, we can work through it with you.

Get in touch: JourneyHR contact page

Related support: JourneyHR succession planning and JourneyHR People Strategy support

Final thought

A workforce plan is useful when it changes a decision.

The plan lets you act earlier than you otherwise would. Developing someone before the gap opens. Recruiting before the urgency arrives. Stopping a hire for a role technology will reshape. Recognising that one person's departure carries more risk than anyone had acknowledged.

That is the point.

We would start with the business plan, look honestly at the people you have, and work out where the gap is before circumstances make the decision for you.

FAQs

What is workforce planning?

Workforce planning is the process of understanding the people and skills your organisation has now, comparing them with what the business will need in future, identifying the gaps and deciding how to close them. The CIPD says it should connect directly to organisational strategy and consider numbers, skills, timing, location, cost and employment arrangements rather than focusing on headcount alone.

What is the difference between workforce planning and strategic workforce planning?

Workforce planning can cover immediate operational requirements, such as having enough people for a project or seasonal demand. Strategic workforce planning looks further ahead and connects future business goals with the capabilities, structure and talent the organisation will need to deliver them. CIPD guidance commonly uses a three-to-five-year horizon for strategic workforce planning, while recognising that organisations need to adapt their approach to their circumstances.

What should be included in a workforce plan?

A workforce plan should identify business priorities, the current workforce and skills available, future people and capability requirements, gaps between the two and specific actions to address them. Those actions might include recruitment, development, succession planning, job redesign, retention activity, organisational change or use of external expertise. Each action should have an owner, timeframe and a way to review whether it is working.

How does succession planning fit into workforce planning?

Succession planning focuses on making sure business-critical roles can be filled when someone leaves or moves into another position. It sits within wider workforce planning because future workforce needs depend not only on how many people are required, but also on whether the organisation has enough leadership and specialist capability ready to step up. Effective succession planning therefore involves identifying critical roles, assessing potential successors and developing people before the vacancy appears.

How often should an SME review its workforce plan?

There is no single required timetable, but workforce planning should be treated as an ongoing business process rather than an annual document. The CIPD recommends monitoring actions, retaining workforce information over time and feeding what the organisation learns back into the plan. For a growing SME, we would normally review the main workforce assumptions quarterly and carry out a fuller review whenever the business strategy, organisational structure or commercial outlook changes materially.