Home > Articles > Professional Certifications

This chapter is from the book

Workforce Planning

Objective: Gain an Understanding of Workforce Planning

The SPHR must lead an organization through the process of determining how many employees the organization needs and the characteristics that those employees should have to facilitate the accomplishment of organizational. Workforce planning is the process of determining how to staff the organization with the right employees at the right time and in the right place. As discussed in Chapter 2, workforce planning is increasingly indistinguishable from organizational strategic planning in those organizations where human capital is the critical factor in organizational success. For the purposes of discussion and explanation in this section, it is assumed that organization has completed its strategic-planning process and determined its strategic goals and objectives.

The purpose of workforce planning then becomes to determine the characteristics needed in the organization’s workforce to facilitate achievement of those objectives. In this scenario, workforce planning is strategic planning at the HR level and involves similar processes, including a SWOT analysis, which occurs at the organizational level. In simplistic terms, the HR function, under the leadership of the SPHR, must determine the numbers and types of employees needed and evaluate the availability of both internal and external individuals having the correct characteristics. Based on these analyses, a determination can be made as to the proper HR programmatic activities required to achieve the correct workforce composition. Workforce planning then involves three stages: forecasting workforce needs, determining internal and external supply of employees, and developing appropriate strategies to achieve forecasted needs in relationship to projected supply. These three processes are discussed in the following sections.

Forecasting Workforce Needs

The organization’s strategic plan and allied business plan provide guidance as to the number and type of employees that the organization needs during the planning period. Expansion, retrenchment, new products or services, introduction of new technology, entrance of new competitors in the market, economic conditions, employee retirements, workforce turnover, and so forth must be considered when forecasting workforce needs. Forecasting is the process of using both historical data and predicted scenarios to determine workforce needs during a stated planning period. Following is a discussion of several forecasting methods that are often used.

Trend Analysis

Trend analysis involves studying historical organizational employment levels to predict future employment levels. For example: If, on average, employment levels in the organization have increase 5% per year, it might be logical to forecast a 5% increase for the next planning period. A more accurate forecast using this method might be to evaluate trends in separate departments or other organizational subentities and then aggregate the increases (or, potentially, decreases) at the organizational level. Doing so provides more specificity as to not only the numbers of employees but also the types of employees needed.

Trend analysis assumes that history will repeat itself. In today’s more volatile times that might not be the case. However, trend analysis provides some data on which a final forecast can be made.

Ratio Analysis

Ratio analysis is a forecasting technique that assumes a set relationship between one variable and another, and that the relationship allows for the prediction of workforce needs. Assuming no increases in productivity, an organization might be able to predict total workforce requirements based on predicted total sales or total productivity. For example: If, historically, it takes five employees for each 100,000 unit of product produced, a projected increase of 1,000,000 units per year will require an additional 50 employees.

Organizations often have standard staffing tables that can be used in ratio analysis. As an example, a restaurant chain would know how many servers, cooks, managers, and so forth are needed to staff a restaurant. Based on a projected expansion in terms of number of restaurants, increase in workforce needs can be forecast.


Analysis of historical turnover—in reality a type of trend analysis—provides additional data for forecasts. Average turnover rates provide an indication of the number of new employees required just to maintain current employment levels. Obviously, turnover is affected by many environmental factors, most notably unemployment rates, so other variables must be considered when using these data for forecasting.

Nominal Group Technique

The nominal group technique is a group-forecasting and decision-making method that requires each member of the group to make an independent forecast prior to discussion of any forecasts. Members of the group meet and independently develop a forecast. Each member must present his or her forecast before any of the forecasts are discussed. After all presentations are made and clarifying questions addressed, the group works to come up with a final forecast.

Delphi Technique

The Delphi technique is another group forecasting method in which experts independently develop forecasts that are shared with each other, but in this approach the experts never actually meet. Each of the members refines his or her forecasts until a group consensus is reached.

Managerial Judgment

Managers and executives are asked, based on their experience and knowledge, to develop forecasts. Forecasts, like budgets, can be a top-level overall estimate or a bottom-up aggregation of multiple departmental estimates. Top-level forecasts provide a gross indicator of needed employment levels, but do not indicate where those employees should be allocated in the organization. Bottom-up forecasts, provided by managers in the various departments, provide a better idea of allocation of the workforce and the types of employees that are needed. However, bottom-up forecasts tend to overestimate workforce needs as each manager tries to increase staff size.

Statistical Forecasts

Statistical analysis was discussed in Chapter 2 in the section on research. Various statistical procedures, including regression analyses, can be used to develop forecasts based on scenarios or theorized relationships between variables.

Computer Modeling

Many organizations use sophisticated forecasting software. This permits the organizations to evaluate workforce needs under various scenarios.

Multiple Methods

In the final analysis, no single forecasting method is likely to be accurate every time. Most organizations use multiple methods to develop different forecasts. Ultimately, it is likely to be a top-level manager, using intuition based on accumulated knowledge and years of experience, that makes the final determination of the most likely forecast.

Determining Internal and External Supply of Employees

Not only must the demand for employees be determined, but workforce planning must include an analysis of the potential supply. Forecasts must be made of the supply of candidates for jobs within the organization and the supply external to the organization in the relevant labor market. Methods of forecasting supply, internally and externally, are discussed in the following section.

Internal Supply

The internal supply of candidates can be determined using a number of methods, such as replacement charts, succession plans, human resource management information systems, and departmental estimates. A brief discussion of each of these methods follows.

Replacement Charts

Replacement charts are manual or automated records indicating which employees are currently ready for promotion to a specific position. If needs are forecasted for a particular job, replacement charts provide data with which to determine the supply of internal candidates to fill the openings.

Succession Planning

The concept of succession planning is similar to replacement charting except the time perspective is different. Succession planning is the process of identifying candidates for future openings. It is a longer-term plan for developing candidates to fill positions. Traditionally, succession planning has been reserved for only high-level positions. However, because of the increased importance of human capital in many organizations, succession plans are being developed for the orderly replacement of lower-level employees.

Human Resource Management Information Systems

Many human resource management information systems frequently contain data on qualifications or skills of current employees. After workforce demand is forecast, the database can be queried regarding the supply of potential internal candidates that possess the necessary qualifications or skills.

Departmental Estimates

Organizations are not static. Most organizations and their component departments experience constant flows of employees both in and out. Analysis of this movement provides valuable information to forecast internal supply. Table 3.4 provides the formula used to forecast internal supply within a particular department in the organization and common sources of employee movement in and out.

Table 3.4 Estimated Internal Labor Supply for a Department

Current Staffing Level – Outflows + Inflows = Internal Supply



Transfers from other departments


Hires from the external labor market


Recalls from layoffs


Returns from leaves of absence and sabbaticals

Promotions to other departments


Transfers to other departments



External Supply

There is a huge amount of information available to assist in the forecasting external supplies of labor. State and local economic and workforce development agencies typically can provide data on the labor supply availability. The United States Department of Labor (http://www.dol.gov/) has data available for virtually any location and publishes annual forecasts of labor supply by occupation, and the Bureau of Labor Statistics (http://www.bls.gov/) provides a wide variety of labor force information that is available online. In addition, various professional organizations regularly analyze labor availability within their respective professions. The availability of external candidates is affected by

  • Economic conditions
  • Unemployment rates
  • College and high school graduation rates in the relevant labor market
  • Net migration in or out of the area
  • Relative skill levels of potential candidates in the labor market
  • Competition for labor in the labor market
  • Changes in the skill requirements of the organization’s potential job openings

You should be familiar with the various methods of forecasting both demand for and supply of employees and candidates.

Determination of Strategies

The analysis of demand and supply for labor leads the SPHR to develop appropriate strategies to achieve the planned level of employment. The result of the analysis can result in one of three conditions:

  • Equality In which case the strategy becomes one of retaining current employees
  • Insufficient number of employees In which case the strategy becomes recruitment
  • Too many employees In which case the strategy becomes decruitment

Retention of employees involves strategies designed to maintain or improve job satisfaction and organizational commitment. They are discussed throughout this entire book as they apply to a particular program area. For example, retention strategies involve creating pay equity and providing desired benefits when compensation and benefits strategies are being developed. Both recruitment and decruitment (organizational exit) are discussed later in this chapter.

It would be very similar if the analysis reveals that only one of the conditions from the preceding list exists. However, that is not often the case and the SPHR frequently finds that some departments are currently staffed appropriately for future needs during the planning period, whereas some departments have too many employees and others too few. Thus, strategies of recruitment, decruitment, and retention must be developed simultaneously and interdependently because the recruitment objectives of one department can often serve to fulfill the decruitment objectives of another.

The diagram in Figure 3.1 is often referred to as a yield funnel. It provides a basis for understanding two major programmatic activities that are discussed later in this chapter: recruitment and selection. Assuming that an expansion of the workforce is required, strategy determination is affected by the forecasts of yield rates and the timeframes required for each step in the recruitment and selection process. Yield rates are a comparison of the number of applicants or potential applicants at one stage in the recruitment/selection process with the number of applicants that remain available at the next stage. To determine programmatic activities and action plans, the SPHR must work backward from the total number and types of employees that will be needed, including dates on which they will be needed. Based on experience, moderated by any projected changes in timeframes or yield rates, the planning process must incorporate an evaluation of the scope and timing of activities to produce the desired results. In the case of the example in Figure 3.1, the SPHR must lead the organization in a determination as to the timing of recruitment efforts and the number of actual contacts that must be made to produce the 10 new employees at the appropriate time. The various stages of this process are discussed in subsequent sections of this chapter.

Figure 3.1 A yield funnel.

Pearson IT Certification Promotional Mailings & Special Offers

I would like to receive exclusive offers and hear about products from Pearson IT Certification and its family of brands. I can unsubscribe at any time.


Pearson Education, Inc., 221 River Street, Hoboken, New Jersey 07030, (Pearson) presents this site to provide information about Pearson IT Certification products and services that can be purchased through this site.

This privacy notice provides an overview of our commitment to privacy and describes how we collect, protect, use and share personal information collected through this site. Please note that other Pearson websites and online products and services have their own separate privacy policies.

Collection and Use of Information

To conduct business and deliver products and services, Pearson collects and uses personal information in several ways in connection with this site, including:

Questions and Inquiries

For inquiries and questions, we collect the inquiry or question, together with name, contact details (email address, phone number and mailing address) and any other additional information voluntarily submitted to us through a Contact Us form or an email. We use this information to address the inquiry and respond to the question.

Online Store

For orders and purchases placed through our online store on this site, we collect order details, name, institution name and address (if applicable), email address, phone number, shipping and billing addresses, credit/debit card information, shipping options and any instructions. We use this information to complete transactions, fulfill orders, communicate with individuals placing orders or visiting the online store, and for related purposes.


Pearson may offer opportunities to provide feedback or participate in surveys, including surveys evaluating Pearson products, services or sites. Participation is voluntary. Pearson collects information requested in the survey questions and uses the information to evaluate, support, maintain and improve products, services or sites; develop new products and services; conduct educational research; and for other purposes specified in the survey.

Contests and Drawings

Occasionally, we may sponsor a contest or drawing. Participation is optional. Pearson collects name, contact information and other information specified on the entry form for the contest or drawing to conduct the contest or drawing. Pearson may collect additional personal information from the winners of a contest or drawing in order to award the prize and for tax reporting purposes, as required by law.


If you have elected to receive email newsletters or promotional mailings and special offers but want to unsubscribe, simply email information@informit.com.

Service Announcements

On rare occasions it is necessary to send out a strictly service related announcement. For instance, if our service is temporarily suspended for maintenance we might send users an email. Generally, users may not opt-out of these communications, though they can deactivate their account information. However, these communications are not promotional in nature.

Customer Service

We communicate with users on a regular basis to provide requested services and in regard to issues relating to their account we reply via email or phone in accordance with the users' wishes when a user submits their information through our Contact Us form.

Other Collection and Use of Information

Application and System Logs

Pearson automatically collects log data to help ensure the delivery, availability and security of this site. Log data may include technical information about how a user or visitor connected to this site, such as browser type, type of computer/device, operating system, internet service provider and IP address. We use this information for support purposes and to monitor the health of the site, identify problems, improve service, detect unauthorized access and fraudulent activity, prevent and respond to security incidents and appropriately scale computing resources.

Web Analytics

Pearson may use third party web trend analytical services, including Google Analytics, to collect visitor information, such as IP addresses, browser types, referring pages, pages visited and time spent on a particular site. While these analytical services collect and report information on an anonymous basis, they may use cookies to gather web trend information. The information gathered may enable Pearson (but not the third party web trend services) to link information with application and system log data. Pearson uses this information for system administration and to identify problems, improve service, detect unauthorized access and fraudulent activity, prevent and respond to security incidents, appropriately scale computing resources and otherwise support and deliver this site and its services.

Cookies and Related Technologies

This site uses cookies and similar technologies to personalize content, measure traffic patterns, control security, track use and access of information on this site, and provide interest-based messages and advertising. Users can manage and block the use of cookies through their browser. Disabling or blocking certain cookies may limit the functionality of this site.

Do Not Track

This site currently does not respond to Do Not Track signals.


Pearson uses appropriate physical, administrative and technical security measures to protect personal information from unauthorized access, use and disclosure.


This site is not directed to children under the age of 13.


Pearson may send or direct marketing communications to users, provided that

  • Pearson will not use personal information collected or processed as a K-12 school service provider for the purpose of directed or targeted advertising.
  • Such marketing is consistent with applicable law and Pearson's legal obligations.
  • Pearson will not knowingly direct or send marketing communications to an individual who has expressed a preference not to receive marketing.
  • Where required by applicable law, express or implied consent to marketing exists and has not been withdrawn.

Pearson may provide personal information to a third party service provider on a restricted basis to provide marketing solely on behalf of Pearson or an affiliate or customer for whom Pearson is a service provider. Marketing preferences may be changed at any time.

Correcting/Updating Personal Information

If a user's personally identifiable information changes (such as your postal address or email address), we provide a way to correct or update that user's personal data provided to us. This can be done on the Account page. If a user no longer desires our service and desires to delete his or her account, please contact us at customer-service@informit.com and we will process the deletion of a user's account.


Users can always make an informed choice as to whether they should proceed with certain services offered by Adobe Press. If you choose to remove yourself from our mailing list(s) simply visit the following page and uncheck any communication you no longer want to receive: www.pearsonitcertification.com/u.aspx.

Sale of Personal Information

Pearson does not rent or sell personal information in exchange for any payment of money.

While Pearson does not sell personal information, as defined in Nevada law, Nevada residents may email a request for no sale of their personal information to NevadaDesignatedRequest@pearson.com.

Supplemental Privacy Statement for California Residents

California residents should read our Supplemental privacy statement for California residents in conjunction with this Privacy Notice. The Supplemental privacy statement for California residents explains Pearson's commitment to comply with California law and applies to personal information of California residents collected in connection with this site and the Services.

Sharing and Disclosure

Pearson may disclose personal information, as follows:

  • As required by law.
  • With the consent of the individual (or their parent, if the individual is a minor)
  • In response to a subpoena, court order or legal process, to the extent permitted or required by law
  • To protect the security and safety of individuals, data, assets and systems, consistent with applicable law
  • In connection the sale, joint venture or other transfer of some or all of its company or assets, subject to the provisions of this Privacy Notice
  • To investigate or address actual or suspected fraud or other illegal activities
  • To exercise its legal rights, including enforcement of the Terms of Use for this site or another contract
  • To affiliated Pearson companies and other companies and organizations who perform work for Pearson and are obligated to protect the privacy of personal information consistent with this Privacy Notice
  • To a school, organization, company or government agency, where Pearson collects or processes the personal information in a school setting or on behalf of such organization, company or government agency.


This web site contains links to other sites. Please be aware that we are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of each and every web site that collects Personal Information. This privacy statement applies solely to information collected by this web site.

Requests and Contact

Please contact us about this Privacy Notice or if you have any requests or questions relating to the privacy of your personal information.

Changes to this Privacy Notice

We may revise this Privacy Notice through an updated posting. We will identify the effective date of the revision in the posting. Often, updates are made to provide greater clarity or to comply with changes in regulatory requirements. If the updates involve material changes to the collection, protection, use or disclosure of Personal Information, Pearson will provide notice of the change through a conspicuous notice on this site or other appropriate way. Continued use of the site after the effective date of a posted revision evidences acceptance. Please contact us if you have questions or concerns about the Privacy Notice or any objection to any revisions.

Last Update: November 17, 2020