Workforce planning: a complete guide for UK HR leaders

Whatever business you’re in, it’s likely that the people you employ are your most important asset. But does your workforce have the skills, the capacity, and the structure to deliver future business goals?

The challenge of answering that question in the affirmative is becoming more complex year on year. AI is on the rise, and thus dramatically changing the work landscape, skills shortages are an ever present problem, and global economic uncertainty is making workforce decisions harder to get right. On top of that, businesses feel the pressure to increase productivity while controlling costs and maintaining a high level of employee engagement.

This is where workforce planning is critical. Carried out professionally, it can help businesses anticipate future workforce needs, identify skills gaps before they become a liability, and lead to more informed decisions about recruitment, career development, redeployment, and restructuring.

Workforce planning is a system that ensures a business has the right people, with the right skills, in the right roles, at the right time, and at the right cost to deliver on business objectives. 

Traditionally, workforce planning lent heavily on the focus of forecasting headcount and recruitment needs. Now, workforce planning in the modern workplace is centred on skills. It’s no longer a question of how many employees are needed in two years’ time, but which in-demand skills are needed, which jobs might be usurped by AI, and which capabilities can be developed in-house.

In practice, workforce planning provides leaders with a structured, strategic, and proactive approach in which to anticipate future workforce needs, instead of just reacting to shortages, skills gaps, or restructuring pressures as they arise.

Several forces are converging to make workforce planning more important now than ever before. For HR leaders, the dilemma isn’t whether workforce needs will change, but how quickly they can identify future capability requirements to build a strategy that will keep up with ever-changing needs. Effective workforce planning provides the framework to do that.

AI is accelerating changes across the UK labour market, as well as further afield, changing how work is performed and which skills are viewed as the most valuable. Humans are increasingly working alongside AI, with the tech side making light work of automating routine tasks while employees concentrate on the human qualities of judgement, creativity, decision-making, and building relationships. It’s a classic case of “if you can’t beat ‘em, join ‘em,” according to the latest report from McKinsey.

This does lead to a challenge when it comes to workforce planning, as HR leaders must identify and predict which skills will be more valuable in the future, which skills will decline in importance, and how quickly employees can be reskilled to meet future needs.

Although vacancy levels have settled down since those post-pandemic highs, employers are still facing recruitment difficulties across many sectors. This is shown by the CIPD’s Resourcing and Talent Planning Report which found that:

• 69% of employers reported an increase in competition for talent.
• 64% experienced difficulties when trying to attract candidates.
• Over half (56%) reported challenges when retaining talent.

These figures emphasise a basic workforce planning reality – that organisations can’t just rely on external recruitment to solve capability shortages.

This pressure is found particularly in professional and tech roles, as discovered by the Hays Salary & Recruiting Guide 2026, which identified that 93% of employers had experienced skills shortages over the past year.

Many UK industries are dealing with an ageing workforce, particularly in the healthcare, engineering, manufacturing, and local government sectors. As experienced employees retire, organisations risk losing critical expertise and institutional knowledge. 

The Local Government Association illustrates this, citing that there is an ageing workforce across local government, 74% of councils reported recruitment and retention difficulties, and council HR services are being cut. This has resulted in a reduction in the expertise and capacity needed to conduct workforce planning.

Workforce planning helps organisations to identify succession risks early on, in order to build capability pipelines before gaps in knowledge become too stark and difficult to manage.

The end of free movement from the UK to Europe, and vice versa, has significantly changed talent availability in sectors that used to rely on labour from the EU. Sectors including hospitality, social care, construction, and logistics have suffered from recruitment pressure that will need a long-term workforce planning approach, involving apprenticeship programmes, internal development pathways, and alternative talent pipelines. 

Workforce planning has many benefits, including: 

1. Aligning the workforce with the business strategy

Workforce planning ensures that workforce decisions are driven by objectives, rather than short-term operational pressures. By understanding future workforce requirements, organisations can align recruitment, development, and succession planning with strategic priorities, whether that’s about growth, transformation, cost reduction, or dipping a toe in the water of new markets.

2. Reducing recruitment and workforce costs

Recruitment can be expensive, especially when organisations are competing against each other for skills that are few and far between. Workforce planning helps employers to make informed decisions about whether capabilities should be developed internally, acquired through recruitment, or supported with alternative workforce models. By anticipating these needs earlier, organisations can reduce the reliance on urgent hiring and agency workers.

3. Enabling more effective talent and succession planning

Workforce planning provides greater visibility of workforce demographics, retirement risks, and leadership pipelines, allowing an organisation to identify critical roles then develop successors. This reduces the risk of knowledge loss when experienced employees leave.

4. Improving workforce agility

Business conditions change quickly. The uncertainty of the job market, technological change, and shifting customer demands have the potential to alter workforce requirements. Organisations that review workforce data and model different scenarios on a regular basis are in a better position to respond to change without resorting to reactive hiring or making on-the-hoof restructuring decisions.

5. Delivering stronger redeployment and workforce transition outcomes

Workforce planning helps organisations identify where surpluses may appear, creating opportunities to explore redeployment, reskilling, and internal mobility before redundancies become an issue. If business transformation can’t be avoided, workforce planning will support a more structured and responsible approach to any transitions, helping employees move into new opportunities while minimising business disruption.

Overall, effective workforce planning means organisations can make proactive, rather than reactive, workforce decisions. Instead of responding to challenges as they arise, leaders can pre-empt change, prepare for future workforce needs, and build a more resilient organisation.

While the principles of workforce planning are straightforward, many businesses fail when it comes to  converting them into a structured, repeatable, and easy-to-follow process. Although every organisation’s approach will be different, depending on the size of the business, the sector, and its objectives, most workforce planning initiatives follow the same core stages. 

Our 6-step process provides a practical framework that aligns workforce decisions with business strategies. This enables HR leaders to arrive at informed choices on recruitment, staff development, succession planning, redeployment, and organisational change.

Step 1: Understand your business strategy

To start the ball rolling with effective workforce planning, understand your organisational objectives. Key questions to ask are:

• What are the projected growth targets?
• Which markets are suited for the organisation to enter?
• Which products or services can be expanded?
• What investment into technology is planned?
• What operational efficiencies are expected?

For example, a retail business that’s planning to double online sales over the next three years could cut back on traditional store-based roles, while increasing roles in the areas of digital marketing, ecommerce, and data analytics.

Step 2: Analyse the current workforce

It’s a good idea to get ahead of the game when it comes to understanding your existing workforce, before predicting any future needs. In order to do this, it’s worth going in deep to analyse a range of business requirements including headcount, performance data, succession coverage, employee turnover, and recruitment metrics.

Explore these questions at the same time:

• Which roles are hardest to fill?
• What skills are most concentrated in older employees?
• Which teams experience the highest turnover?
• Where are the capability gaps emerging?

The objective here is to create an overall picture of your current workforce’s strengths and weaknesses.

Step 3: Predict future workforce demand

At this stage, focus on future organisational requirements, taking business growth, market change, the adoption of technology, economic conditions, and customer requirements into account. The more savvy organisations will forecast skills, not just job titles. 

For example, instead of forecasting demand for “HR Administrators,” it will be worth widening the net to forecast needs for workforce analytics, change management, and AI governance capabilities.

Step 4: Assess future workforce supply

From here, companies need to determine which future talent needs can be met internally. Things to consider here are retirement projections, internal mobility trends, succession pipelines, employee development potential, and recruitment capacity. This step often reveals that external recruitment on its own can’t address all of the future workforce needs.

Step 5: Conduct a gap analysis

A gap analysis identifies the difference between future demand and future supply, with three outcomes typically emerging, which are:

Skills shortages – the organisation lacks critical future capabilities.

The response options are:

• Recruitment.
• Upskilling.
• Apprenticeships.
• Strategic partnerships.

Capability gaps – employees require career progression frameworks to develop their skills.

The response options are:

• Training.
• Reskilling.
• Mentoring.
• Internal mobility.

Workforce surpluses – the organisation has more employees than future requirements justify.

The response options are:

• Redeployment.
• Role redesign.
• Natural attrition.
• Career transition support.

This is where workforce planning dovetails with redeployment and outplacement services – both of which  Careerminds excels at.

Step 6: Build and monitor workforce plans

This final step aims to convert the analyses and work into pockets of action, with plans including hiring priorities, development initiatives, succession actions, investment in new technology, restructuring plans for employees, and redeployment pathways.

Take note that workforce planning actions should be reviewed on a quarterly basis, particularly during periods of rapid market change.

Lewin’s model, developed in the 1940s, provides a useful 3-step framework when workforce planning involves significant organisational change.

1. Unfreeze – create awareness of workforce challenges and future capability needs.
2. Change – implement workforce interventions such as recruitment, reskilling, or restructuring.
3. Refreeze – embed new workforce structures, skills, and behaviours. 

The 9 box grid helps organisations evaluate employee performance and future potential. Where workforce planning is concerned, the model can identify:

• Successors for critical roles.
• High-potential employees.
• Future leadership pipelines.
• Development priorities.

The framework supports evidence-based succession planning and talent investment decisions.

Scenario planning is increasingly becoming seen as the best practice approach, as it helps businesses model multiple plausible future scenarios instead of just one. It draws on techniques pioneered by the US army, then adopted in business scenarios.

Scenario A: Moderate growth

• Revenue grows by 5%.
• Hiring increases slightly.
• Skill requirements remain the same.

Scenario B: AI acceleration

• Automation significantly increases.
• Administrative roles are reduced.
• Demand for digital skills rises exponentially.

Scenario C: Economic slowdown

• Hiring freezes occur.
• Productivity expectations rise.
• Redeployment becomes a priority.

This type of planning means organisations are able to adapt, no matter what the future holds.

A simple workforce planning template can be structured as follows:

Workforce planning stage	Key questions	Key deliverables
Business strategy	What are we trying to achieve?	Strategic workforce assumptions
Current state analysis	What workforce do we have?	Workforce profile
Future demand	What workforce will we need?	Future workforce map
Future supply	What workforce will we have?	Supply forecast
Gap analysis	Where are the shortages and the surpluses?	Gap report
Action plan	How will we close any gaps?	Workforce roadmap

 This framework can be used by HR teams during quarterly reviews as well as annual planning cycles.

One of the most overlooked benefits of workforce planning is the way in which it can identify workforce surpluses before redundancy programmes become an issue. When future workforce needs are accurately forecast, organisations gain the space and time to explore viable alternatives.

Example

A business identifies that automation will reduce demand for 30 administrative positions over the next two years.

When workforce planning is actioned:

• Employees can be reskilled.
• Redeployment opportunities can be created.
• Internal vacancies can be prioritised.
• Outplacement support can be planned where necessary.

But if workforce planning isn’t enforced:

• Valuable organisational knowledge is lost.
• Redundancies become more likely.
• Employees receive little notice about their future, and thus become disgruntled with the company.

This shifts workforce management from reactive restructuring to proactive workforce transition. 

Increasingly, organisations are viewing workforce planning as a growth tool and also as a mechanism for responsible workforce management. The organisations that will thrive over the next 10 years won’t be the ones that correctly predict labour market shifts every time, but the ones that identify emerging skills gaps, workforce surpluses, and career transition needs early enough to give them time to act before disruption becomes unavoidable.

At Careerminds, we boast an average time to land a new role at 11.5 weeks and a 95% placement rate across all our outplacement participants.

Many organisations are still treating AI as a project. Workforce planning requires a different perspective. The most important question isn’t, “Which jobs will be replaced by AI?” but, “Which skills will become more valuable and which tasks can be automated?”.

A useful way of doing this is to map roles into three categories:

Roles likely to be augmented

• HR Advisers.
• Account Managers.
• Financial Analysts.

AI supports their work but can’t replace professional judgement.

Roles likely to be transformed

• Administrators.
• Customer Service Managers / Assistants.
• Project Coordinators.

Their work will change significantly as routine tasks become automated.

Emerging roles

• AI Governance Specialists.
• AI Trainers.
• Change Management Specialists.

These positions within a company are on the rise, and will need careful consideration when introducing them into the workplace.

Avoid these common workforce planning pitfalls: 

• Treating workforce planning as an annual exercise – workforce plans quickly become outdated in rapidly changing environments, so quarterly reviews are advisable.
• Focusing on job titles rather than the skills required – skills provide a more accurate basis for future planning than job titles.
• Ignoring workforce data quality – poor workforce data leads to flawed workforce decisions.
• Failing to involve business leaders – workforce planning must be owned by the business, not solely by the HR department.
• Assuming that recruitment will fill every gap – the labour market often can’t supply required skills at the required scale or at the required time.
• Neglecting redeployment opportunities – many organisations identify workforce surpluses without creating pathways where internal movement is the preferred path. 

Example 1: Local government workforce planning schemes

The Local Government Association has examples of councils using workforce planning to address ageing workforces, social care shortages, digital skill shortage areas, and apprenticeship planning.

Example 2: NHS workforce planning

As one of the largest workforce planning exercises in Europe, the NHS Long Term Workforce Plan demonstrates demand forecasting, skills planning, succession planning, and training pipeline management, with actions falling into 3 separate areas of train, retain, and reform.

Example 3: Tesco’s skills-led workforce planning approach

Tesco has embedded workforce planning into a broader organisational transformation, moving towards an integrated, skills-led approach. A CIPD case study research showed that the retail giant restructured its people function to align workforce planning better with business strategy, data, and future capability needs, while strengthening the link between HR, business leaders, and operational planning.

While workforce planning normally starts with spreadsheets and basic HR data, in order to improve accuracy, visibility, and decision-making, it’s worth investing in dedicated workforce planning tools. Advanced technology can complement the work of HR teams during the analysis of large volumes of workforce data, when modelling future scenarios, and in the identification of emerging risks.

Most workforce planning software provides a comprehensive view of workforce demand and supply by combining data from HR, finance, and business systems. Common features include headcount forecasting, skills mapping, succession planning, scenario modelling, and workforce analytics dashboards.

For example, organisations can use workforce planning tools to model the impact of different business scenarios such as rapid growth, economic downturns, or automation, allowing business leaders to assess how workforce requirements may change under different conditions. This can lead to development of contingency plans.

Many HR information systems, including platforms such as Workday, SAP SuccessFactors, and Oracle HCM, offer workforce planning capabilities along with core HR functions. But technology alone doesn’t guarantee effective workforce planning. The quality of workforce data, leadership engagement, and alignment with business strategies are far more important than the software itself. 

Successful organisations use the technology to support workforce planning decisions, not replace the strategic thinking behind them.

The question for HR leaders is not whether workforce planning is worth doing, but how much risk the organisation is willing to carry by delaying until it becomes urgent.

If your organisation is considering outplacement services, or other workforce-related issues such as redeployment, workforce intelligence, or career enablement, get in touch with us at the earliest opportunity to find out more.