Workforce planning

Your growth and ability to implement change will be hindered if you do not have the right people available with the right capabilities to drive business development and deliver value added services. Volatile market conditions and fast-changing business environments can increase the need for your business to excel at workforce planning as part of its operational activities.

Create a holistic end-to-end approach to workforce planning for your business that will be flexible in response to future changes and external factors. It should be based on accurate and rigorous data. Do not let your short-term requirements cloud your long-term focus.

Consider the impact your employees and their roles will have on your business over time when planning your workforce. One successful workforce planning strategy is known as the cascade approach. This involves determining, first and foremost, your business goals, then addressing these with key aspects of your workforce planning in three distinct phases: the short-, medium- and long-term.

1. Define your business’s vision and strategy and from these assess the demand and supply of your products or services, and capacity and capabilities of your employees.

2. Phase the components of workforce planning in terms of short-, medium- and long-term timelines. Put in place effective, fit-for-purpose and well-aligned workforce planning. Identify the tools and techniques to be used across each timeline.

3. Develop tools and techniques that can be easily deployed to meet short-term requirements as a matter of priority.

Develop a simple process for effective workforce planning that allows your business to understand what needs to happen and is also easy to follow. A step-by-step process is represented here.

Base your approach on accurate data to allow for scenario planning,  modelling and effective management decision-making.

Illustrative example of implementing a cascade approach

A business in the retail sector was concerned that current resources, employment contracts, shifts and rosters were not flexible enough to allow deployment of employees to cover peaks in customer demand within each day and across the week, and opportunities to optimise sales were being missed.

Consultants helped the business develop a resourcing model to estimate capacity requirements for key categories of store workers, based on the time required for customer-facing activities and back-of-shop tasks. The capacity profiles were determined using data on footfall and sales, and derived from in-store work studies. 

The consultants went on to work on business deployment options to identify how the current resources could be deployed to cover demand more effectively and how changing the mix and number of resources, working hours and shift patterns could improve resource utilisation. The options evaluated included staggered start times, shorter shift lengths and an increase in employees working part-time hours. The business also divided up shifts both within the working day and between local outlets.

The consultants were able to show the impact of different deployment options on both resources and costs. They also advised on the HR implications of changing contractual terms and conditions of employment along with the consultation process required to agree the changes proposed. The recommendations are being piloted in a small number of stores ahead of implementing them across the entire network.

There are a number of questions that you can ask to help you assess the scale of the challenge you face:

What immediate workforce planning issues need to be resolved?

Do you have fully effective workforce planning tools and techniques that give you a clear view on resource allocation?

Can you foresee in advance when you will need to deploy resources?

Does your planning and approach ensure you never exceed budget, overtime limits or costs for temporary labour?

What are the views across your business on workforce planning and the issues faced? Are they consistent?

What gaps exist in resolving the issues within your business?

Does your business have the skills and capabilities to implement effective workforce planning?

Have you clearly articulated your business’s vision and do your employees understand it?

Develop a skills matrix of the capabilities, skills and ways of working your business will require. Evaluate all the core skills required to support business critical operations. 

A critical point in your workforce planning is defining the capabilities and skills your business needs to run smoothly and to provide you competitive advantage. Quality employees alone are not sufficient: they must be in the right positions to carry out your business operations. 

Once you have outlined the necessary skills and capabilities, map them to the ones that already exist within your business. This will help you determine which skills and capabilities you will need to acquire or further develop to enable you execute your business goals effectively or improve your day-to-day operations. 

Good workforce planning will guide your recruitment process and help you find the right employees for positions, indicate skill development opportunities and increase both employee efficiency and job satisfaction. 


You need to find and recruit the right talent if you are to drive your business forward. Even though your business may be small and have less resources than larger multinational businesses, it can still be an attractive employer. 

Look for cultural fit

 Smaller businesses that have retained their own culture and nurtured purposes and values integral to their vision usually find the talent that best fits their business model. You may be tempted to hire quickly to fill vacancies during periods of rapid growth. However, it is important to ensure that new employees fit with your business’s existing culture and identify with its values. New employees who possess similar outlooks or attitudes feel more engaged, thrive on developing and have increased job motivation. Their principles are also already aligned with those of your business. Without this alignment, employees are unlikely to put in the required effort, deliver quality service and remain committed to your organisation in the long term.

Develop your employer brand

 Communicate your vision, goals and objectives to create the image that best reflects your organisation. Maximise your brand exposure to attract potential candidates. You can use social media such as Facebook to promote your brand at low cost, achieving more brand exposure and awareness. Other approaches may include forming links with local colleges and universities or establishing presence through community networks.

Have a succession plan

 Having a formal succession plan in place gives potential new employees a sense of confidence in the long-term leadership and hence the success of your business. A strong and transparent leadership plan helps your business to continue to operate on a stable path and create competitive advantage.

Training and development

 Think about how to develop your talent to ensure your business has the skills it will need in the future. Your employees will be more committed to fulfilling business goals and objectives when their employers are committed to fostering their professional growth through continual training.

Recognise the people factor

 Understand that employees drive your business’s success, and motivate them accordingly. Implement reward and recognition practices, workforce and succession planning, and performance appraisals. Provide good working conditions, determining the needs and expectations of your employees and finding solutions that work best for them.

Tapping government initiatives

 There are a host of initiatives to expand the business potential of smaller enterprises, such as the European Skills Agenda within the European Union. These initiatives are designed to build capabilities and improve productivity to enable sustainable business growth. They allow your employees to picture their future within your business, absorb and master new skills and apply themselves when new opportunities arise.

Leading enterprises of tomorrow

Business owners need to be aware of the challenges of today’s talent pool. Employees are scarce, mobile, increasingly demanding and have ever-changing needs that will see their loyalty and commitment waver. Introduce new strategies to strengthen your value proposition and remain attractive as an employer.

Before you start the hiring process, analyse your current staffing situation and the capabilities you have at your disposal.

Focus on hiring quality employees who intend to stay. Try to avoid hiring friends and family members, or if you do so, make sure they bring additional value to your business. Hiring unqualified or unsuitable employees will cause you trouble and waste money. It may also demotivate other employees.

Your hiring process should start with formal recruitment adverts, cover the selection procedures and end with making an official offer to the best candidate. 

When hiring employees, make sure that you meet your obligations as an employer.

How to find new employees

To identify potential candidates, undertake a recruitment or candidate sourcing process. This involves identifying how and where to advertise vacancies, performing recruitment activities, participating in recruiting events, and potentially managing recruitment agencies.

You can recruit employees yourself, or you can hire a recruitment agency to help you in the process. This may be useful where you need a certain type of knowledge, skill or type of worker. If you decide to hire a recruitment agency, you should ask your colleagues or business partners and liaise with SME associations to recommend a reputable recruitment agency that has experience with your type of business.

In some cases, you may want to consider outsourcing and using specialised agencies which will be the ultimate employers but which provide services to your business on demand. This attracts costs, but it may lower your administrative burden and any risk associated with employing specific skilled or seasonal employees for limited time periods.


Start by creating a clear job description for your vacant position to help you find the right candidate. This should include listing the core business activities the employee should perform and the responsibilities the employee will hold once hired. 


You can employ a wide range of recruitment channels to advertise vacancies. Asking your family, friends and employees to recommend potential candidates may be a cheaper and faster option and could help you source qualified employees recommended by people whose opinions you value. However, this process is highly dependent on the level of trust you have towards the person making the recommendation. 

A more objective approach would be to place job advertisements in newspapers or on online platforms, including job sites and social networks such as LinkedIn or Facebook. Make sure your job ad covers these critical areas:

a short description of your business

the job description

the requirements for eligibility

instructions on when and how to apply. 

If you have sourced candidates before, search CVs you already have in your possession. Candidates who did not fulfil the requirements of previous vacancies may still be suitable for newly-opened positions. 

Choosing the right candidate

To choose the right candidate, review applications according to job requirements. This may include reviewing CVs, reference or background checks and analysis of cover letters.

Internally you should decide on the selection criteria for successful candidates. This may involve tests or interviews to help you assess how the candidate will approach and respond to situations they are likely to encounter in the workplace and to give you a better understanding of their skills and previous work experience. Develop structured interviewing techniques and design appropriate assessments to evaluate candidates’ skill sets, experience, relevance to the role and cultural fit to your business.

Work sample exercises are the best indicators of future job performance. These help the person in charge of hiring to evaluate the quality of a candidate’s work instead of relying only on their CV or other factors such as appearance and personality. The process also helps to minimise unconscious bias.

Use a standardised interview approach. Unstructured interviews are often unreliable for predicting job success and can be unfair to other candidates. Structured interviews using the same set of defined questions minimise bias by focusing on factors that have a direct impact on future employee performance.

Making an offer

After you have selected the candidate that best meets your requirements, make a formal offer. Once the candidate accepts the position, draw up a contract and notify the candidates that did not succeed in the process. It is advisable to ask rejected candidates whether you can retain their applications for use should new opportunities arise. 

Many countries have rules related to the processing and transfer of personal data of natural persons. In the European Union, all countries are subject to Regulation (EU) 2016/679 (General Data Protection Regulation) as of 25 May 2018, which sets out rules to protect people with regard to the processing of their personal data and rules relating to the free movement of personal data. 

When running any recruitment process and managing any employee relationships, make sure that you understand any laws or regulations relating to the collection and handling of personal information. Personal information may include names, identification numbers, location data or other information that can identify a candidate or employee.

Roles outside your core competencies

If you need a specific set of skills for only a short period of time (for example, temporary workers for a particular project) or have tasks to be performed that are not central to your business (such as accounting or cleaning services), consider outsourcing these activities on a temporary basis. However, do not outsource your core functions. Instead, aim to retrain your current employees or hire new ones to provide consistency and continuity in your day-to-day operations.

You can also consider hiring a contractor or supplier for a short period to bring down long-term payroll costs. Be aware that the intentional characterisation of an employee as a contractor to avoid certain employer obligations may give rise to liabilities in some jurisdictions.

Termination of employee contracts

In some cases you will need to terminate employees’ contracts. Whether this is due to redundancy, poor employee performance or any other valid reason, bear in mind the rights of your employees and the obligations you have as an employer. 

Employee rights may include redundancy pay, a notice period, a consultation with the employer, the option to move into a different job or paid leave to find a new job. 

Consider specific local worker protection regulations regarding selecting employees for redundancy, as there may be restrictions on selection grounds relating to age, gender, disability or pregnancy. There may also be the requirement to consult with trade unions in certain business sectors or employee representative bodies if these exist within your organisation.

Make sure you include termination clauses in your contracts and act accordingly to minimise any negative legal impact this may have on your business.

Succession planning

Your business will not remain the same forever. Your employees will change and inherit positions as others leave the company or take on roles that require more responsibilities. This is known as succession. 

You cannot always choose the time when succession occurs in your business. It may be that somebody leaves or even dies, causing a shift in leadership. In order to plan your business’s succession as thoroughly as possible in advance, develop a formal succession plan.

A well-considered succession plan is a powerful tool for ensuring the smooth transfer of power when the owners or leaders of your business move on from their roles. A well-considered succession plan suggests that leaders are aware of the importance of the succession process and that it can be handled in a timely and professional manner. The better the plan, the better the outcome.

Choosing a future successor who has progressive ideas and a potentially profound new vision for the business is not a decision to be taken lightly, and it is often a courageous decision for the current leader to make. Nevertheless, it is one of the most critical decisions you will need to make in order to secure the continued success of your business.

Handing the business over to a new leader, new management or a new owner is all-encompassing. It is not exclusively about the selection and development of the successors. It is just as importantly about protecting the business’s brand, reputation and culture, and retaining key knowledge to ensure that the business is sustainable for years to come. Planning for succession may feel like letting go of your business, and may be a somewhat emotional process, especially for an entrepreneur who has built a business from the ground up, but it is vital for your business to stay true to its original vision.

Succession planning ensures that possible successors clearly understand the expectations and responsibilities required to take over the business, and determines if the potential management capabilities exist among current employees.

Businesses with well-established contingency and succession plans take into account the developmental needs of employees who are likely to become potential successors. Often this includes leadership education complemented by direct business experience gained at various ages and stages in the employees’ lives.

Communication and implementation of the succession plan is necessary to help identify all the risk factors and ensure everyone is informed of the goals, processes and timelines.

Find out how to prepare a succession plan. 

In order to make the right decision and consider all the options objectively, business leaders sometimes hire an external third party to guide and manage the process. An independent viewpoint helps facilitate discussions about possible successors and guides leaders through established processes to develop a suitable succession plan. 

A disciplined approach to succession:

understands what the business needs

protects the brand

maintains financial confidence

retains legacy knowledge

documents the plan

shares the plan widely throughout the business.

Adapting to change can be challenging for everyone and succession by its very nature occurs at a time of great change within the business ecosystem, in some cases on the death of a leader, or in other cases when a leader steps back from actively managing the business. At such times, having a formal succession plan will provide a sense of continuity and ensure continued success. 

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