What is strategic workforce planning, and how can it close skills gaps?

By definition: workforce planning aligns people with current and future business needs, through analyzing, forecasting, and mapping workforce supply and demand.

The purpose of workforce planning is to identify current or emerging skills gaps, prepare for future talent needs, and help manage under or over-resourcing.

In this article, we’ll explore everything you need to know about workforce planning, and how to use it to build a future-proof business.

There are many benefits to strategic workforce planning, including:

Businesses will fall behind if they don’t have the right skills in place. Workforce planning is a means to address this challenge – let’s explore the trends reinforcing its importance.

Many leaders are looking at how to future-proof their workforce – with workforce planning one way to identify and tackle AI skills gaps. More than two thirds of leaders (69%) feel their organization will need different skills to stay competitive by 2030, according to Multiverse. Taking this a step further, a study from IBM(opens new window) found that 40% of workers will have to reskill in the next three years due to AI.

Workforce planning can also be used to address productivity blockers, by mapping out skills gaps and creating a plan to close them. In a Multiverse study, we found an estimated 25 days of productivity are lost from each employee due to data skills gaps, every year.

High employee churn and lower engagement are additional challenges: one study found 90% of UK employees are disengaged from their job(opens new window). Skill mismatches are one cause – meaning some employees feel their abilities are underutilized or don't align with their current roles.

In response, workforce planning can improve happiness and engagement. It places employees on tasks and projects that are a better fit for their skillset and desired development pathway – and are therefore more fulfilling.

The AI era is fuelling a surge in new roles – AI job postings are growing 3.6 times faster than all jobs in the UK, according to PWC’s 2024 AI Jobs Barometer(opens new window). It puts AI skills high in demand, creating a tight labour market.

For leaders looking to build the right AI skills within their workforce, upskilling existing employees talent may provide a faster, more cost-efficient method than external hiring.

And the appetite from employees is there: 83% of workers think developing their AI skills will help them to drive more value for their employer in the next 12 months.

The workforce planning process generally follows these steps in a continuous feedback loop:

Workforce planning in a 7-step cycle:

Now let’s explore how to approach tools and techniques for workforce planning.

The ‘five Rs’ framework is commonly used to align a businesses’ workforce to its goals: ensuring the organization has the Right People, Right Skills, and Right Roles, at the Right Time, and the Right Cost.

Building on that foundation, real-time monitoring tools can be used to assess productivity, attendance, and engagement levels of employees. Companies can use skills intelligence tools to quickly assess workforce skills and capabilities (like AI), and use this data to inform Learning and Development strategies.

For example, HR teams may decide to build in-demand skills within its existing workforce while flexibly using contract workers for short-term needs – using a model that balances cost, quality, and agility.

The construction industry deals with complex data, from geospatial and survey information to cost estimations and financials.

As the scale of projects and data estate grew at Laing O’Rourke, the international construction enterprise, decision-makers realised that data skills were needed outside of a ring-fenced IT department. If not, critical skills gaps could slow productivity.

Laing O’Rourke partnered with Multiverse in 2021 to establish its Data Academy. Nearly 300 employees have enrolled on the program, driving transformation within Laing O’Rourke.

As the era of AI continues to heat up, so will the pressure to find and plan to have the right talent in place. Strategic workforce planning can help you spot what’s needed for success today, while being ready for the challenges of tomorrow.