How to Develop a Staffing Plan

This how-to guide is designed to help an HR professional answer the question, "What staff support will my HR department need in the next year, and how will we meet those requirements?" (Generally, the time period is a year, but it could be shorter or longer.) The staffing plan should be used to identify not only head count additions and reductions but also the different skills and knowledge that might be needed. Staffing plans may encompass employees, contractors, consultants or other experts. In essence, the steps used in developing a staffing plan help HR professionals ask the right questions to come to a clear understanding of the current state, the desired future state of the function and how to get there.

Staffing plans are often used during budget cycles to help plan and allocate costs. However, staffing plans can be used any time there will be a major adjustment to a workforce.

While the steps given below and the sample staffing plan are specifically for a human resource department, they can be applied to any function within an organization. HR professionals can also use the steps and staffing plan on a larger scale for a division or entire company. For best results, each step should be completed in order rather than jumping ahead.

Staffing plans can be one component of a strategic workforce plan. The differences between the two and how they intersect will be discussed at the end of this how-to guide.

For a demonstration of how each step would work, see a sample rationale for decisions made at the end of each step, and a sample staffing plan based on those decisions.

Steps to Complete a Staffing Plan

Step 1: Evaluate Goals

The first step in developing a staffing plan is to evaluate the needed goals to achieve. By recognizing the targets employees will be working toward, human resource professionals can identify the amount and type of support needed to meet those expectations.

Ensuring a clear understanding of expectations helps HR professionals in a number of ways. Departmental goals should align and support organizational goals. Thus, this exercise is a perfect opportunity to reach out to other leaders to understand their expectations of the department in the upcoming year, including support for major projects, new strategic initiatives or other changes that will require adjusting staff.

In addition, during this step, HR should identify any major goals within the function. Perhaps a reorganization or realignment is needed to increase customer service or develop specific expertise.

Questions to ask when evaluating goals include:

• What are the organization's major strategic and tactical goals for the upcoming year?
• How will the HR function support those goals?
• What goals do I need to set for my function to ensure I'm aligned with the company's goals?
• What support are other functions/departments expecting from my department this year?
• What internal goals would this function like to achieve this year?

Step 2: Identify Influencers

In this step, HR professionals determine the factors that might affect the staffing plan. Influencers can be internal or external to the organization. They can be positive or negative and are defined as anything that might indirectly affect the plan but that the organization has little control over. By evaluating influencers on the staffing plan, HR professionals survey the landscape to identify and understand forces that will affect the talent supply. Examples of such influencers are a tight labor market, changing regulations and evolution of a function.

To complete this step, HR professionals should start with a brainstorming session to identify everything that might impact their workforce. Once they generate the list, they can then group like influencers. For example, if the brainstorm list includes "low unemployment" and "competitor ABC Company is hiring 50,000 local workers in the next year," the two could be consolidated under the influencer "external workforce availability."

Sources that provide labor market data include:

• U.S. Bureau of Labor Statistics.
• State and municipal labor statistics.
• State unemployment data.

Questions to help identify influencers include:

• What is the talent availability in our market?
• What trends are affecting skill development? These could be social impacts such as managing social media requirements, learning new skills as part of process evolution or the need to learn new technology.
• Will technology changes influence our labor supply or demand? These changes could be new technology that will require additional staffing or training time or technology that improves efficiencies, thereby eliminating jobs.
• Will changes to regulations affect our workforce?
• Do we have competitors that will affect the supply of labor? Perhaps competitors are growing their workforce, or they are laying off people, thereby growing the labor supply.
• Will economic or financial factors affect our staffing plans? These may include anticipated changes to the local economy, tightening of financing available to the organization or an influx of venture capital funding.
• Do we need to account for constraints or impacts from facilities or infrastructure? These include office size, location and commuting implications.
• Are potential "game changers" affecting our industry? Called "disrupter companies," examples include Uber and its impact on the taxi industry. Other game changers include technology improvements such as driverless cars that may affect the transportation industry.

Step 3: Analyze the Current State of the Function

As with any plan, it is critical to know the starting point. In this step, HR professionals compile information on the current state of the function or create an inventory of the important components of the skill set currently in play.

Compiling information on the current state of the HR function involves listing all current resources, including staff, contingency workers or other people who regularly support function goals. In addition, the current-state analysis should determine competencies, skill set or expertise to fully understand the tools presently available to meet expected plans.

As part of the activities in this step, HR professionals need to decide which systems to use to obtain the analysis data. Small departments can simply count positions on an organizational chart. However, data for larger staffing plans may need to be pulled from the human resource information system (HRIS) or payroll, talent management or scheduling systems. If the staffing plan is for head count purposes, payroll or HRIS data will suffice. But for competency planning, a learning or talent management system may provide the most accurate data.

In this step HR should also evaluate factors that may change the makeup of the department, such as flight risks, potential departures and current open positions actively being recruited.

This step does not include identifying gaps; that activity happens in Step 5.

Questions to ask while analyzing the current state include:

• What systems should I review for data on the current state?
• Who are my current staff members? What positions affect how we get things done (e.g., what responsibilities require an HR manager versus an HR administrator)?
• What expertise do staff members bring to their role?
• Do other employees outside of my function regularly influence achieving HR team goals (e.g., perhaps the employee in payroll who reports to the chief financial officer)? This question is especially relevant in matrixed organizations.
• Do vendors, contractors or others outside my organization regularly contribute to achieving team goals?
• What are the competencies my current staff have?
• Do I have any employees who are flight risks or who have personal issues that may affect their longevity with the organization?

Step 4: Envision Needs

In Step 4, HR professionals envision what will be needed to accomplish the goals set out in Step 1. Keys to this step are to start fresh and not be overly influenced by the current state. This step identifies both end-state staffing and interim needs. It should be assessed at both a head count and skills level.

To complete this step, HR professionals should review the goals outlined in Step 1 and imagine what will be needed to accomplish those goals. It is best to envision needs as if building the department from scratch. Taking this approach will help articulate requirements without being hampered by the current state.

The envisioning step may be approached from a head count perspective. However, envisioning needs from a skill set, competency or expertise perspective helps overcome biases that may exist in the current state.

Questions to ask while envisioning needs include:

• What expertise does the HR function need to accomplish our goals for next year?
• How many people will we need to meet our goals, and where should they be located? Sources for this figure may include current span-of-control numbers, staff ratio recommendations, historical rule of thumb within the organization or statistical regression analysis.
• Does staffing change throughout the year? What will it look like in six months? In 12 months?
• What is the ideal mix of staff, contractors or outside expertise needed to meet our goals? Generally outside experts are costly specialists such as lawyers or consultants whom HR may want on only a very limited basis but whose input is critical to the success of the plan. Contractors should be hired to fill short-term needs.
• What budget will we need to meet our goals?

Step 5: Conduct a Gap Analysis

Step 5 identifies what is missing between the end state outlined in Step 4 and the current state identified in Step 3. Gaps may include inadequate staffing, lack of expertise or simply the wrong people in the wrong place. Information derived from a gap analysis will identify deficiencies in the current state of the function that HR will need to address to achieve the outlined goals. HR professionals should not view these gaps as weaknesses of the current department but rather as opportunities to evolve the function into an ideal state to achieve organizational goals.

Questions to ask when doing a gap analysis include:

• If I compare the end state to the current state, in what areas are we currently unable to support outlined goals?
• Where will we need to adjust current staffing? Will factors such as current performance or mobility affect the current staffing?
• Do we lack staff with the right expertise in functional areas?
• Do we have geographical gaps in which we need to hire staff?
• Will cross-functional collaboration be needed? If so, how can we strengthen that partnership?

Step 6: Develop a Solution Plan

Having conducted the analysis above, HR professionals can now put together a plan to achieve the stated goals for the upcoming year. The plan should include both end-state staffing and any interim staffing needed. Step 6 often encompasses determining timing (i.e., when to hire or promote specific staff) and assigning costs if the staffing plan is being done in conjunction with a budget cycle.

The plan itself should outline the staff needed, at what time and location. It should differentiate full time versus contingent staff and identify every role needed in the function from entry level to executive. The plan may also detail the timing for when specific, outside expertise is needed.

Staffing plans may be created as tables, charts, PowerPoint presentations or other visuals. The important thing is to present the information in a format that provides the amount and type of information required in an easily consumable format.

Questions to ask while developing the solution plan include:

• Given all the information above, how do I use it to achieve the goals outlined in Step 1?
• At the end of the year, what should my staff composition consist of?
• When and where will we need to adjust staffing levels to support organizational goals?
• What level of expertise do I require in which roles?
• How am I accommodating for the influencers identified in Step 2?
• How am I addressing the gaps outlined in Step 5? Outside of hiring, would training or other methods help cover these gaps? Can we fill some of these gaps with technology?
• Finally, how often do I need to revisit this plan to ensure it continues to meet organizational needs?

Summary

As detailed above, completing a staffing plan comprises six main steps:

1. Evaluate goals: What does this function need to accomplish?
2. Identify influencers: What factors might affect the staffing plan?
3. Identify the current state: What is the starting point?
4. Envision needs: What is really needed (end state)?
5. Conduct a gap analysis: What differences exist between the current state and the end state?
6. Develop a solution plan: What types of staff are needed? When and where?

The above outline is designed to complete a staffing plan for a specific function. Staffing plans can also be created for entire divisions or organizations. To complete staffing plans with a bigger scope, organizations can break down the plan into manageable pieces. For example, a division might complete individual staffing plans for the sales, finance, HR, IT, marketing and production functions and then combine them into one overall plan. HR professionals responsible for this type of planning must closely collaborate with the leaders of each individual group to understand goals, needs and expertise required. Conducting such an exercise can help leaders refine their understanding of how each function interlocks to support overall organizational goals.

As noted in the introduction, staffing plans may be one component of workforce planning. The table below provides a summary of the difference between staffing plans and workforce planning as defined by a study on strategic workforce planning conducted by The Conference Board in 2012.

Staffing plans can be the first step in evolving the organization toward adoption of workforce planning. As leaders become more comfortable with the iterative exercise of planning for head count, additional complexities in terms of criteria, time frames or scenarios may be added to help address long-term strategic plans.