Most companies admit to continued difficulties planning effectively for their future staffing requirements and growth. At most, they plan their headcount annually for a current or near-term state. Those forecasts, often primarily expense-forecasting exercises that drive budget planning, lack the detail needed to effectively plan and develop talent strategies that support business objectives and the operational staffing requirements that flow from them. The level of precision needed for decision-making related to hiring, training, development, and succession planning, such as the types and numbers of employees, skills, and proficiency levels needed for the business to succeed, is lacking. Filling that knowledge gap requires a more robust, comprehensive, and objective approach to understanding current human capabilities, forecasting needs, and addressing the resulting gaps: workforce engineering.

The issues and challenges that workforce engineering addresses

Strategic workforce planning is a crucial capability that many organizations find difficult to build and sustain. For example, research by Workday and HCI found that 45% of companies reported being unprepared to fulfill their future talent requirements. In fact, despite increased volatility across financial, commercial, and labor markets, over 50% of companies that conduct workforce planning revise their plans only once per year. The shortcomings of HR teams in this space are significant, and that research uncovered insights into the challenges that include:

• 55% lack robust analytic capabilities on their workforce planning team
• 71% cited predictive analytics as a major capability gap 
• 66% had poor access to integrated HR data across talent platforms
• 61% reported difficulties accessing business data for integrated talent impact analyses, leading to 66% stating challenges linking talent data to business outcomes

The reasons companies face difficulties with workforce planning stem from the time, effort, and skill required to fully plan for the future. Data needs to be identified, accessed, integrated across multiple platforms, and then analyzed using modeling and statistical techniques. The reality is that while those may appear to be insurmountable barriers to HR leaders and their teams, less complex approaches can be used to establish a foundation from which more sophisticated analyses can evolve, if and when the organization determines it is ready. Workforce engineering offers a pathway from the most basic, but useful planning approaches to more advanced ones. 

Other common issues are related to:

• Poor clarity of scope. Attempts to build workforce forecasts that encompass every role, level, function, and operation can quickly become overwhelming, like “boiling the ocean”. Planning should have a clear objective and purpose, and, when starting off, focus on a pilot group whose roles are critical to the strategic objectives. 
• Diminishing relevance. Forecasts that are one-off, or even annual exercises, can quickly become outdated due to fluctuations in the business and the market at large. Staffing requirements and projections change, and static plans can lose their relevance.
• Missing supply-side data. Unlike headcount forecasts produced by corporate finance teams, workforce planning and workforce engineering analyses require insight into the availability of skills and talent in relevant job markets, against which gap analyses can be performed. Limited access to reliable external labor-market data can make it difficult to assess future talent availability and trust the resulting workforce projections.
• Uncertain responsibility for planning. While headcount projections are needed by finance, operations, and all other functions for their own planning and budgeting, centralized ownership is not always clear. HR, IT, business units, Finance, and even Administration can claim responsibility, particularly when they have dedicated systems and data that house some of the needed data. With so many requiring the insights, and a typical lack of a common data repository, the data and insights required sit with different stakeholders whose permission must often be secured before any single analysis can be conducted. 

Workforce engineering provides clarity not just on ownership, but also a future-focused view of which roles will be needed, the skills gaps that require filling, and how those roles and gaps will be filled. 

One team that perhaps most needs quality forecasts is Talent Acquisition (TA). The lack of a “line of sight” into future business or operational plans is all too often the reason the function is caught off guard when companies decide to expand, launch a new product, enter a new market, or pursue another strategic initiative that requires new or additional talent. This lack of insight often forces a reactive approach to recruiting once the need finally surfaces, resulting in longer hiring times, uneven candidate quality, and rushed interviewing and selection processes that leave both the business and candidates worse off. This is where workforce engineering offers a more intuitive and scalable path forward.

The process of workforce engineering

Workforce engineering starts with a simple premise: Create useful and accurate forecasts of staffing needs well in advance of their operational implementation. Achieving that purpose or mission requires attention to a handful of considerations that follow some critical steps:

1. Determine ownership 

The development of any new major capability or the start of a new initiative should always begin with assigning resources and oversight responsibilities to ensure it is structured and equipped to accomplish its purpose. The decision is most often based on the answer to a key question: who is the primary owner of the purpose and outputs of such analyses? If it is a people or talent purpose and output, and is thus best equipped to define the requirements, HR is often tagged as the owner. At the same time, considerations need to be made for who collects and has access to the needed data, is capable of conducting the analysis, and can most credibly report the outputs.

2. Plan from the work

Avoid the common trap of using the organization chart as the starting point for analyses. Instead of forecasting roles in isolation, begin with the critical business initiatives that will drive value over the next 12–36 months. New product launch? Digital transformation? Geographic expansion? Cost or workforce restructuring? These initiatives define the work that must get done. Even the more routine work of turnover replacement and organic staff growth belongs on this list, as it, too, deserves a deliberate plan rather than an afterthought.

3. Identify and assess skills

Translate the planned changes and initiatives into capabilities. What skills are required? At what depth? In what sequence? This step moves the conversation beyond job titles and into the language of outcomes. A marketing role, for example, may require advanced data analytics capabilities in one strategy and brand storytelling in another. The key takeaway in workforce engineering is that while the role name or title stays the same, the capability mix will change depending on the planned strategy or scenario.

4. Evaluate supply versus demand 

What internal capabilities exist today? Where are they strong? Where are they concentrated? Where are they at risk? This does not require perfect data, but it does require directional clarity. Even a 70% accurate view of capability gaps is more powerful than a 100% accurate headcount forecast that says nothing about skills. Building this picture in workforce engineering rests on two elements: employee skills tracking and management's understanding of internal demand and supply, as well as an assessment of external supply to understand what the labor market offers beyond the organization’s boundaries. Sources of both are explored in more detail below.

5. Establish governance 

To make the process scalable, clearly define ownership. The business owns the “why” — the strategic priorities. Finance owns the economic and budget guardrails. HR and Talent functions translate strategy into implications for skills and talent. Workforce engineering works best when it is cross-functional by design, not delegated to a single functional silo. The latter consideration points to the need for a governance group or council with shared responsibility for identifying and providing resources, approving and providing access, and establishing or leveraging an existing data repository (database, warehouse, lake, or mart), an analytic platform, and a reporting/visualization system. For many organizations, this points to a committee comprising HR, IT, Finance, and any shared or specialized Analytics team.

6. Build for adaptability

Instead of producing a static three-year forecast, create a rolling view that is refreshed quarterly. Focus on the few capabilities that truly differentiate the business rather than attempting to model every role and function in detail.

When done well, the benefits are tangible. Talent Acquisition gains line of sight and can build proactive pipelines instead of reacting to last-minute requisitions. Learning and Development makes investments in the capabilities that matter most. Finance gains confidence that workforce costs align with value creation. Leaders make trade-offs consciously rather than accidentally.

Most importantly, the organization shifts from simple, short-term headcount planning to capability planning. In a world where markets move quickly, and skills evolve even faster, that shift to workforce engineering is the difference between reacting to change and engineering the workforce required to lead it.

Data is a critical enabler

External labor market data offers important insights

For any of these workforce engineering efforts to succeed, it is critical to understand the company's existing skills and capabilities. If the organization has gaps, it is critical to know what the market for those skills and capabilities looks like. For example, is the labor market for those skills plentiful or rather niche? Is every company looking for the same skills and people, or are the organization’s needs unique (and in what ways)? Which other companies and industries are looking for the same? Are the skills needed quick to develop, or will they require significant time, experience, and formal training? What is the expected cost for acquiring and maintaining those role holders from a compensation standpoint? How much are companies paying for the skills and capabilities that people bring? What is the geographic distribution of the skills and capabilities? How many of each employee type are available in local markets? Where are there pockets or concentrations of people with the needed skills and proficiency levels?

Skills data creates a common language

Historically, companies have used jobs to define work that needs to be done. While jobs, as a construct, served HR well in the past, in the current environment where work constantly changes, some work ceases, or new work emerges, skills offer a more accurate means of defining requirements. Skills open up the aperture for deciding which capabilities are most critical, without getting hung up on a less accurate approach of defining job requirements by industry or sector. By focusing on skills, a company may identify adjacent industries where similar skills reside, thereby uncovering new sources of talent.

Sources of the needed data

The Bureau of Labor Statistics (BLS) has been collecting information about skills, capabilities, and jobs for years. In addition, it has built the occupational skills data framework. BLS provides structural and historical overviews of the labor market but focuses much of its content on the needs of job seekers as its users. Furthermore, while the data is publicly available and free, it is not always easy to find or organized in ways that make it easy to use. As a result, several vendors have developed tools to navigate the available data and provide additional data to further enhance insights into skills and capabilities. 

Some major workforce intelligence system provider examples include: 

Lightcast is a global leader in labor market intelligence and workforce analytics. At its core, the company collects, cleans, and translates billions of data points into a standardized, actionable map of the global economy. The platform bridges the gap between structural government-provided data and current labor market information by combining them with real-time web scraping and AI analytics.

TalentNeuron is a leading global provider of labor market intelligence and strategic workforce analytics. Similar to Lightcast, it serves as a foundational platform for enterprise companies, offering data-driven insights into global talent supply, demand, compensation, and skills. 

LinkedIn Talent Insights. While Lightcast parses general web profiles, LinkedIn relies on its native database of nearly 1 billion active professional profiles and millions of corporate pages. It provides real-time talent supply-and-demand charts, localized skill clusters, and explicit competitor benchmarking (e.g., showing where your competitors are poaching talent from).

Other high-value enabling technologies

A parallel category of workforce intelligence platforms has emerged to help organizations put labor market data to work. These Talent Intelligence Platforms (TIP) or Talent Experience Platforms (TXP) are orchestration layers that connect external market data, internal HRIS and applicant tracking systems, and, increasingly, AI-driven matching to surface insights that would otherwise take a team of analysts weeks to compile. The best platforms do three things well: they bring disparate data sources into one place, they support the full workflow from identifying a gap to evaluating options to tracking outcomes, and they extend the reach of talent search well beyond the business's traditional geographic footprint. Examples include (but are not limited to) Eightfold.ai, Beamery, and Phenom.

This matters most in skill-based hiring. When paired with the right data and tools, skill-based hiring opens the door to nontraditional candidates: people without a four-year degree, people from adjacent industries, or people whose resumes would never surface in a systems search built around job titles as relevant criteria. These pockets of hidden talent are often deep and underutilized, and they become increasingly necessary as the market for specific skills tightens.

Opening up the aperture further: Talent Strategy

Talent strategy (or talent planning) evaluates gaps between an organization’s existing skills base and its strategic and operational objectives. Workforce engineering considers those identified gaps and broadens the approach to filling those from an exclusive reliance on new hiring to a series of alternative options.

Skills and market data tell a company where it stands. The “6 B’s” framework, developed by Dave Ulrich and updated by Adam Gibson, helps business and talent leaders decide what to do about it. Rather than defaulting to hiring as the only lever, the framework lays out six distinct paths for closing a capability gap: 

• Buy: Acquire external talent to close gaps quickly
• Build: Develop capabilities internally through training and development
• Borrow: Hire contractors or consultants for temporary or specialized needs
• Bind: Keep critical employees employed through targeted retention efforts
• Bot: Automate repetitive work through AI and robotic process automation
• Bounce: Transition underperforming talent out of roles where they are no longer the right fit.

Layering the 6 B’s on top of skills and capability data changes the conversation. Instead of asking how many people to hire, organizations can ask which of the six levers is the fastest, cheapest, or lowest-risk way to close a specific gap. For example, filling a niche, hard-to-develop skill in a tight labor market often points toward Bind or Borrow. A commoditized, repetitive task often points toward a Bot rather than being filled by a human. A skill that is core to the business and reasonably teachable often points toward Build. Used this way, the 6 B’s framework fits into workforce engineering by completing it, translating a capability gap into a concrete, defensible action plan.

Relevant Practices & Tools

Emerging Workforce Planning Practices that Drive Broader Skills-based and Future-focused Staffing Projections

Emerging workforce planning focuses on the future with a highly refined level of detail, moving the analysis from roles and critical segments to specific skills that aggregate into organizational capabilities... more »

Projecting Future Headcount Demand Requirements from Business Plans and External Estimates. >

An important step in Core workforce planning is to generate a sense of what will be faced in the future when working to maintain the proper level of a workforce that is suited to meeting the business goals of the organization... more »

Developing a Winning Talent Strategy to Identify Key Capabilities and the Most Appropriate Workforce Mix. >

A talent strategy defines the talent needs and associated objectives necessary to meet top business goals. It is both an integral part of the HR strategic plan and a direct informer of the talent management strategy and planning process... more »

Assessing Current and Future Skills-based Requirements and Gaps to be Filled. >

Bringing workforce planning into a skills-based level of assessment requires cataloging the skills required by the positions to be included, identifying the availability of those skills in the current workforce... more »

The Employee Skills Survey Tool: Enable Employees to Record their Skills Using a Standardized Taxonomy and Proficiency Levels. >

A template for the individual employee to record their skills from a standardized taxonomy provided by the company with proficiency levels for each... more »