Workforce Strategies and Action Planning

Introduction

Human resource planning becomes strategically valuable when it moves beyond forecasting workforce numbers and determines how an organisation will obtain, develop, deploy, retain, transform or release talent. A workforce strategy is a coordinated pattern of decisions about people, work and technology that supports organisational objectives while managing cost, risk and employee consequences.

The central planning problem is not simply, “How many employees are required?” It is also:

• Which capabilities are needed?
• When and where are they needed?
• Should capability be built internally, bought externally, borrowed temporarily, redeployed, retained, automated or released?
• What financial, legal, ethical and operational consequences follow?
• How will implementation be monitored and corrected?

This chapter presents an integrated approach to these questions and translates strategic choices into staffing, development, retention, restructuring, budgeting and implementation plans.

Learning Objectives

By the end of this chapter, you should be able to:

1. Distinguish build, buy, borrow, redeploy, retain, automate and release strategies.
2. Select an appropriate strategy using capability, time, cost, risk and employment considerations.
3. Construct a workforce portfolio that closes a quantified capability gap.
4. Translate strategic choices into staffing, development, retention and restructuring actions.
5. Prepare a workforce budget that includes direct and indirect costs, including technology, contractors and licences.
6. Design implementation governance, measures and review points.
7. Evaluate ethical, legal and employee-relations implications.

1. Workforce Strategy as a Portfolio of Choices

A workforce gap exists when required future capacity or capability differs from the available supply. A simple numerical expression is:

where G is the gap, D is forecast demand, and S is available supply. Positive G indicates a shortage; negative G indicates a surplus. This equation is useful for headcount, but capability gaps also require analysis of skills, proficiency, location, timing and workload.

A complete strategy should therefore specify:

• Capacity: the amount of work that can be performed.
• Capability: the knowledge, skills, behaviours and experience required.
• Timing: when the capability must become available.
• Employment form: permanent, temporary, outsourced, contingent or technological.
• Cost and risk: financial, operational, legal, reputational and human consequences.

The seven strategies are not mutually exclusive. An organisation may buy scarce expertise immediately, build a longer-term internal pipeline, automate routine work and redeploy affected employees into higher-value roles.

Figure: Workforce strategy is a portfolio cycle rather than a one-time staffing decision.

2. The Seven Workforce Strategies

Build

Build means developing capability internally through recruitment into entry pathways, training, mentoring, job rotation, apprenticeships, succession planning or career mobility. It is appropriate when capability is strategically important, external supply is limited, and the organisation can tolerate development time.

Advantages include stronger organisational knowledge, engagement and succession depth. Limitations include delayed productivity, training cost and the possibility that trained employees leave. A build plan should identify proficiency standards, learning methods, supervisors, practice opportunities and assessment dates. Training completion alone is not evidence of capability; performance demonstration is required.

Buy

Buy means acquiring capability through external hiring, usually into permanent or fixed-term roles. It is suitable when the capability is urgently required or cannot reasonably be developed internally. Selection should assess validated job-related competencies rather than prestige signals or informal similarity to existing staff.

Buy decisions should include salary, recruitment, onboarding, relocation, benefits, managerial capacity and expected time to productivity. External hiring can also create internal equity concerns if new hires receive substantially higher rewards than comparable employees.

Borrow

Borrow means accessing capability without permanent employment, including contractors, consultants, agency workers, suppliers, freelancers, secondments and strategic partnerships. It offers speed and flexibility, but may create knowledge leakage, dependency, inconsistent quality, co-employment risk and higher hourly cost.

A borrow strategy requires a defined statement of work, deliverables, security rules, ownership of intellectual property, performance measures, supplier governance and an exit or knowledge-transfer plan. Contractor and supplier costs must not be treated as cost-free substitutes for employees.

Redeploy

Redeploy means moving existing employees from declining, surplus or lower-priority work into roles with greater demand. It can preserve organisational knowledge and reduce involuntary exits. Effective redeployment requires skills assessment, realistic retraining, employee consultation, location analysis and transition support. It is not merely an administrative transfer: the receiving role must have a genuine workload and the employee must be supported to become competent.

Retain

Retain strategies protect critical capability already present. They may include fair pay, career opportunities, meaningful work, manageable workloads, flexible work, effective managers, recognition, wellbeing support and professional development. Retention interventions should be targeted. Increasing pay for every employee may be expensive and ineffective if the main cause of turnover is poor supervision or limited career progression.

Retention risk can be prioritised using a qualitative matrix that considers role criticality and probability of departure. Privacy principles require that individual risk information be used carefully and not become a discriminatory label.

Automate

Automate means using technology, redesigned processes or artificial intelligence to perform or support tasks previously performed by people. Automation may close a capacity gap, improve consistency or allow employees to focus on judgement-intensive work. It does not automatically eliminate the need for human capability: implementation, monitoring, exception handling, cybersecurity, data governance and accountability remain necessary.

A sound business case compares the cost and risk of the technology with alternatives. It should assess data quality, algorithmic bias, explainability, accessibility, information security and the effects on jobs. Employees whose tasks are automated should be considered for redeployment and reskilling before release is considered.

Release

Release means reducing workforce capacity through attrition, redeployment out of the unit, voluntary separation, redundancy, retirement or termination for legitimate performance or conduct reasons. It should be the last element of a carefully justified plan where work has genuinely declined or capability requirements have materially changed.

Release decisions require legal compliance, objective criteria, consultation where required, accurate documentation, fair treatment, privacy protection and transition assistance. Managers must distinguish a role becoming redundant from an individual being poor at a role; these are different employment situations.

3. Selecting an Integrated Portfolio

A practical decision sequence is:

1. Define the demand gap by role, skill, location and date.
2. Test whether process improvement or workload reprioritisation can reduce demand.
3. Identify employees who can be redeployed or developed.
4. Protect critical capability through retention actions.
5. Compare build, buy and borrow for remaining requirements.
6. Evaluate automation for suitable tasks, not indiscriminately for whole jobs.
7. Use release only for validated surplus capacity and after alternatives are assessed.
8. Specify owners, costs, milestones, risks and review measures.

A weighted decision matrix can support judgement. For example, each option may be scored from 1 (weak) to 5 (strong) on speed, strategic fit, flexibility and employee sustainability. A weighted score is:

where W_j is the score for strategy j, w_i is the weight assigned to criterion i (with all weights summing to 1), and r_{ij} is the rating of strategy j on criterion i. The matrix structures discussion; it does not replace legal review, financial analysis or managerial judgement.

4. Translating Strategy into Action Plans

Staffing plan

A staffing plan states the role, number, location, employment form, start date, source, selection method and expected time to productivity. It should distinguish gross recruitment from net gap closure. For example, hiring ten people does not close a gap of ten if expected turnover is two and internal transfers remove three people from the relevant unit.

Development plan

A development plan identifies target populations, competencies, learning methods, practice assignments, assessment standards, budget and accountable managers. A useful sequence is diagnose → learn → practise → demonstrate → certify or assign. Development objectives should be observable, such as “complete a supervised customer-data analysis to the required accuracy,” rather than “understand analytics.”

Retention plan

The plan should link risks to interventions and indicators. Examples include critical-role pay review, manager coaching, career pathways, workload redesign and succession coverage. Indicators may include regretted turnover, internal fill rate, engagement in critical teams and successor readiness. These are signals, not proof of causation; they should be interpreted alongside qualitative evidence.

Restructuring and release plan

Restructuring should document the future operating model, affected work, role profiles, consultation stages, selection criteria, redeployment opportunities, support services and communications. Communication should be timely, truthful and respectful. It should explain what is known, what is not yet known and how employees can ask questions.

Implementation plan

A concise implementation register contains:

5. Workforce Budgeting and Total Cost

A workforce budget must include more than wages. A useful planning identity is:

The terms represent, respectively, employee compensation and benefits; development; external recruitment; contractors and contingent labour; redeployment; retention interventions; automation implementation; release and transition costs; technology infrastructure and implementation; supplier charges; ongoing software or platform licences; and governance, compliance and evaluation. Some categories may overlap in practice, so the budgeting team must define them consistently and avoid double counting.

For a multi-period plan, costs should be assigned to the period in which they are incurred. If discounting is required, the present value of a future cost is:

where C_t is the cost incurred at period t, r is the discount rate per period, and t is the number of periods. This expression assumes a known cash-flow timing and a constant discount rate; it is not necessary for a simple undiscounted annual budget.

A comparison should also include opportunity cost and risk. For example, a contractor may have a higher daily rate than an employee but avoid recruitment delay; an automation project may reduce repetitive labour but create implementation, licence, cybersecurity and maintenance costs.

6. Worked Application: Illustrative Retailer Portfolio

Background and problem

The fictional retailer Northstar Home is opening a specialist online-sales division. Its forecast requires 20 additional specialist positions within four months. Existing supply is insufficient, but some employees in closing store functions have transferable skills.

Portfolio analysis

The approved portfolio is:

The numerical gap is therefore fully covered. However, the six borrowed positions are temporary. If the division requires all 20 specialists beyond the peak, Northstar must decide before the contracts expire whether to retain, buy or build replacements. The portfolio closes the four-month peak requirement, not necessarily the permanent long-term requirement.

Action and control plan

The eight build participants receive protected learning time, a mentor and a practical assessment. The four hires are recruited using a structured, competency-based process. The six contractors receive clear deliverables, data-access limits and knowledge-transfer obligations. The two redeployed employees receive role-specific training and a 60-day transition review.

Northstar budgets recruitment and onboarding for the four hires, training costs for the ten internal employees, contractor fees for six people over four months, retention measures for critical supervisors, automation licences for workflow tools, supplier and security-review costs, and possible release-support costs in the closing store functions. It does not count automation as replacing six people unless the technology is operational and its productive capacity has been validated.

Useful measures include:

• percentage of 20 positions productive by the required date;
• time to proficiency by entry route;
• sales-service quality and error rates;
• contractor knowledge transferred to permanent staff;
• internal development completion and assessment results;
• regretted turnover in critical roles;
• cost per productive specialist, not merely cost per hire;
• employee-relations, compliance and customer-risk incidents.

Outcome and learning points

The portfolio is stronger than a single-source solution because it combines speed, internal development, flexibility and knowledge preservation. Its main risks are temporary dependency on contractors, uneven development outcomes and possible disruption in the closing stores. Quarterly review should determine whether borrowed work should be converted to permanent employment, whether automation is reliable, and whether redeployment has produced sustainable performance.

7. Governance, Ethics and Contemporary Issues

Workforce planning affects livelihoods and organisational power, so governance is essential. Decision makers should ensure:

• non-discrimination in recruitment, development, promotion and release;
• transparent and job-related selection criteria;
• consultation and statutory procedures where applicable;
• protection of employee and candidate data;
• human oversight of AI-supported selection or performance systems;
• accessibility and reasonable accommodation;
• fair treatment of contractors and avoidance of sham self-employment;
• safe working conditions and responsible workload design;
• documented approval for automation and release decisions.

Contemporary workforce strategies increasingly use skills taxonomies, internal talent marketplaces, people analytics, hybrid work and generative AI. These tools can improve visibility of skills, but data may be incomplete, outdated or biased. Predictive turnover systems should not be treated as objective truth. Employees should know how significant decisions are made, and organisations should provide review and appeal mechanisms.

A further issue is the changing boundary between employee, supplier and technology. Outsourcing can transfer activities but not necessarily accountability. An organisation remains responsible for protecting customer data, maintaining service quality and treating affected workers lawfully and fairly.

8. Challenges and Limitations

First, forecasts are uncertain. A strategy that is optimal under one demand forecast may be excessive under another. Scenario planning—such as high, central and low demand—can reduce overcommitment.

Second, headcount is an incomplete measure. Two employees may have different proficiency, availability and productivity. Workforce plans should therefore combine quantity measures with capability evidence.

Third, cost comparisons can be misleading when they omit transition time, supervision, technology licences, contractor management, quality failures or knowledge loss. Full-cost analysis is more defensible than salary comparison alone.

Fourth, strategy implementation may fail through weak line-manager ownership. HR can design frameworks, but operational leaders must provide work opportunities, feedback and accountability.

Finally, employees may resist change when communication is late or when automation is presented as inevitable. Participation, reskilling and credible redeployment options can improve both fairness and implementation quality.

Chapter Summary

Workforce strategies determine how organisations close capability and capacity gaps. Build develops internal talent; buy acquires external employees; borrow provides temporary or specialist access; redeploy moves existing employees to priority work; retain protects critical capability; automate changes the relationship between work and technology; and release reduces validated surplus capacity. Effective plans combine these options rather than treating them as isolated alternatives.

A defensible action plan links demand analysis to staffing, development, retention, restructuring, budgeting, governance and review. Quantitative closure must account for every strategy and distinguish temporary from permanent capacity. Total cost must include employee, recruitment, development, contractor, supplier, technology, licence, governance and transition costs. Ethical implementation requires objective criteria, legal compliance, privacy, consultation, human oversight and support for affected employees.

Key Terms

Workforce strategy: A coordinated plan for obtaining, developing, deploying and changing workforce capability.

Capability gap: The difference between required and available skills or proficiency.

Capacity gap: The difference between required and available volume of work capacity.

Build: Developing capability internally.

Buy: Acquiring capability through external hiring.

Borrow: Obtaining capability through contingent labour, suppliers or partnerships.

Redeploy: Moving existing employees into higher-priority work.

Retain: Actions designed to preserve critical employees or capabilities.

Automate: Using technology to perform or support work activities.

Release: Reducing workforce capacity through lawful and justified means.

Time to productivity: The period until a person performs to the required standard.

Skills inventory: A structured record of employee skills, proficiency and experience.

Succession planning: Preparing people to fill important future roles.

Retention risk: The likelihood and consequence of losing important capability.

Workforce portfolio: A deliberately combined set of workforce strategies.

Total workforce cost: The full direct, indirect, technology, supplier and transition cost of a workforce decision.

Redeployment: A planned transfer to another role or unit.

Knowledge transfer: The deliberate movement of expertise from one person or group to another.

Scenario planning: Testing workforce decisions against alternative future conditions.

Governance: Structures that assign authority, accountability, controls and review.

Review Questions

Short Answer Questions

1. What is the difference between a capacity gap and a capability gap?
2. Define build, buy and borrow strategies.
3. Why should automation not automatically be equated with job elimination?
4. Identify four cost categories that may be omitted from a narrow salary budget.
5. Why is redeployment more than an administrative transfer?

Long Answer Questions

1. Explain the seven workforce strategies and discuss when each is most appropriate.
2. Describe how an HR manager can translate a workforce strategy into staffing, development and retention plans.
3. Discuss the ethical and legal issues associated with release and restructuring.
4. Explain how a weighted decision matrix can support, but not replace, managerial judgement.
5. Evaluate the benefits and limitations of using contractors and suppliers in workforce planning.

Analytical / Application Questions

1. An organisation has a shortage of 30 cybersecurity specialists. Propose a portfolio using at least four strategies and justify the timing, risks and measures for each.
2. A company plans to automate a service process. Design a decision process that includes technology cost, ongoing licences, redeployment, employee consultation and service-quality controls.
3. Using the Northstar Home case, evaluate what should happen when the six borrowed specialists’ contracts expire. Compare retention, buy, build, automation and release-related alternatives.

Multiple Choice Questions with Answers

Question 1

A retailer requires 20 additional specialists. Its plan includes 8 built internally, 4 bought externally, 6 borrowed temporarily and 2 redeployed. How many positions are covered?

A. 18

B. 20

C. 22

D. 24

Correct Answer: B. 20

Question 2

Which strategy primarily involves moving existing employees from declining work into higher-priority roles?

A. Buy

B. Borrow

C. Redeploy

D. Release

Correct Answer: C. Redeploy

Question 3

Which item is explicitly part of a complete workforce total-cost identity for automation?

A. Only base salary

B. Only recruitment advertising

C. Ongoing software licence costs

D. Only employee engagement scores

Correct Answer: C. Ongoing software licence costs

Question 4

Borrowing capability is most commonly associated with which arrangement?

A. A permanent internal promotion

B. A contractor or specialist supplier

C. A compulsory retirement programme

D. A long-term succession plan

Correct Answer: B. A contractor or specialist supplier

Question 5

If forecast demand is 120 employees and available supply is 105, using G = D − S, what is the gap?

A. 15 surplus

B. 15 shortage

C. 225 shortage

D. −15 shortage

Correct Answer: B. 15 shortage

Question 6

Which statement best describes a build strategy?

A. Developing capability through internal learning and experience

B. Purchasing software licences

C. Reducing workforce capacity through redundancy

D. Using an external supplier for a peak period

Correct Answer: A. Developing capability through internal learning and experience

Question 7

In the weighted decision formula W_j = ∑(w_i × r_ij), what does w_i represent?

A. The strategy’s total headcount

B. The weight assigned to criterion i

C. The employee’s wage rate

D. The implementation period

Correct Answer: B. The weight assigned to criterion i

Question 8

Which measure best assesses whether a new hire has become effective, rather than merely been recruited?

A. Number of applications received

B. Time to productivity

C. Number of interviewers

D. Advertising reach

Correct Answer: B. Time to productivity

Question 9

Before releasing employees because of automation, a responsible organisation should first consider which action?

A. Destroying all workforce data

B. Redeployment and reskilling where feasible

C. Removing human oversight

D. Ignoring consultation requirements

Correct Answer: B. Redeployment and reskilling where feasible

Question 10

The Northstar Home case shows that six borrowed specialists are temporary. What must the organisation assess before their contracts expire?

A. Whether the roles should be retained, bought, built or otherwise covered

B. Whether all 20 positions were permanently filled by employees

C. Whether development costs can be recorded as zero

D. Whether temporary work automatically becomes redundant

Correct Answer: A. Whether the roles should be retained, bought, built or otherwise covered