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Strategic workforce planning means deciding what skills your organization will need before you need them. You need to identify the skills your organization needs now and in the future and ensure you have them in place when you need them.
It’s less stressful than the traditional reactive approach of scrambling to find and hire the right talent after a need arises. It’s also a more effective way to navigate the challenges that Canada’s aging workforce and ongoing skills shortage represent, as well as the impact that AI will have on the way we work.
If you’re a Canadian business leader interested in strategic workforce planning and don’t know where to start, this guide can help. We’ll explain how to develop a successful plan, what the common pitfalls are, and how the right HR platform can unify your data and better inform your decision-making.
Canadian businesses are adapting to an evolving employee market that makes strategic workforce planning more important than ever before
Strategic workforce planning involves three interconnected steps: understanding the skills you currently have, forecasting what you'll need, and deciding how to close the gaps
AI will continue changing the way we work, so it should inform strategic workforce planning efforts
Disconnected people data across HR, finance, and other areas is the most common reason workforce plans fail
Bringing all of your people data into a single, connected platform makes every part of the process more reliable
It’s reasonable to argue that Canada’s employment market is changing on an unprecedented scale. From a demographic perspective, Statistics Canada reports that the proportion of the Canadian labour force aged 55 or older has doubled since the early 2000s. At the same time, the overall labour force participation rate has trended downward, and will likely keep falling until the 2030s, when the youngest baby boomers reach retirement age.
Despite relatively high immigration rates offsetting some of the decline, Canadian businesses are struggling to find the talent they need. ManpowerGroup Canada reports that 71% of local employers say the talent shortage is making it difficult for them to fill roles, more than double the 32% recorded a decade ago.
AI is also likely to impact how businesses hire in the coming years. According to Statistics Canada, 60% of Canadian workers could experience some changes to their jobs as a result of AI, and 31% could be heavily impacted.
While some of these changes may be relatively temporary, others (like AI) are likely to have a lasting impact on who you hire and why. That’s why it’s increasingly important to know how you’ll handle hiring moving forward, both in the medium and long-term future.
The concept of strategic workforce planning is relatively straightforward. It involves understanding where your business is headed in the next one to three years, and then figuring out what skills and people you’ll need as part of that journey.
Of course, the detail is where it gets harder. The following three-stage process helps you understand what those details are and how you can start pulling them all together.
It’s difficult to think about where you want to be if you can’t clearly identify where you are right now. That’s why the first stage in strategic workforce planning is assessing the skills you currently have in your organization. This can include developing a detailed skills inventory, which we’ll explain below, as well as taking into account who might leave in the near future (for example, who is nearing retirement).
To create a skills inventory, you need to look beyond simple job titles and create a catalogue of what each employee can do, what they’re good at, what training they’ve completed and certifications they hold, what experience they bring from previous jobs (if it’s over and above what they currently do), and any additional career progression notes.
With baby boomer retirements well underway and expected to continue into the 2030s, there are some critical things to consider. First, this likely means you’ll have to fill many senior positions in the years ahead, and their departures may create specific skills gaps that will be difficult to bridge. Identifying these early on can help you prepare.
You should consider whether the business has any succession plans in place to cover expected retirements. In effect, you want to understand how your existing talent is going to change in the near future, as that will inform both this step (what you have now) and the next step, which is forecasting.
Demand forecasting involves taking your organization's 1–3-year business plan and translating it into a specific headcount plan that can meet those needs. To begin, think about the specific changes that may occur in your business and the staff you’ll need to handle them. Some examples could include expanding into a new province, launching a new product line, or adopting a new technology platform.
Beyond those well-defined changes, you’ll also need to consider some variables, and that’s where scenario planning can help. Scenario planning involves considering the worst-case, best-case, and average situations, and then working out how those will affect your staffing requirements. The US-Canada trade relationship is one example, or, on a more general level, your company’s growth forecast could be another.
Once you combine the known changes to your business with your best, worst, and average-case scenarios, you’ll have a pretty good idea of the staffing requirements you’ll need to address in the future.
“Build vs. buy” describes the two options you have to meet your future staffing needs. You can either “build” your existing talent by establishing an upskilling program or “buy” talent from outside the business, either through domestic or international recruitment and hiring.
Training your existing staff can often be more cost-effective than hiring externally, especially when the role involves niche or in-demand skills. Another advantage is that you’ll be retaining corporate knowledge that can be more difficult to acquire. One downside is that training could take anywhere from 12–24 months, depending on the specific skill, so it may not be appropriate if your need is more urgent.
When you’re hiring externally, there are specific challenges to be aware of. As mentioned earlier, many Canadian businesses are struggling to find the talent they need. The skills shortage is more acute in several sectors, including STEM, health care, construction, and technical trades.
Hiring internationally is an increasingly popular option that gives you access to a much wider pool of candidates, but you need to be mindful of work permit laws. Engaging an employer of record is one solution to this challenge, as they’ll be familiar with both federal and provincial employment laws.
Many businesses find that a combination of upskilling internal staff and hiring externally is the most practical way forward, but there’s no right or wrong answer. As long as you’ve identified any future skills gaps and have a plan in place to address them, you’re already achieving the main goal of strategic workforce planning.
AI is having such a significant impact on strategic workforce planning that it deserves its own section, but that doesn’t mean it should be considered separately. Understanding what roles can be automated both now and in the future should form an integral part of each of the three stages outlined above.
If your business is already using AI in some capacity, this should form part of your current skills assessment. Essentially, you should think of it as another “employee,” but one that might be capable of filling several roles.
The main point to understand is whether automation will be a part of your business and, if so, where it will fit in. To do this, you can apply a process known as “task decomposition,” where you break each role into its constituent parts. This allows you to understand what percentage of a role could be automated and what realistically still requires the judgment and problem-solving abilities of humans.
For example, you may discover that AI tools could perform 30% of a position, which will give a team member more time to focus on other tasks. This will raise new questions. Do you combine that position with another? Will your current employee require additional training?
It’s also important to recognize the speed at which AI-powered tools are advancing, because it’s very likely that they’ll be capable of far more in, say, three years compared to what they can do today. That’s why strategic workforce planning is an ongoing, iterative exercise.
Finally, AI isn’t solely the domain of your IT department. To develop an effective strategic workforce plan, IT and HR need to work together.
McLean & Company underscores the importance of this approach in its HR Trends Survey 2026: "AI adoption is already underway, but only when HR and IT work together will organizations realize the value of AI… HR is essential to overcoming these barriers through change management, targeted talent development, and proactive workforce planning."
This leads us into the next section, which details one of the most common pitfalls of strategic workforce planning.
The process described above relies on information from across your business, including employee information, business planning, financial projections, and IT implementation. Different departments are responsible for that information, and it resides on different platforms, creating issues before the strategic workforce planning process has even begun. To illustrate the point, we created the following table:
The Fragmented Data of HR, Finance, and Line Managers
Team | What they own | Where it lives |
|---|---|---|
HR | Skills data, succession plans, people data, headcount records | HRIS, spreadsheets, performance tools |
Finance | Budget models, salary data, headcount budgeting approvals | ERP, financial planning tools |
Line managers | Operational skill needs, team performance, role requirements | Project tools, email, their own judgment |
Consider the following scenario (which is all too common). An HR department creates a strategic workforce plan that includes adding 10 new people over the next 18 months, and it’s working within a budget that was agreed upon at the start of the financial year. Meanwhile, the finance team has revised its budget in light of global events, but HR is unaware of these changes.
In the IT department, a new AI system has been implemented that automates some sales and outreach efforts, but this is still in the trial stage. The IT team intends to fill the HR team in on the new system once the trial is complete.
Finally, several department heads have held preliminary meetings about restructuring, and senior management has given in-principle approval. They plan to meet with HR in the coming weeks to pass on their new requirements.
In effect, the strategic workforce plan developed by HR is out of date before the proverbial ink has dried. Information silos are the problem, as each part of the business is unaware of what others are doing.
A unified HR platform helps to solve many of the issues described above by bringing together all the information necessary for effective strategic workforce planning. This can include people management, payroll, recruitment, business planning, and IT.
The advantage of an all-in-one platform is that it creates a single source of truth for all stakeholders to work from. This not only reduces the confusion highlighted above, but it also fosters a more cooperative environment.
Take succession planning as a very real and current challenge for many Canadian businesses. This is a key part of strategic workforce planning, but it often relies on little more than a spreadsheet and one or two conversations with department heads. By bringing this under a unified platform, HR can work with department heads to identify the most suitable future leaders and then establish a training and development plan that everyone can track.
It’s worth pointing out that many HR systems claim to be all-in-one solutions, but some simply bundle separate tools that don’t truly talk to one another, while others may have a more restrictive definition of what an “all-in-one” platform can do. When assessing different options, it’s helpful to request a demo from each vendor.
Strategic workforce planning is an ongoing and iterative process, rather than something you do one time each year. The three-step process should be the foundation of your efforts, but you can also use the following sense checks to assess how your plan is progressing:
The first two steps of your strategic workforce plan involve a skills gap analysis, so a simple and effective way to test how your plan is performing is to check whether you’re filling roles in a timely manner, as opposed to having multiple unfilled positions.
If it’s the latter, you’ll need to analyze why things aren’t progressing as planned. Have budgets changed? Does your internal learning and development program need attention? Are you struggling to find talent domestically? If so, do you need to engage an employer of record to source staff internationally?
It’s important to note that a role isn’t truly filled until the person is performing at the level the role requires. For example, an external hire may take significantly longer to familiarize themselves with the company’s processes compared to someone who was promoted internally.
The result of this analysis could inform how you proceed in the future. On one hand, you may discover that your plan called for the majority of people to be sourced from outside, but they’re taking much longer to learn how your business operates compared to those who’ve been internally reassigned. Alternatively, you may find that external hires are performing faster than expected, so that becomes a more viable option going forward.
Either way, this part of your evaluation requires an HR system with strong performance tracking and management capabilities.
Senior management will almost always be most interested in how much their workforce is costing and whether it’s more or less than expected. You may have hired more people than you planned, or in-demand skills may be commanding higher salaries. Either way, you’ll need to understand what’s happening, both to revise your plan and to explain the reasons to management.
Having unified finance and HR data makes it much easier to gain an accurate understanding, and it makes the process much more efficient. Rippling’s own workforce analytics tools allow data to be drawn from across the organization, ensuring that everyone is working from a single source of truth.
The payoff is time. Rippling's State of HR report found that 90% of HR leaders spend more than a quarter of their day on admin, time most would rather spend on strategic work like workforce planning. Unifying your data is how you claw some of that time back.
Fragmented, inaccurate, or incomplete data is the natural enemy of strategic workforce planning. Rippling’s unified workforce management platform was built from the ground up to solve exactly that problem. It draws data from HR, payroll, finance, and IT, so all parts of the business are working from a single source of truth.
Let’s look at how Rippling has improved HR operations in the real world.
International fitness and lifestyle brand Barry’s has over 100 locations in 15 countries and a growing team of 1,400 employees. Many staff members are employed on an hourly basis, creating a highly dynamic and complex workforce that requires a powerful and flexible HR management solution.
Before engaging Rippling, the company worked with multiple disconnected tools that covered human capital management (HCM), applicant tracking systems (ATS), scheduling, time tracking, and benefits.
Rippling’s unified workforce management solution helped Barry’s streamline and simplify internal processes while improving internal analytics and reporting.
Before Rippling, reporting on retention was basically inaccurate and manual. We could only make manual spreadsheet reports and filter out the transfers versus true terminated employees. Now we can just update their entity in Rippling and keep that data.
Vanessa Sarne
Senior Director, Employee Relations at Barry's
Looking to the future, Barry’s is exploring several custom developments with Rippling, such as unique pay guidelines. The company’s initial implementation covered payroll, time and attendance, scheduling, and benefits administration as core modules. It now plans to add performance management, headcount and compensation planning, goals, and advanced surveys.
We could see from our conversations that Rippling’s team was willing to partner with us. They helped us build what we needed for our instructors’ classes and bonuses in a Custom App. Implementation was really well-assisted, and the communication’s been great.
Vanessa Sarne
Senior Director, Employee Relations at Barry's
Read the full Barry’s case study.
The core theme of this article is information management. Strategic workforce planning relies on data from multiple parts of your business. If that information is unreliable or out of date, you’ll always be working in the dark.
Whether you’re new to strategic workforce planning and unsure where to start or you’re already doing it but having limited success, our advice remains the same: Organize your data first, and the rest will be much easier. To learn how our unified workforce management platform can help, request a demo. Our team will be happy to walk you through all the capabilities.
We suggest revising your strategic workforce plan every quarter, at a bare minimum. Things like immigration and employment regulations often change several times each year, and the global situation is also increasingly uncertain. The most successful businesses treat strategic workforce planning as an ongoing process, constantly testing previous assumptions and revisiting previous decisions.
While HR is typically responsible for workforce-related decisions, strategic workforce planning encompasses business strategy, financial planning, and even the IT systems your company plans to adopt. As a result, strategic workforce planning belongs to both HR and finance, and it’s usually more successful if both departments view it as their responsibility.
Task decomposition is the most useful approach for this. Rather than planning at the job-title level, break each role into its component tasks, and then assess which ones require a human touch and which are realistic candidates for automation. This will not only help you identify which roles you need, but also the duties those roles will entail.
Building this into your demand forecasting will ensure that your plan accounts for future AI capabilities, rather than treating them as something to consider later.
Headcount planning is about the numbers: how many people you need, in which roles, and at what cost. Strategic workforce planning is a deeper analysis of the skills you’ll need to meet the long-term strategy of your business, which then feeds into headcount planning.
Disclaimer
Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting, and legal advisors before engaging in any related activities or transactions.
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