5HR02 – Talent Management and Workforce Planning

Introduction

The report below focuses on workforce planning techniques and talent management methods, including labour markets, changing labour market conditions, and the recruitment and selection methods.

AC 1.1 Explain how organisations strategically position themselves in competitive labour markets.

Organisations strategically position themselves in competitive labour markets by adopting ways that attract the right labour force (Julio et al., 2024). Many companies accomplish this by assessing their competitor’s strengths and weaknesses in terms of employee experience, which greatly impacts ability, engagement, and retention. Organisations may face significant challenges in competing for talent due to new entrants and established players in the industry. Approaches such as employee branding, competitor analysis and becoming an employer of choice should be adopted to improve on competitive advantage.

Employee of Choice

Companies can build a strong competition for talent through becoming employer of choice, which is characterised by creating a suitable working environment that attracts and retains top talent (Kariel et al., 2024). This can be achieved by offering competitive salaries and benefits that align with the current industry standards. Additionally, the company should consider implementing employee wellbeing programs such as remote work, career progression seminars and wellness approaches. These approaches are instrumental in fostering an effective working environment that attracts and retains talent.

Employee Branding

Employee branding is the process of getting employees on board with the mission, values and vision of an organisation (Thang & Trang., 2024). It involves creating a positive image for current and potential employees, emphasising culture and employee experience. Companies can strengthen its brand by communicating profound values such as reliability, employee empowerment, innovation and inclusivity through various media platforms, including the social media. This is accomplished using the Employee Value Proposition (EVP) model. By branding, the company will become more appealing to top candidates and enhance employee loyalty and retention.

Competitor Analysis

A company can position itself in a competitive labour market by actively engaging in competitor analysis. This is the process of evaluating and understanding competitor’s strengths and weaknesses to gain insights into their strategies and improve your own business performance (Mohiya, 2024). For instance, a company can benchmark salaries, benefits and work conditions against those provided by competitors. This helps understand what attracts talented and equipped workforce. It also helps identify and improve gaps present in the organisations. Through this approach, an organisation will adopt advanced strategies that will allow them to stay agile and competitive in the labour market.

Competition in labour market is significantly increasing. A company can position itself to attract and retain skilled workforce by building a strong brand, becoming employer of choice and engaging in competitor analysis. These strategies will help a company stand out among companies and create a long-term and sustainable workforce (Piątkowski, 2020). However, if they fail to adopt the changes, they may struggle to attract qualified employees, posing a risk to service delivery and reputational damage.

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AC 1.2 Explain the impact of changing labour market conditions on resourcing decisions.

Labour market conditions are crucial in influencing how organisations make resourcing decisions (Vega et al., 2021). Labour market entails the balance between the demand for labour and its supply. They provide insights into how well the labour market is functioning, impacting unemployment rates and job availability. There are two main labour market trends which include tight and loose. Companies should adapt these approaches, which are crucial for maintaining efficiency, service delivery and competitiveness.

Tight Labour Market

A tight labour market occurs when there is a minimal availability of workers for an open job position, meaning the demand for the labour exceeds the supply (Brunow et al., 2022). Factors that may cause a tight labour market include an increase in retirement over a short period and an increase in skill gaps after turnover. In addition, tight labour market exists when there is a high demand for specialised skills than the available potential talent base. Advantages of tight labour market include improved job opportunities, better salaries, increased bargaining power among employees and a greater focus on employee retention. Disadvantages include talent shortage, high labour cost and increased workloads.

Resourcing decisions are significantly influenced by a tight labour market through determining employment approaches and considering long-term employment strategies. For example, a company may experience increased competition for skilled employees. Due to the high demand for qualified candidates, an organisation may need to enhance its recruitment strategy to attract more applicants. Additionally, scarcity of labour can lead to higher recruitment cost such as offering competitive salaries and allocating a higher advertisement budget for a position (Buchheim et al., 2020). Another impact of tight labour market is an increased focus on retention and internal talent development. This means that a company can work on retaining staff and offering career progression forums.

Loose Labour Market

Loose labour market refers to a situation where several job seekers compete for a limited number of job openings (Giupponi and Machin, 2024). These conditions enable organisations to be more selective when hiring for various positions. Factor that may cause loose labour market include high unemployment rates, economic downturn, digital transformation and seasonal labour demands. Advantages of a loose labour market include a wide talent pool, reduced labour cost and increased capabilities to business needs. Disadvantages include an increased staff turnover risk, job insecurity among employees and a mismatch of skills and job requirement.

Loose labour markets play a crucial role in resourcing decisions. One impact is lower recruitment costs and a high volume of qualified candidates (Bradley and Mann, 2024). This allows the company to spend less on job advertisements and reduce time spent on candidate selection. Additionally, a company will adopt skill-based hiring due to the large number of unemployed candidates. However, a negative impact of skill mismatch and complexity in the resourcing method may arise due to a high volume of applicants.

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AC 2.1 Analyse the impact of effective workforce planning.

Workforce planning is the strategic evaluation and management of an institution’s labour supply against its demand (Micheli et al., 2023). It involves analysing the workforce needs, identifying gaps in labour force and implementing solutions towards an organisational goal. Workforce planning ensures that people with appropriate skills are employed to deliver the company’s objectives. Benefits of workforce planning are reducing staffing costs, identifying changing customer needs, targeting inefficiencies, improved employee retention and high productivity. However, a disadvantage is the high cost of setting up workforce planning frameworks.

Workforce planning is essential since it allows the firm to accurately forecast the demand and supply of labour, especially during peak periods such as the festive season (Aldahmani et al., 2024). By analysing historical data and trends, the company can plan early recruitment campaigns by hiring contract labourers. This planning ensures business continuity; thus, reducing the risk of employee overload due to high demand.

Analysing the workforce can also help improve on employee acquisition and retention. Effective staff planning will enable an organisation to shift from reactive hiring to a strategic approach. The firm will identify existing skills gaps and forecast future talent needs, building a strong labour force (Heuser et al., 2022). Additionally, strategic planning supports retention by identifying high-performing workers and equipping them with sufficient training. This strengthens employee loyalty, engagement, and transparency.

Labour force planning plays a pivotal role in aligning the organisational goals with staff capabilities (Niyaz et al., 2025). The company’s goal may include expansion or introduction of new technological systems. Through labour force planning, companies can assess whether the staff have the necessary skills to support these changes or if up skilling is required. This ensures that the employee’s capabilities evolve with the industrial trends, which improves on the company’s productivity and innovation.

Although workforce planning offers a number of benefits, there are a number challenges faced during implementation. One of the issues is poor data quality and lack of clearly defined roles. This is seen when the organisation lacks accurate information on workers’ skills or capacity levels, leading to poor decision-making (Turan et al., 2022). Another challenge is resistance to change from both employees and employers; thus, hindering progress. A lack of a willing team to promote the workforce planning process may create a major setback at an organisation, resulting to slow incorporation of the plan, such as addressing the gap in skills. Additionally, lack of adequate time and resources constraints may hinder effective workforce planning at the organisation. Without sufficient resources and funding, the workforce planning process risks not being implemented especially during peak periods. To overcome these challenges, companies should invest in better systems, foster a planning culture and ensure collaboration among all its stakeholders.

AC 2.2: Evaluate the techniques used to support the process of workforce planning.

AC 2.3: Evaluate the strengths and weaknesses of different methods of recruitment and selection to build effective workforces

AC 3.1: Discuss factors that influence why people choose to leave or remain in organisations

AC 3.2: Compare different approaches to retaining people.

AC 3.3: Explain the impact of dysfunctional employee turnover.

AC 4.1: Assess suitable types of contractual arrangements dependent on specific workforce need.

AC 4.2: Explain the benefits of effective onboarding.

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References

Aldahmani, E., Alzubi, A., & Iyiola, K. (2024). Demand Forecasting in Supply Chain Using Uni-Regression Deep Approximate Forecasting Model. Applied Sciences, 14(18), 8110. https://doi.org/10.3390/app14188110

Bradley, J., & Mann, L. (2024). Learning about labor markets. Journal of Monetary Economics, 148, 103612. https://doi.org/10.1016/j.jmoneco.2024.103612

Brunow, S., Lösch, S., & Okhrin, O. (2022). Labor market tightness and individual wage growth: evidence from Germany. Journal for Labour Market Research, 56(1), 16.

Buchheim, L., Watzinger, M., & Wilhelm, M. (2020). Job creation in tight and slack labor markets. Journal of Monetary Economics, 114, 126-143. https://doi.org/10.1016/j.jmoneco.2019.02.006

Giupponi, G., & Machin, S. (2024). Labour market inequality. Oxford Open Economics, 3(Supplement_1), i884-i905. https://doi.org/10.1093/ooec/odad039

Heuser, P., Letmathe, P., & Schinner, M. (2022). Workforce planning in production with flexible or budgeted employee training and volatile demand. Journal of Business Economics, 92(7), 1093-1124.

Julio-Rospigliosi Porretti, V. D., Borda Mendoza, V., Bosmans Flores, F. G., Hermoza Peralta, A., Mejía Mendívil, Á. M., & Moscoso Cuaresma, J. R. (2024). Competitiveness, labour market and protection of the right to work in the member countries of the Pacific Alliance. Cogent Social Sciences, 10(1), 2376170. https://doi.org/10.1080/23311886.2024.2376170

Kariel, J., Schneebacher, J., & Walker, M. (2024). Competition policy and labour market power: new evidence and open questions. Oxford Review of Economic Policy, 40(4), 787-807. https://doi.org/10.1093/oxrep/grae042

Micheli, G. J. L., Martino, A., Porta, F., Cravello, A., Panaro, M., & Calabrese, A. (2023). Workforce planning in project-driven companies: a high-level guideline. Frontiers in Industrial Engineering, 1, 1267244. https://doi.org/10.3389/fieng.2023.1267244

Mohiya, M. (2024). What constitutes an employer of choice? A qualitative triangulation investigation. Human Resources for Health, 22(1), 41.

Niyaz, M. T., Qorri, D., Kovács, K., & Csilla, J. (2025). Research Trends in Workforce Planning in the Automotive Sector: A Comprehensive Review. Administrative Sciences, 15(4), 140. https://doi.org/10.3390/admsci15040140

Piątkowski, M. J. (2020). Expectations and challenges in the labour market in the context of industrial revolution 4.0. The agglomeration method-based analysis for Poland and other EU member states. Sustainability, 12(13), 5437. https://doi.org/10.3390/su12135437

Thang, N. N., & Trang, P. T. (2024). Employer branding, organization’s image and reputation, and intention to apply: the moderating role of the availability of organizational information on social media. Frontiers in sociology, 9, 1256733. https://doi.org/10.3389/fsoc.2024.1256733

Turan, H. H., Jalalvand, F., Elsawah, S., & Ryan, M. J. (2022). A joint problem of strategic workforce planning and fleet renewal: With an application in defense. European Journal of Operational Research, 296(2), 615-634. https://doi.org/10.1016/j.ejor.2021.04.010

Vega-Gutierrez, P. L., López-Iturriaga, F. J., & Rodriguez-Sanz, J. A. (2021). Labour market conditions and the corporate financing decision: A European analysis. Research in International Business and Finance, 58, 101431. https://doi.org/10.1016/j.ribaf.2021.101431