Sourcing talent is tough—and it’s only getting tougher.
70% of managers report their workforces lack basic competencies. 40% of companies struggle to retain skilled workers, while 50% cannot afford to upskill existing employees.
This is bad news for many reasons. Poor skills and high turnover destroy morale, dent productivity, and make it hard to respond to market shifts.
Our secret tip? Okay, it’s not really a secret, but it seems to be so unused at times that it feels like a secret: talent planning.
This guide explores how talent planning works and how to gain actionable insights to plan your talent needs. You’ll be hiring stellar candidates and strengthening skill sets in no time.
TL;DR—Key Takeaways
- Talent planning predicts future talent needs, ensures new hires meet strategic goals and manages existing talent to boost skills and minimize employee turnover.
- Strategic planning allows you to respond to market shifts and stabilizes your workforce.
- Planners must maintain a broad talent pool and assess candidate skills when hiring.
- Talent pipelines source high-quality candidates for open roles, while development programs identify future leaders.
- Talent planning is a dynamic process, not a set-it-and-forget-it measure. Talent planners should audit skills and recruitment annually as new gaps quickly emerge.
What is talent planning?
Talent planning predicts the skills your organization will need in the future, nurtures existing talent and ensures recruiting processes meet your strategic goals.
The best planning processes start with a core focus on critical skills and capabilities. Without those skills, projects buckle and fail. Productivity dips, and competitors speed ahead.
The trouble is, skills aren’t static. Talent needs change with market shifts, tech developments, and long-term demographics. The skill mix you have now probably won’t be ideal or even relevant in five or even two years.
To get around this, Agile companies plan and anticipate future needs. Talent planning helps by:
- Identifying current and upcoming vacancies
- Defining core skills for each role
- Developing skills internally via training and mentoring
- Hiring candidates to fill skills gaps
- Reducing employee turnover and encouraging talent retention
Talent planning vs. talent management vs. workforce planning
Before we examine talent planning in more detail, it’s important to explain how it relates to similar human resources concepts you’ve probably heard.
The closest relations to talent planning are talent management and workforce planning. All three contribute to smooth hiring and managing skills in slightly different ways.
Talent management vs. talent planning
Talent planning is about assessing and forecasting future needs. It’s a dynamic process of analyzing skill requirements over time. By “dynamic,” we mean it never really stops. After all, skill needs don’t stand still.
Talent planners examine whether companies effectively retain and hire talent. They suggest ways to handle high-performing talent more efficiently and use long-term data to track retention over time.
Talent management is a holistic approach that covers every aspect of HR. Talent managers assess the stages of the employee lifecycle, from hiring through onboarding, promotions, lateral opportunities, and succession.
Talent management focuses on ensuring employees are happy, productive, and fit for their roles. While planners crunch numbers and make projections, talent managers carry out performance management and create enriching career paths. They’re more involved in the day-to-day.
| Talent management | Talent planning | |
| Focus | Covers the entire employee lifecycle from recruitment to retirement. | Anticipating and preparing for future talent needs. |
| Components | Involves recruitment, onboarding, performance management, learning and development, succession planning, retention strategies, and compensation. | Emphasizes workforce analysis, demand forecasting, supply forecasting, gap analysis, and action strategies. |
| Goal | Employees that feel supported, satisfied, willing to do their best and grow within the organization. | Ensures the organization has the right people in the right roles, now and in the future. |
Talent planning vs. workforce planning
Workforce planning assesses a company’s overall talent needs, starting with understanding its strategic objectives. Planning supports that strategy, including training, employee compensation, and addressing skills mismatches.
Talent planners focus on retaining and sourcing skills. Their work supplements workforce planners, ensuring the company has the talent it needs at all times.
Successful HR teams blend talent management, talent planning, and workforce planning. But here’s the thing: it’s important to treat talent planning as a separate strategic task—not just another item on the HR to-do list.
| Workforce planning | Talent planning | |
| Purpose | It’s a process that matches business and staffing needs to ensure an organization has the right people, in the right places, at the right times. | Talent planning focuses on the strategies used to attract, retain, develop, and utilize the workforce and forms part of the broader workforce planning strategy. |
| Scope | Involves analyzing current capabilities, forecasting future workforce needs based on business goals, and creating a plan to bridge any gaps. | While workforce planning might identify that you need five more engineers next year, talent planning will establish how to find, train, and retain those engineers. |
| Components | Includes aspects like: • Forecasting future staffing needs based on business objectives • Analyzing current demographics and skills • Identifying gaps and skills shortages • Planning for situations like employee turnover, promotions, or market shifts | Talent planning strategies focus on: • Recruitment strategies • Training and development • Succession planning • Retention initiatives • Employee value proposition and branding |
Benefits of talent planning
A quick run through the benefits ledger shows why talent planning is so valuable.
Talent planning supports business goals through alignment
Having the right talent is essential to achieving your business goals. Talent planners use goal-driven methods to align human resources with strategic aims. This makes it easier for HR to serve business strategy and for strategists to manage HR needs.
Top tip:
Example: A tech company aiming to expand into AI can align its talent strategy by recruiting and upskilling employees with AI expertise. This will reduce hiring costs and accelerate the time to market for new products.
Talent planning supports innovation by anticipating skill gaps
As industries and technologies evolve, new skills emerge while others become obsolete. This is a massive issue, with the World Economic Forum reporting that 44% of workers’ skills will be disrupted over the next five years.
Companies that identify talent gaps early on can plan their needs more strategically. They can ride the wave of innovation instead of being overwhelmed.
Talent planning leverages specialized skills for growth and expansion
Expanding into new markets or products demands talent that understands those spaces. Talent planning allows you to seize growth opportunities without disruption.
Top tip:
Example: A company selling business process software wants to add a Customer Relationship Management (CRM) tool to its product family. They’ll need a CRM expert on board to ensure the platform’s design and functionality cover all possible use cases.
Talent planning boosts retention
When talent teams understand the roles and skills their company needs, they can provide relevant career paths and development opportunities for their employees.
Upward mobility has huge business benefits. Companies offering routes to career progression see up to 34% higher retention rates. Meanwhile, 61% of US workers leaving their posts cite a lack of career advancement opportunities.
Talent planning reduces hiring costs
When hiring the right talent goes wrong, it can be a costly mistake. Effective, long-term talent planning helps companies source the right number of staff.
That’s not all. Planners also focus on finding candidates who are a good fit. A bad culture fit (which we’re now calling culture add) could lead to new arrivals leaving within their first month, hurting morale, denting productivity, and incurring unnecessary expenses.
Talent planning increases stability through leadership succession
Employees grow, take up leadership roles, and, at some point, move on from the company. To ensure continuity in key leadership positions, companies must nurture and mentor internal candidates to take over when leaders retire or leave.
Top tip:
A 9-box grid can support your succession planning process by comparing individual performance with potential and earmarking the most appropriate candidates for your succession program.
Talent planning achieves organizational resilience
Finally, companies that use talent planning are better prepared for global or industry changes. For instance, the massive uptake of AI-driven business software will change how we relate to customers and build systems.
Talent planning builds resilience in cases like this by cultivating a diverse talent pool and strategically developing skills.
Key elements of a talent planning strategy
The benefits above sound appealing, but we need to go further. At the moment, talent planning is just a strategy—a set of ideas and nice-to-have advantages. We need to explore how to implement talent planning in real-world businesses.
Talent planning requires a systematic approach, so a planning framework is vital before you start collecting data or assessing skills. Check out the core components of a successful framework.
Workforce analysis
Workforce analysis is the beating heart of successful talent planning. Data-driven metrics are your friend here, allowing you to capture in-house skills, productivity and engagement levels.
You’ll understand if your workers actively engage in your training and skill-building programs and how they’re progressing. You’ll also obtain insights as your cohorts age or pivot careers.
Data analysis also identifies current strengths and weaknesses in relation to your business strategy.
Top tip:
Example: When launching a new tech product, you’ll require a bunch of new engineers or marketers. Knowing your current skills is a great starting point for recruiters to plug gaps with the right candidates.
Future talent needs forecast
Knowledge about your workforce helps you forecast future needs. Skilled talent planners pair workforce data with strategic requirements and market trends.
Top tip:
Example: A retail company needs to hire seasonal staff every year for the holiday rush. They analyze past hiring data and market trends to forecast how many employees they’ll need, in what roles, and with what skills.
Candidate sourcing
Another core talent planning challenge is sourcing suitable candidates from your internal and external talent pool.
- Internal candidates are a rich source of talent, and you won’t need to worry about cultural fit since they’re already embedded in your organization. Training and promotions boost morale and employee engagement, where everyone focuses on improving their skills and progressing within your organization.
- External sourcing is often necessary—especially when staffing new product teams or regional offices. External talent acquisition adds fresh ideas and diversity.
In practice, it’s best to use both sourcing approaches in a talent pool management strategy. Here’s how:
- Keep a database of employee skills and candidates in your talent pool.
- Use skills testing to create a reservoir of prequalified candidates and keep them engaged with tailored content.
- Stay active on social media and at public events to ensure your employer brand has maximum reach.
Talent recruitment
The next step in successful talent planning is filling roles strategically. You need the right people in the right roles at the right time, so a streamlined hiring plan is essential.
If your talent pool is in good shape, recruiting will be much easier. Leverage internal and external contacts using data-driven insights to shortlist potential hires. Invite top talent to apply and sweeten the deal with personalized messaging.
Even with a slick talent pool, you will still likely rely on traditional job postings. Craft appealing, accurate descriptions for each role that sell your employer brand and focus on critical skills. Advertise roles where talent hangs out, whether niche websites or social media.
Focus on candidate assessment, too. Use strategic interview questions to assess cultural fit and skill levels. Blend interviews with homework assignments and skill tests to understand candidate strengths (without overloading their schedules).
Above all else, deliver a smooth candidate experience. The brightest talent expects a lot from employers. Poor communication, lifeless messaging, boring assessments, or chaotic scheduling won’t cut it.
Employee development
The final critical element of talent planning involves getting more from existing talent. The best companies know the value of human capital. They hate losing skilled employees through frustration or poor treatment.
Investing in career development is a no-brainer, but retention strategies need a strategic approach. Skills training tends to come before promotions, so training should relate to future roles and responsibilities. In other words, training follows individual career plans.
Talent retention
Talent retention is all about offering perks and benefits that your employees will find it hard to turn down, even if they are offered a job elsewhere. Every measure should build a culture of continuous learning, filled with opportunities for high-potential employees.
Pairing current employees with seasoned professionals in mentoring partnerships allows them to gain experience while expanding their personal networks. Similarly, paid time off gives your people the space to obtain qualifications and undertake reskilling challenges.
What does a successful talent planning process look like?
Successful companies analyze, recruit, and retain talent differently, so don’t worry too much about fitting your talent planning exactly to the elements above.
However, experience has taught us the importance of taking a systematic approach to assessing our talent needs. We think others could benefit from our lessons when implementing talent planning.
1. Align your talent goals, objectives, and business strategy
Start by aligning your talent goals with your business objectives. You might ask questions like:
- How can we achieve (and measure) business success in two or five years’ time?
- Do we want to increase your market share, reach profit targets, or expand our global reach?
- Do we want to add a radically new technology to our operations?
Talent planning should source the right skills to achieve those goals. Everything else is secondary.
Top tip:
Example: A real estate company decides VR showings are what tomorrow’s buyers want. To create these, they need the skills of in-house expert modelers and designers. Agents also need to learn new promotional techniques.
2. Evaluate employee performance to identify skills gaps
You probably already have a stellar portfolio of skills and potential. That’s why mapping your existing talent landscape is our second tip for checking whether you already have the skills you need in-house or need to bring in new hires.
Performance management tools assess core competencies for each role to gain an accurate snapshot of current abilities linked to existing roles.
Combine tests with surveys and interviews to assess job satisfaction, engagement, and cultural fit. Cross-reference with sales or other performance data, then use the outcomes to discover urgent skills shortages or mismatched employee placements.
Performance evaluations also guide talent development initiatives. They identify employees with the drive and need to improve—before you start tinkering with job ads.
3. Create a talent pipeline based on critical hiring needs
Of course, HR professionals can’t fill every skill gap internally. That’s why we recommend creating a talent pipeline to pick up the slack when talent development falls short.
Dynamic talent pipelines draw from talent pools filled with elite candidates. To keep your pool relevant, regularly update your contacts and prequalify pool members with tests (or previous application processes).
Organize your talent pool to meet strategic needs. For example, if you anticipate a spike in AI engineer roles, keep a file of leads with AI-related skills to check first when recruiting engineers.
Screening and assessment are critical here. Video interviews, automated resume screening, homework assignments, and skills tests identify candidates with suitable skill sets. Be sure to use strategic interview questions that focus on the fine details, sifting your final shortlist to a handful of perfect hires.
4. Invest in talent development to upskill top performers
Talent planning isn’t just about hiring well but about nurturing and upskilling internal talent and encouraging employees to participate in career development pathways.
If you capture their imagination, many benefits follow.
Talent development fosters a culture of aspiration as employees seek advancement. Employees engage with your brand and company mission, knowing they will be rewarded. Hiring spend should even decrease as internal recruitment is almost always cheaper than scouring the job market.
How you develop talent depends on your needs. We like tailored career plans for all employees, support for upskilling, and tangible rewards for people who improve their skills. We also offer tips to employees to empower them to take ownership of their career development. 👇
Top tip:
Pay close attention to top performers—people who constantly overdeliver and innovate without needing constant sign-posting from managers. Model pathways for them to take on more responsibilities and assume new roles, as they are the future of your organization.
5. Create clear job descriptions to hire new team members
Craft job descriptions that reflect essential skills and responsibilities while selling employee benefits and your company brand. Don’t waffle or go into too much detail. Use language that clearly defines the skills possessed by ideal candidates and attracts the best candidates in your field.
When designing roles, it often helps to create ideal candidate personas. These personas guide recruiters when sourcing and assessing candidates and help them avoid deviating too far from the skills needed.
6. Monitor and adjust your talent planning strategy
Successful talent planning is dynamic. We’ve mentioned this already, but it’s important because skills gaps emerge quickly as people leave or circumstances change.
We recommend annual skills audits to document critical roles and analyze potential gaps. Ask stakeholders to report on skill levels inside teams or offices. Assess external developments like customer demand or economic downturns and factor them into your annual report.
Recruitment data also helps. How long does it take to fill roles? What is your employee retention rate? How many staff apply for training support or mentoring services?
Top tip:
It’s best to assume that changes are needed. If not, that’s great. But even if your talent planning strategy stays the same, back it up with reliable evidence.
What tools do you need for successful talent planning?
Our final talent planning tip is equipping yourself with the tools for the job. Forget about managing Excel spreadsheets and ever-expanding email threads, and incorporate the following platforms into your tech stack:
- Skills testing platforms host expertly designed digital tests on relevant skills. You can use tests in the hiring phase, engaging applicants and zapping tests over to potential referrals. Test histories for existing employees also let workers know where they are on the skills ladder and how to improve.
- Workforce planning platforms replace spreadsheets with dynamic databases featuring every employee. You can automate tasks like performance reviews or annual testing. Analytics also provide real-time data on skills gaps before they become chronic.
- Career or learning development tools are mobile or web apps that give employees access to test libraries, educational materials, and career advice. They usually feature notice boards or discussion forums, which are ideal for cultivating a culture of learning.
The bottom line: Great tools won’t rescue bad craftspeople, but they empower skilled HR teams to work smarter and more efficiently.
Improve your talent management strategy with Toggl Hire
A streamlined talent planning strategy helps teams source, assess, hire, train, and support the brightest talent. It encourages a spirit of learning and career development and ensures you won’t be left stranded as competitors advance.
Effective talent planning is about policies and processes, but (like any HR challenge) getting it right requires the right tools. Luckily for you, we’ve got just the tool you need. 👀
Toggl Hire’s tools support strategic talent planning. Thousands of expertly made skills tests aid candidate assessment (and improve the candidate experience, too). Analytics deliver insights into hiring performance and skill levels while seamless integrations link hiring tools to HR systems.
Top up your skill levels and stay ahead of the herd in 2025. Create a free Toggl Hire account and give our tools a try.
Elizabeth is an experienced entrepreneur, writer, and content marketer. She has nine years of experience helping grow businesses, including two of her own, and shares Toggl's mission of challenging traditional beliefs about what building a successful business looks like.
