Most small businesses build their hiring plan in the same month they need the people, and by then they are already behind. A workforce plan fixes that by answering three questions before the year starts: who is likely to leave, who you need to add, and how long it will take to find them. This guide walks through a five-step process you can finish in an afternoon and update every quarter.
What Is Workforce Planning?
Workforce planning is the process of forecasting how many employees your business needs, in which roles, and by what date, then building a plan to get them there. For a small business, it does not require special software or a dedicated analyst. It requires your turnover history, your 2027 growth goals, and a realistic view of how long hiring actually takes.
Step 1: Look Back at 2026
Start with your own numbers. Count how many employees left this year, which roles they held, and how long each seat stayed empty. Then calculate your turnover rate: separations divided by average headcount, multiplied by 100. If 5 people left a team that averaged 20, your turnover rate is 25%.
Look for patterns. Do departures cluster in one role, one location, or under one supervisor? Gallup found that 52% of employees who left voluntarily said their manager or organization could have prevented it, so a pattern often points to something fixable. If retention is your bigger problem, start with our guide to employee retention strategies for small businesses.
Step 2: Forecast How Many People You Need in 2027
Use this simple formula:
Hires needed = expected departures + new roles + openings created by promotions
Using the numbers above, a 20-person company expecting 25% turnover should plan for about 5 departures. Add 3 new roles to support growth and you are planning for roughly 8 hires, not 3. Most businesses underestimate this because they only count the growth roles. Adjust for seasonal peaks, new locations, and any retirements you already know about. Then break the total down by role, since eight hires spread across eight different jobs is a very different plan than eight hires for one.
Step 3: Build In Time to Fill
Hiring takes longer than most plans assume. SHRM’s 2026 benchmarking puts the median time to fill a nonexecutive position at 39 calendar days, and notice periods and onboarding add more time on top. Work backward from the date you need someone productive. If a role must be filled by March 1, posting should begin in early January at the latest, and sooner for skilled positions.
The skilled trades are tighter still. Associated Builders and Contractors estimates the construction industry needs 456,000 net new workers in 2027, so you will be competing for the same candidates. Building a candidate pipeline this fall, before you need the hire, gives you a head start.
Step 4: Budget the True Cost of Each Hire
Salary is only part of the cost. Include payroll taxes, benefits, equipment, training, and the months it takes a new hire to reach full productivity. Gallup estimates that replacing an employee costs between one-half and two times their annual salary, so leaving seats open or churning through hires is expensive too. An empty seat also has a cost of its own, whether that is overtime for the team covering it, missed work, or slower service for customers.
Build a simple budget with three lines per role: recruiting cost, first year compensation and benefits, and training and ramp up time. Then compare that total to what it would cost to keep the person you already have.
Step 5: Decide Whether to Build, Buy, or Borrow
Not every gap needs an outside hire. For each role, choose one of three routes:
- Build: train or promote from within. Registered apprenticeships are worth a look in the trades and healthcare, and apprenticeship.gov reports that 93% of apprentices who complete a program stay employed.
- Buy: recruit externally for skills you cannot develop in time.
- Borrow: use contract, seasonal, or fractional HR support to cover peaks without adding permanent headcount.
Most businesses end up using all three, depending on the role.
Check Compliance Before You Hire
New hires bring new obligations. Before you grow, confirm how each role will be classified (employee or contractor, exempt or nonexempt), whether you will be operating in a new state, and whether any positions require licenses or credentials. Seasonal and temporary hires have their own rules, which we cover in our seasonal hiring compliance guide. Headcount matters too, since some employment laws only apply once you reach a certain number of employees.
2027 Workforce Planning Checklist
- Calculate 2026 turnover overall and by role
- Identify where people are leaving and why
- Forecast departures, new roles, and promotion openings
- Set target start dates and work backward using time to fill
- Budget recruiting, compensation, and ramp up time for each hire
- Choose build, buy, or borrow for every role
- Review classification and compliance for new roles and locations
- Put a quarterly review on the calendar
Frequently Asked Questions
When should I start workforce planning for 2027? Now. Starting in the fourth quarter gives you time to build a pipeline and set a budget before January hiring begins.
How often should I update the plan? Review it quarterly, or whenever you win a major contract, open a location, or lose key people.
Does a small business really need a workforce plan? Yes. Even a one page plan beats none, because it turns hiring from a series of emergencies into a schedule.
A workforce plan will not predict everything that happens in 2027, but it keeps hiring from becoming a string of last minute scrambles. If you would like help building one, the team at Gró works with small and mid-sized businesses on exactly this through our HR and recruitment services. Reach out and we will help you map out your year.