Workforce scenario planning helps leaders connect uncertain business conditions to practical staffing and compensation decisions. Instead of relying on one forecast, the organization models a small set of plausible conditions, defines decision triggers, and evaluates how each option may affect capacity, critical skills, employee experience, pay equity, cost, and execution risk.
This article began with a May 2020 JER HR Group survey of 45 clients and contacts, primarily small organizations in the New York City and North Carolina labor markets. The findings below are preserved as historical evidence from that moment—not as current benchmarks or recommendations.
Historical Context: JER HR Group’s May 2020 Survey
- Nearly 65% of respondents planned to encourage or allow regular remote work, and 60% expected at least a partial telework schedule.
- Half reported using multiple staffing strategies, including remote work, furloughs, and reduced schedules.
- Seventy percent planned salary freezes for the remainder of 2020, while 12% planned temporary salary reductions.
- Ten percent expected cost-of-living adjustments and 6% expected regular increases.
- Forty-eight percent were eliminating nonessential travel as a cost-containment measure.
These percentages describe the 45 survey responses collected in early May 2020. The sample was not designed to represent all U.S. employers, and the results should not be treated as a current labor-market forecast. The original staffing and compensation survey results remain available for historical reference.
What Workforce Scenario Planning Adds
| Planning question | Single-forecast risk | Scenario-planning response |
|---|---|---|
| How much work is expected? | One demand estimate becomes the budget assumption. | Model a base, lower-demand, and higher-demand range. |
| What capabilities are essential? | Headcount is treated as interchangeable. | Map critical roles, skills, dependencies, and time to proficiency. |
| What staffing action is appropriate? | Leaders jump to hiring freezes or reductions. | Compare redeployment, hiring, contractors, scheduling, cross-training, and attrition management. |
| How should pay decisions change? | Across-the-board action ignores market and equity differences. | Test salary, incentive, range, compression, and affordability effects by employee group. |
| When should the plan change? | Decisions rely on intuition or calendar dates. | Set observable triggers, owners, and review intervals. |
The U.S. Office of Personnel Management describes workforce planning as a systematic process for identifying and addressing gaps between the current workforce and future human-capital needs. Private and nonprofit employers can apply the same core discipline while adapting the process to their own governance, economics, and workforce.
An Eight-Step Staffing and Compensation Scenario Process
1. Define the decision and time horizon
Specify what leadership needs to decide—annual staffing, a funding change, expansion, contraction, a new operating model, or continuity during disruption. Set a horizon long enough to act but short enough to model with useful evidence.
2. Establish the baseline
Document current headcount, vacancies, labor cost, overtime, contractor use, spans of control, turnover, critical skills, pay ranges, incentive commitments, and known workforce constraints. Reconcile HR, finance, payroll, and operations data before modeling alternatives.
3. Identify the few uncertainties that matter most
Focus on variables that could materially change the workforce plan: demand or funding, revenue timing, labor availability, required skills, operating locations, technology changes, regulation, or service-delivery requirements. Avoid building dozens of scenarios around minor differences.
4. Build three or four plausible scenarios
A useful set may include a base case, downside case, upside case, and disruption case. Give each scenario a coherent narrative and quantified assumptions. Scenarios are not predictions; they are structured tests of how the organization could respond.
5. Map workforce demand and supply
Estimate the roles, capabilities, capacity, and timing required in each scenario. Compare that demand with internal talent, expected attrition, hiring lead time, development time, and external labor availability. Preserve distinctions between headcount, full-time-equivalent capacity, and critical capability.
6. Compare staffing options before selecting one
Options may include redeployment, cross-training, scheduling changes, limited hiring, contractors, temporary assignments, managed attrition, or role redesign. Evaluate service continuity, workload, safety, knowledge loss, implementation time, employee-relations risk, and reversibility—not labor cost alone.
7. Model compensation consequences
For each scenario, test base-pay budgets, range positioning, internal equity, pay compression, incentives, critical-skill premiums, geographic practices, and affordability. A salary freeze or reduction should never be treated as a universal default. Review wage-hour, contract, notice, benefits, tax, nondiscrimination, and state or local implications with qualified advisers.
8. Set triggers, governance, and communication
Define the measures that move the organization from one response to another, such as sustained demand, funding, cash, vacancy, overtime, service, or turnover thresholds. Name the decision owner and review date. Prepare manager guidance so employees receive timely, consistent explanations without unsupported assurances.
Scenario Decision Matrix
| Scenario | Possible workforce emphasis | Compensation questions | Watch items |
|---|---|---|---|
| Base | Fill critical gaps and improve deployment | Market movement, range health, equity, merit and incentive affordability | Vacancies, workload, turnover, service levels |
| Lower demand or funding | Pause lower-priority hiring, redeploy, reduce contingent spend | Fixed commitments, compression, minimum-wage and exemption impacts | Burnout, knowledge loss, legal and notice obligations |
| Higher demand | Accelerate critical hiring, cross-train, add temporary capacity | Offer consistency, premiums, incentives, internal equity | Quality, manager capacity, onboarding, pay compression |
| Operational disruption | Protect essential roles, backups, remote capability, vendor continuity | Emergency pay practices, timekeeping, leave, differentials | Safety, payroll continuity, policy consistency, communication |
Remote Work Is a Workforce-Design Decision
The 2020 survey captured a rapid shift toward remote work. Current decisions should begin with role requirements, service outcomes, collaboration needs, employee access, supervision, information security, accommodation processes, and applicable law. Define eligibility, location, scheduling, equipment, performance expectations, expense practices, and review rights clearly. The EEOC’s telework accommodation guidance also distinguishes a general telework program from an individualized reasonable-accommodation process.
Common Scenario-Planning Mistakes
- Treating the most likely scenario as certain.
- Reducing workforce planning to an across-the-board headcount target.
- Modeling pay changes without range, equity, compression, or legal analysis.
- Using outdated survey percentages as current market benchmarks.
- Ignoring implementation time, manager capacity, and critical-skill loss.
- Changing policies without a clear review date or employee communication plan.
- Presenting provisional decisions as promises.
Connect the Scenario to Compensation Governance
Scenario planning should feed the organization’s broader compensation strategy and documented compensation philosophy. JER HR Group can help leaders examine workforce assumptions, compensation data, decision criteria, and implementation tradeoffs. Contact JER HR Group to discuss an evidence-based review.
About the original contributor: Larry F. Beers is the Director of Consulting at JER HR Group and has worked with the firm since 1995. His compensation and benefits work has included job descriptions, job evaluation, competency models, performance management, executive and staff incentives, recognition programs, career paths, staff compensation studies, custom surveys, and executive compensation analysis.
This material is general HR and compensation information, not legal, tax, accounting, or financial advice. Historical survey findings are not current benchmarks. Organizations should validate current market data and consult qualified advisers before acting.
