5HR02 Talent Management and Workforce Planning: Complete Study Guide
5HR02 Talent Management and Workforce Planning is one of three pathway units in the CIPD Level 5 Associate Diploma (HR pathway). Worth 6 credits, it covers the critical HR functions of planning workforce needs, attracting talent, and keeping good people. These are among the most visible and business-critical activities HR performs.
This guide breaks down everything you need to understand about 5HR02, including the key concepts and what each assessment criterion is asking for.
What You'll Learn in 5HR02
The unit covers four main learning outcomes:
- Understand key contemporary labour market trends and their significance for workforce planning — How organisations position themselves in competitive markets and respond to changing conditions.
- Understand the purpose and importance of workforce planning — Forecasting, gap analysis, and recruitment/selection methods.
- Understand the impact of employee turnover and the benefits of retention — Why people leave, how to keep them, and the costs of getting it wrong.
- Understand the importance of managing contractual arrangements and effective onboarding — Different employment contracts and integrating new starters.
Key Concepts for 5HR02
Labour Market Dynamics
Tight vs Loose Labour Markets
Current UK trends include skills shortages in specific sectors, demographic shifts, and changing worker expectations post-pandemic.
Employer Branding
How organisations position themselves to attract talent:
- Employee value proposition (EVP)
- Reputation and culture
- Career development opportunities
- Reward and benefits package
- Work-life balance and flexibility
- Corporate social responsibility
Workforce Planning
The Workforce Planning Process
- Analyse current workforce — Skills, capabilities, demographics, potential
- Forecast future demand — Business plans, growth, change, attrition
- Forecast future supply — Internal pipeline, external market, trends
- Identify gaps — Where demand exceeds supply (or vice versa)
- Develop strategies — Recruit, develop, retain, restructure
Forecasting Methods
Managerial judgement: — Managers estimate future needs
Trend analysis: — Project from historical patterns
Ratio analysis: — Link workforce to business metrics
Scenario planning: — Model different futures
Recruitment Methods
Internal Recruitment
- Promotions, transfers, secondments
- Advantages: cheaper, faster, known quantity, motivating
- Disadvantages: limited pool, may create another vacancy, "inbreeding"
External Recruitment
- Job boards, agencies, social media, careers fairs, direct applications
- Advantages: fresh perspectives, specific skills, larger pool
- Disadvantages: more expensive, longer, unknown quantity, onboarding needed
Modern Approaches
- Social media recruitment (LinkedIn, targeted advertising)
- Employee referral schemes
- Talent pools and pipelines
- Employer brand marketing
Selection Methods
Key Principle: Use multiple methods and ensure they're valid (predict performance) and reliable (consistent results).
Employee Turnover
Types of Turnover
Voluntary: — Employee chooses to leave
Involuntary: — Organisation ends employment
Functional: — Loss of poor performers (can be positive)
Dysfunctional: — Loss of good performers (always negative)
Avoidable: — Organisation could have prevented it
Unavoidable: — Retirement, relocation, etc.
Push and Pull Factors
Push factors (drive people away):
- Poor management
- Lack of development
- Inadequate reward
- Work-life imbalance
- Limited progression
- Toxic culture
Pull factors (attract to other opportunities):
- Better pay elsewhere
- More interesting role
- Career advancement
- Location preferences
- Industry reputation
Retention Strategies
Competitive reward: — Pay, benefits, recognition
Development opportunities: — Training, career paths, stretch assignments
Good management: — Leadership quality, feedback, support
Work-life balance: — Flexibility, wellbeing support
Engagement: — Voice, involvement, meaningful work
Culture: — Values alignment, belonging, purpose
Onboarding
Purpose of Onboarding
- Reduce "induction crisis" (early leaving)
- Accelerate time to productivity
- Build engagement and commitment
- Transmit culture and values
- Ensure compliance (policies, health & safety)
Effective Onboarding Includes
- Pre-boarding (before day one)
- Structured first day/week
- Role clarity and expectations
- Social integration (meet the team)
- Ongoing support (buddy, manager check-ins)
- Extended timeline (not just first week)
Contractual Arrangements
Gig Economy Considerations
- Flexibility for organisations and workers
- Questions about worker rights and security
- Regulatory scrutiny increasing
- Balance business needs with fair treatment
Assessment Criteria Breakdown
Learning Outcome 1: Labour Market Trends
AC 1.1: Explain how organisations strategically position themselves in competitive labour markets
This asks you to:
- Discuss employer branding and EVP
- Cover competitor analysis for talent
- Explain positioning strategies (employer of choice)
- Consider reward, culture, and reputation factors
AC 1.2: Explain the impact of changing labour market conditions on resourcing decisions
This asks you to:
- Distinguish tight and loose markets
- Discuss how conditions affect recruitment strategies
- Cover skills shortages and labour supply trends
- Use PESTLE to analyse market changes
- Show how organisations adapt resourcing approaches
Learning Outcome 2: Workforce Planning
AC 2.1: Analyse the impact of effective workforce planning
This asks you to:
- Explain the workforce planning process
- Discuss forecasting demand and supply
- Cover gap analysis
- Analyse the impact on business performance
- Consider what happens without effective planning
AC 2.2: Evaluate the techniques used to support the process of workforce planning
This asks you to:
- Cover demand forecasting methods
- Explain supply forecasting approaches
- Discuss data sources and analysis
- Evaluate strengths and limitations of techniques
AC 2.3: Evaluate the strengths and weaknesses of different methods of recruitment and selection to build effective workforces
This asks you to:
- Cover multiple recruitment methods (internal/external)
- Cover multiple selection methods (interviews, tests, centres)
- Evaluate validity and reliability
- Discuss diversity and fair access
- Consider technology impact on recruitment/selection
Learning Outcome 3: Turnover and Retention
AC 3.1: Discuss factors that influence why people choose to leave or remain in organisations
This asks you to:
- Distinguish voluntary/involuntary, avoidable/unavoidable turnover
- Explain push and pull factors
- Discuss what motivates people to stay
- Consider individual differences in reasons
AC 3.2: Compare different approaches to retaining people
This asks you to:
- Cover multiple retention strategies
- Compare their effectiveness
- Consider cost and feasibility
- Discuss which approaches suit different contexts
AC 3.3: Explain the impact of dysfunctional employee turnover
This asks you to:
- Define dysfunctional turnover
- Cover direct costs (recruitment, training)
- Cover indirect costs (productivity, morale, knowledge loss)
- Explain measurement methods
- Link to your dysfunctional turnover post
Learning Outcome 4: Contracts and Onboarding
AC 4.1: Assess suitable types of contractual arrangements dependent on specific workforce need
This asks you to:
- Cover different contract types
- Explain when each is appropriate
- Consider gig economy and flexible working
- Match contracts to workforce needs
AC 4.2: Explain the benefits of effective onboarding
This asks you to:
- Define onboarding purpose
- Discuss benefits for employee and organisation
- Cover reduced turnover, faster productivity
- Explain what effective onboarding includes
Common Mistakes to Avoid
- Focusing only on recruitment — This unit covers the full talent lifecycle from planning to onboarding.
- Ignoring labour market context — LO1 sets the scene; don't jump straight to methods.
- Generic retention strategies — Discuss what works in different contexts, not one-size-fits-all.
- Weak turnover cost analysis — Be specific about both direct and indirect costs.
- Overlooking onboarding — AC 4.2 is often rushed. Give it proper attention.
Useful CIPD Resources
Workforce Planning Practice Guide: — Comprehensive guidance
Resourcing and Talent Planning Survey: — Current trends and data
Employee Turnover and Retention Factsheet: — Core concepts
Recruitment Factsheet: — Methods and approaches
Selection Methods Factsheet: — Validity and best practice
How People Study Pro Helps with 5HR02
People Study Pro provides structured guidance for every 5HR02 assessment criterion, plus links to relevant content like our workforce planning guide and dysfunctional turnover explainer.