Why Thailand’s businesses need strategic workforce planning

Key Takeaways:

• Thailand’s shift towards a higher-value economy will require an equally significant transformation in how organisations attract, develop, engage and retain people.
• Strategic workforce planning analyses an organisation's current people capabilities against its future requirements, identifies gaps and builds a structured plan to close them.
• Core activities include capability forecasting, succession planning, skills gap analysis and development planning.
• Organisations that connect workforce planning directly to business strategy are better positioned to compete than those that treat it as an annual administrative task.

Over the next 15 years, Thailand’s labour force could decline by approximately three million people, falling from around 40.2 million in 2025 to 37.2 million by 2040.

For employers, this is far more than an interesting demographic projection. It signals a fundamental change in the environment in which organisations will compete, grow and find the people required to deliver their strategies.

Fewer people will enter the workforce as increasing numbers of experienced employees retire or otherwise leave it. Competition for technical specialists, digital talent, capable managers and other scarce skills is therefore likely to intensify. Replacing departing employees may become slower and more expensive and, in some cases, simply unrealistic.

Yet Thailand’s shrinking workforce is only one part of a much wider transition.

The country is also seeking to move beyond an economic model built substantially on labour availability, competitive costs, manufacturing capacity and volume. Its next phase of development will depend increasingly on skills, know-how, innovation, productivity and higher-value work.

Thailand's economic shift from labour capacity to capabilities

I was recently reminded of the scale and complexity of this challenge during an insightful British Chamber of Commerce Thailand discussion led by Dr Csilla Lakatos, Senior Economist at the World Bank.

The session presented Building Thailand’s Future Today: Long-term Growth and a Development Vision for Thailand. It examined Thailand’s growth outlook, the changing foundations of its economic model and the role the private sector will need to play in shaping the country’s future.

Thailand’s export-led, foreign investment-driven and labour-intensive growth model has delivered substantial progress over several decades. It has supported rising incomes, reduced poverty, expanded access to higher-quality employment and helped establish Thailand as an important regional manufacturing and investment base.

However, the engines of that model have been losing momentum. Economic growth has slowed, while global trade fragmentation, climate change, technological disruption, artificial intelligence, rapid ageing and rising household and public debt are creating additional pressures.

The World Bank describes the next stage of Thailand’s development through two interconnected shifts. The first is a movement from capacity to capabilities: competing through skills, knowledge and innovation rather than relying predominantly on scale, volume and lower-cost production. The second is a movement from the frontier to the foundations: broadening the capabilities currently concentrated among leading companies, highly skilled workers and major urban centres to a much wider base of firms, people and locations.

Thailand already possesses considerable strengths, including established infrastructure, a deep manufacturing base, significant international investment and internationally competitive businesses. The challenge is not to abandon those strengths, but to build upon them.

Thailand’s future proposition will need to be based not only on what can be produced or assembled here, but also on the knowledge, expertise, innovation and value that can be created here.

What market data reveals about Thailand's workforce gap

Much of what the World Bank is setting out helps to clarify, quantify and provide important context for changes that many of us are already seeing.

The increasing difficulty of finding experienced managers and specialist talent is not new. Nor is the concern that many organisations remain too dependent on external recruitment, have underdeveloped succession plans or invest too little in the continued development of their existing employees.

What the World Bank’s analysis does is reinforce that these are not isolated HR issues. They form part of a wider structural shift in Thailand’s economy and workforce.

It also lends weight to a number of arguments that I, together with many other thought leaders in the people and organisational field, have been making for some time.

• First, organisations cannot continue to assume that every vacancy can be filled through a direct external replacement. As the workforce contracts and capability requirements become more sophisticated, that approach will become increasingly fragile.
• Second, recruitment cannot substitute for development. Businesses will need to build more capability internally through continuing development, retraining and reskilling.
• Third, employee development, engagement and retention are closely connected. People are more likely to remain with organisations where they can see that they are learning, remaining relevant and being prepared for meaningful work in the future.
• Fourth, the quality of management and leadership will become still more important. In a more competitive labour market, organisations with weak managers, unclear expectations and limited development opportunities will find it increasingly difficult to attract and retain capable people.
• Fifth, technology alone will not deliver a higher-value economy. Businesses also require the organisational structures, management capability and workforce skills needed to use that technology productively.

Finally, HR can no longer be confined primarily to administration, recruitment coordination and employee documentation. It must contribute to governance, organisational capability, workforce planning, leadership, performance and the organisation’s ability to attract, develop, engage and retain its people.

The World Bank’s analysis does not so much create a new people agenda as make the existing one more urgent, more visible and increasingly difficult for business leaders to ignore.

Why Thailand's workforce challenge goes beyond headcount

The projected reduction of three million people in Thailand’s labour force is consequential, but workforce numbers alone do not tell the full story.

The equally important question is whether sufficient numbers of people will have the skills, knowledge and behaviours required for more sophisticated and higher-value work.

The World Bank’s analysis identifies substantial gaps in foundational literacy, digital capability and socio-emotional skills. It also highlights significant differences in mathematics, reading and science outcomes between income groups.

These findings matter because advanced manufacturing, digital services, automation and innovation require more than narrow technical instruction. They depend on people who can learn, communicate, analyse information, solve problems, collaborate and adapt as technology, business models and customer expectations change.

Thailand does not lack talented people or high-performing organisations. The challenge is to extend these capabilities across more people, more businesses and more parts of the country.

This includes supporting the development of stronger secondary cities and creating more sophisticated employment opportunities outside Bangkok. It also means enabling smaller businesses to participate more fully in higher-value supply chains, innovation and international trade.

The World Bank analysis shows both the strong productivity already achieved by Thailand’s leading medium-sized and large businesses and the considerable scope to broaden those gains across micro and small enterprises. It also identifies the need for a more balanced urban system, with greater growth and opportunity in Thailand’s secondary cities.

This will require changes in education, vocational training, infrastructure, investment policy and regional development. However, it would be a mistake for businesses to regard this as an agenda for the government alone.

Building workforce capabilities through development and reskilling

Thailand’s future workforce cannot be created solely through schools and universities, nor can it be built simply by recruiting a new generation of employees.

It will require a broader system of continuous capability development involving government, educational institutions, vocational providers, employers, industry associations and employees themselves.

At a national level, upskilling must help a much wider proportion of the workforce move into more productive, more complex and higher-value work. This includes technical and digital capability, but also critical thinking, communication, adaptability, leadership, problem-solving and the ability to continue learning throughout a working life.

For individual businesses, the responsibility is more immediate.

It will be created by helping existing employees perform different work or move into roles requiring greater judgement, knowledge and capability through strategic workforce planning. In many cases, the future workforce will not be created by replacing current employees with entirely new people. It will be created by helping existing employees perform different work or move into roles requiring greater judgement, knowledge and capability.

I have long believed that employee development should not be treated as a discretionary benefit or as an activity undertaken only when budgets permit. It is one of the principal ways in which an organisation creates the capability required to deliver its strategy.

This is particularly important for small and medium-sized organisations. Large companies may have the resources to operate internal academies, graduate programmes and specialist learning functions. Many SMEs do not.

Stronger collaboration between employers, universities, vocational colleges and industry bodies will therefore be essential. Shared programmes, apprenticeships, professional qualifications, workplace learning and sector-based development initiatives can help extend capability-building beyond a relatively small group of major employers.

Continuous workforce development will increasingly become a sine qua non of competitiveness in a higher-value economy.

Retirement, renewal and the changing shape of work

Recent discussion about Thailand’s public-sector workforce illustrates the complexity of this transition.

The government is considering a voluntary early-retirement programme that could include civil servants aged 40 and above. The proposal is intended to support public-sector reform and modernisation in response to technological change, although its final eligibility rules and safeguards remain under development.

At the same time, Thailand has also considered extending the normal civil-service retirement age from 60 to 65 in response to population ageing and potential future workforce shortages.

At first sight, these directions may appear contradictory. Why encourage some employees to leave earlier while considering whether others should remain for longer?

In reality, they demonstrate that workforce transformation is not simply about increasing or reducing employee numbers.

Some experienced employees hold specialist knowledge, institutional memory, leadership capability and relationships that organisations cannot afford to lose. They may need opportunities to remain productive for longer, possibly through redesigned roles, flexible arrangements, mentoring or phased retirement.

Elsewhere, technology and organisational change may reduce the need for certain roles or create demand for very different capabilities. Employers may need to retrain and redeploy people, redesign work or introduce carefully managed voluntary-exit arrangements.

The challenge is therefore not simply to keep people for longer or encourage some to leave earlier. It is to ensure that organisations have the right capabilities in the right roles at the right time.

This requires strategic workforce planning, something that remains underdeveloped in many organisations.

Leaders should understand where critical knowledge sits, which roles are likely to change, where succession risks exist and which employees could be retrained, redeployed or prepared for broader responsibilities. Retirement should not arrive as a surprise, nor should knowledge transfer begin only after an experienced employee has announced an intention to leave.

Why businesses cannot rely on Thailand's labour market alone

Government policy will play a critical role in creating the conditions for Thailand’s transformation. But employers cannot wait for educational reform or the external labour market to provide a continuous supply of fully trained and experienced people.

Every organisation needs to ask:

• What capabilities will our business require in three, five or ten years?
• Which skills are already becoming difficult to find?
• Where is essential knowledge concentrated in one or two people?
• Which roles will be changed by technology and AI?
• Which employees could be retrained, developed or redeployed?
• Where will our next generation of managers and leaders come from?
• Why would capable people choose to join us, and why would they remain?

These are not questions for HR alone. They are questions about business continuity, growth, productivity and risk.

As people become harder to find, relying on direct replacements is not a strategy.

Organisations that continue to purchase ready-made capability from an increasingly competitive labour market will find themselves repeatedly competing for the same limited pool of people. Those that build capability internally will be in a stronger and more sustainable position.

Attract, develop, engage and retain

The changing workforce environment creates four closely connected priorities for businesses: attracting, developing, engaging and retaining the people they need.

Attract

Attracting talent is not simply about advertising vacancies and administering recruitment.

Organisations need to understand the future capabilities they require, design worthwhile roles and provide a credible reason for capable people to join them. Reward will remain important, but so will the quality of management, opportunities to learn, the working environment and confidence in the organisation’s future.

Smaller businesses may not always be able to compete with major employers on salary or reputation. They can, however, offer broader responsibilities, faster learning, greater visibility, more flexible ways of working and a more personal employment experience.

Develop

Development should not be treated as an optional employee benefit or an activity undertaken only when budgets permit. It is how organisations create the capabilities their strategies require.

This includes technical development, digital literacy, leadership and management capability, professional knowledge, coaching, career pathways, cross-functional experience and reskilling for different work.

Development also has a direct relationship with engagement and retention. Employees are more likely to remain where they believe the organisation is investing in their future, helping them remain relevant and giving them opportunities to apply new knowledge.

The future workforce cannot be built only by recruiting new people. It must also be built by investing in those already here.

Engage

Engagement is not simply a measure of whether employees are satisfied, nor should it be reduced to an annual survey score.

People are more likely to be engaged when they understand the organisation’s direction, know what is expected of them, trust their leaders and believe their contribution is valued. They also need the skills, confidence and support required to respond to changing expectations.

Asking employees to adapt continually without helping them build the necessary capabilities will create anxiety and resistance. Equally, investing in development without giving people meaningful opportunities to apply what they learn will create frustration.

Engagement depends greatly upon what employees experience through their immediate managers. HR can establish frameworks and processes, but managers bring them to life through their everyday decisions, communication and behaviour.

Retain

Employee retention in thailand should not mean attempting to keep every employee indefinitely or leaving people in unchanged roles for longer.

It means retaining important experience, relationships and organisational knowledge while continually renewing the capabilities employees bring.

There is an important difference between retaining a person and retaining a capability. An organisation may keep an employee for many years, but if that individual’s knowledge and skills are not updated, both the employee and the business may become less competitive.

The objective is therefore not simply to retain employees. It is to retain people while continuing to develop them for the work the organisation will need next.

A wider responsibility for HR and people leadership

Attracting, developing, engaging and retaining people are essential, but they represent only part of what organisations should expect from HR.

My view is that effective HR must be accountable across three broad and interconnected areas.

The first is to protect the organisation through sound governance, compliance and the management of people-related risk. This includes appropriate policies, contracts, employment practices, documentation, decision-making controls and consistent treatment of employees.

The second is to build the organisation by strengthening its structure, management capability and performance. This includes organisation design, workforce planning, succession, leadership development, productivity, performance management and support for business change.

The third is to sustain the workforce by enabling the organisation to attract, develop, engage and retain the people and capabilities required for future success.

These responsibilities cannot be considered in isolation.

An organisation may be legally compliant but still have weak managers, unclear accountability and little capacity to develop talent. It may recruit successfully but repeatedly lose capable people because of poor leadership or limited career opportunities. It may offer generous benefits but lack the structures and performance disciplines required to grow.

Where HR is confined largely to administration, recruitment coordination and employee documentation, the organisation may be managing today’s transactions while failing to prepare for tomorrow’s workforce.

Strong HR should therefore help protect the organisation, build its capabilities and sustain its workforce.

An organisational transformation as well as an economic one

Thailand’s transition towards a higher-value, more innovative and ultimately higher-income economy will not be achieved through investment incentives, infrastructure and technology alone.

It will also require a transformation inside the organisations operating here.

Businesses will need to become better at planning their future workforce, developing managers, transferring knowledge, reskilling employees and designing work so that people and technology together deliver greater value.

A future with three million fewer workers does not automatically mean three million unfilled jobs. Higher productivity, technology, migration, longer working lives and increased workforce participation may offset part of the decline. The World Bank’s own scenarios show that a combination of reforms could significantly mitigate the projected contraction.

Nevertheless, the status quo is unlikely to be sustainable.

The assumptions that many employers have traditionally made about the availability of labour and ready-made talent are changing. Organisations that recognise this early and act deliberately will be better placed to compete.

Those that continue to treat people development as discretionary, workforce planning as an annual headcount exercise and retention as a reaction to resignations will become increasingly vulnerable.

The question is therefore not only whether Thailand is ready for a higher-value economic future.

Are the organisations operating here developing the people, leadership and organisational capabilities required to make that future possible?

How Forvis Mazars can help

The implications of Thailand’s demographic and economic transition will differ between organisations. Some businesses are already experiencing acute skills shortages and increased competition for employees. Others may have capable people but lack the structures, management practices or development pathways required to make effective use of them.

The appropriate response is rarely another isolated HR initiative. Organisations first need a clear understanding of their current position, their future workforce requirements and the most significant gaps and risks between the two.

At Forvis Mazars, we work with organisations to review their people practices, organisational structures, workforce risks and leadership capabilities. We help businesses identify what is working, where important gaps exist and which actions should be prioritised to strengthen governance, improve organisational performance and build a more sustainable workforce.
This can include support with people and organisation health checks, workforce planning, organisation design, management and leadership development, succession, employee development, retention, HR governance and ongoing fractional HR leadership.

Our role is to help organisations translate a broad demographic and economic challenge into a practical programme of action. Speak with our team to discuss your workforce planning priorities and how our HR advisory service can help you.

Sources and context

• World Bank, Building Thailand’s Future Today: Long-term Growth and a Development Vision for Thailand, presentation dated 8 July 2026.
• Thai Rath English, reporting on the proposed voluntary early-retirement programme for civil servants aged 40 and above, 8 July 2026.
• Public reporting in November 2025 on proposals to extend Thailand’s civil-service retirement age from 60 to 65.

FAQ

Q: What is strategic workforce planning?

A: Strategic workforce planning analyses an organisation's current people capabilities against its future requirements, identifies gaps and builds a plan to close them. Core activities include capability forecasting, succession planning, skills gap analysis and development planning. It moves workforce decisions beyond reactive recruitment and annual headcount exercises by connecting them directly to business strategy.

Q: What is skills gap analysis for workforce planning?

A: A skills gap analysis compares the capabilities an organisation has today against those it will need as strategy, technology and operating conditions change. Applied across a workforce, it reveals where critical shortfalls are forming before they become urgent hiring problems. The results guide decisions about training, reskilling, redeployment and succession.

Q: Why is employee retention important during a labour shortage?

A: A contracting workforce makes replacing departing employees slower and more expensive. Retention protects institutional knowledge, client relationships and organisational capability that recruitment alone cannot quickly rebuild. Effective retention also means continuing to develop employees so their skills stay relevant to the work the organisation will need next.

Q: What role does HR play in workforce planning?

A: HR identifies where critical knowledge is concentrated, which roles are likely to change, where succession risks sit and which employees could be retrained or redeployed. It also supports organisation design, leadership development and performance management. Without this involvement, organisations may manage daily transactions but lack the planning discipline required for longer-term workforce shifts.