Manpower Planning

For a business to become successful long term changes need to be taken into consideration. Human resource is one such factor that changes according to the business objectives and needs. Read on to learn about manpower planning and its importance in an organization.
| Monday, October 13, 2008

Manpower is the backbone of a business enterprise and for an organization to be truly successful the human relations department needs to work in tandem with the other core business functions like operations, marketing and sales. For optimum results in business, manpower planning is extremely important since only the right mix of employees with the correct skill sets can deliver the goods for the company. Therefore manpower planning is an exercise that allows the organization to identify the right kind of people needed for a particular job and these people are then brought on board. Staffing for the organization is done keeping in mind the present and future plans of the organization. Achieving an optimum employee mix is inordinately crucial to really capitalize on economies of scale and also to achieve competitive efficiency in the business.
Manpower planning therefore is done to basically chart out the manpower requirements of the organization keeping in mind its short term and long term production needs. It has a cascading effect on not only the cost but also crucial aspects such as succession planning, organizational stability and growth.

To effectively conduct a manpower planning exercise the present and future requirements and needs of the organization need to be taken into consideration. These are then compared with present manpower figures and predicted future resources. Appropriate steps are then taken to bridge the gap and achieve an optimum manpower figure. For e.g.: Based on future needs an organization may either hire or reduce its manpower strength or it may need employees to be trained in different skill sets. Different companies conduct manpower planning exercise for different periods ranging from a quarter to ten year plans.

The future staffing needs are ordinarily determined taking into consideration certain factors such as:

  • Future production and sales figures (forecast)
  • Any perceived changes in the technology
  • Changes in productivity, efficiency of labor after training and development activities
  • Changes in legislation and government policies
  • Changes in employment policies  

Steps in Manpower Planning

  • Organizations usually profile the current workforce taking several factors into consideration such are number, age, gender, skill sets, experience etc.
  • In quantitative terms manpower planning starts off with determining the number of people needed in the company. This is done considering aspects such as budgets, time study etc. Qualitative aspect of manpower planning includes analyzing the present skills required by the workforce and this is done through job descriptions, job analysis etc. Future needs are chalked out in terms of the number of people and skills needed.
  • Training needs of present workforce are determined and promotion and succession plans are chalked out for the employees.
  • Changes in terms of predicted attrition and retirements are considered and sources of manpower are identified.

Different Procedures in Manpower Planning

Status Quo Planning Method: In this method people who are promoted or leave the job are replaced. Basically it seeks to replace any changes in higher level management with suitable employees.

Thumb Rule: Either based on forecast or past experience an optimal ratio of employees is maintained to meet the firm’s human resource requirements.

Delphi Method: Expert opinion on the company products and human resource needs is obtained from a panel in the form of independent judgment through an interview or a questionnaire.

Unit Forecasting: Supervisors make an estimate along with managers about the human resource needs of the company for the upcoming year.
Computer Simulation: Various environmental and company variables are used in computer simulations to predict and forecast the human resources needs.

Other methods include time and motion study and Maynard operating sequence technique primarily used in companies involved in technical and manual activities.

Benefits of Manpower Planning

  • Manpower planning allows an organization to not only determine the number of people it needs but also the required skills. It therefore points out the workforce that needs to be recruited and the sources for the same. If this exercise is properly done then it aids in ensuring that recruitment does not become a haphazard activity. Over staffing and under staffing can cost a lot to the company and a properly conducted manpower planning exercise can help an organization to avoid the same.
  • Effective manpower planning helps the organization to identify and use the right person for the right job. This can help in controlling and reducing attrition in the long run and improve the processes as well.
  • Manpower planning goes hand in hand with the strategic business plan of the organization. As such a properly conducted manpower planning exercise will ensure that needs of the customers are met with consistency since this activity is conducted keeping in mind the production needs of the organization.
  • Competency of the workforce will improve with manpower planning since the skill requirements are charted out properly.
  • Growth of the workforce will also occur as a result of this exercise since training and development is used extensively and manpower planning also aids in having a well thought out process for career development and succession planning.
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