Manpower Planning helps to identify suitable sets of employees

By: Jason DSouza & Varsha Raju

An organisation set on the growth path needs competent people to achieve its objectives. And finding the right human resources is not an easy task. One needs educated, skilled manpower for sales, product management, research and development, production, etc. Manpower planning is not limited to hiring and retaining talent, but anticipating future manpower needs of an organisation. In a dynamic business scenario, manpower planning is critical to organisational growth and stability. It is integral to recruiting, retaining, retraining and redeployment of talent. Linked to business needs of the organisation, the process is much more complicated than it seems, primarily because it also involves developing skills and competencies of existing employees to meet market demands which can change with time.

Concept of Manpower planning

o Process by which Management determines how the management should move from its current manpower to its desired manpower utilization o Described as formal planning in emphasizing the following: Establishment and recognition of future job requirements Scanning the organization thru systematic manpower audit Assured supplies of qualified participants Development of available manpower Effective utilization of current and prospective workforce members

Importance of manpower planning

Understaffing loses the business economies of scale and specialisation, orders, customers and profits. Overstaffing is wasteful and expensive, if sustained, and it is costly to eliminate because of modern legislation in respect of redundancy payments, consultation, and minimum period of notice etc. very importantly, overstaffing reduces the competitive efficiency of the business. The basic factors determining future staffing are: a. Sales and production forecasts b. The effects of technological change on task needs c. Variation in the efficiency, productivity, flexibility of labour as a result of training, work study, organisational change, new motivations etc., d. Changes in employment practices, use of subcontractors etc., e. Variations due to new legislations e.g., payroll taxes or their abolition, new health and safety requirements f. Changes in government policies like investment incentives, trade grants etc.

What should emerge from this blue sky gazing is a thought out and logical staffing demand schedule for varying dates in the future which can then be compared with the crude supply schedules. The comparisons will then indicate what steps must be taken to achieve a balance. That in turn, will involve the further planning of such recruitment, training, retraining, labour reductions-early retirement or redundancy or changes in workforce utilisation as will bring supply and demand into equilibrium. Manpower planning Operations Research can assist the HR manager to identify the current and future effect of aging and diminishing population growth. Changes in company strategy can be analysed as well, enabling the HR manager to set its recruitment strategy in support of the company goals. As in any other OR project, the first step is to analyse the current situation, identify what the current age distribution is, what are the company goals in terms of size and capabilities of the required workforce. This will give insight in the current impact of aging. Using scenario analysis, company growth scenarios can be identified together with the management of the company. This will give insight in the size and capabilities of the required future workforce. Planning staff levels requires that an assessment of present and future needs of the organisation be compared with present resources and future predicted resources. Appropriate steps then be planned to bring demand and supply into balance. Thus the first step is to take a satellite picture of the existing workforce profile and then to adjust this for years ahead by amendments for normal turnover, planned staff movements, retirements etc., in line with the business plan for the corresponding time frames. The workforce profile is to be studied based on numbers, skills, ages, flexibility, gender experience, forecasting capabilities, character, potential etc. A buffer/pipeline of suitable candidates is necessary to prevent any last minute surprises. "The recruitment team today works along with business line managers to plan ahead of their manpower needs. The best strategy to formulate a backup plan includes grooming fresh talent and creating a second line at all functions. Building second line personnel in the organisation, coupled with robust systems, will ensure that company gets a competitive edge over other market players. Working closely with the business groups and keeping an active talent inventory and effective churning the internal employee database (from skills availability and referencing programme perspective.) is the key. Identifying the skill matrix of the

internal talent pool and putting to good use during business exigency optimises the manpower utilisation at any given point.

Steps involved in Manpower planning process

Step1 : Job Analysis / job design - Mgt must define what work to be performed , how tasks to be carried out and allocated into manageable work units (jobs) Step 2 : Job description & job specification - refers to incumbent where a job specification with regard to qualification and experience needed to perform a job Step 3 : Forecasting procedures: Corporate planner has to forecast the number of people needed for a particular job can be done by forecasting the internal supply and external supply of the people who can perform the job Six methods can be used to forecast the future human resource needs viz : Planning for the statusquo Thumb rules Unit forecasting The Delphi Method Scenarios Computer Simulation Step 4 : Internal Supply of Manpower

Many companies are or will be facing the consequences of aging and diminishing population growth. These trends will lower the available workforce over the next years; even with stable workforce requirements it will become harder and harder to keep the available workforce at the required level.

As can be seen from the above figure, the available workforce within the company will diminish over time because of aging, increasing the gap between the required and available workforce. This means that every year, even when the company stays at the same size, more people need to be recruited to fulfil the workforce demand, putting the recruitment department under a lot of pressure. This pressure even increases because the available group of people to recruit from will decrease, because of diminishing population growth. This situation will even worsen more because companies dont tend to be stable in terms size, also service offerings will change leading to a different set of required capabilities. Thus through these various processes the required manpower can be accurately determined in companies. Manpower planning thus helps to identify suitable sets of employees.

Process flow chart Depicting forecast on Manpower Planning Corporate objectives Demand for Manpower

Market Demand

Assess Manpower Supply

Labour Market

Existing Manpower Estimate

Potential

Training Plans

Promotion Success Plan Periodic reviews

Pay Productivity Plans