The process of determining manpower requirements of an organization. It assesses current manpower and forecast the future manpower required. It helps in moving from the current manpower position to the desired manpower position. That is planning to have the right number and right kind of people at right place and right time to do work which result in both the organization and the individual receiving maximum long range benefit.
Objectives of Manpower Planning
- To recruit and retain the human resources of required quality and quantity.
- To foresee employee turnover.
- To foresee the impact of technology and needs.
- To improve standard ,knowledge ,skill of existing employees.
- To assess surplus or shortage of manpower.
- To effectively use the existing manpower.
Steps in Manpower Planning
Analyze the Corporate And Department Strategies
Manpower planning is dependent on the company’s corporate strategy. For e.g : Expansion,Diversification,Acquisitions ,Merger may demand additional manpower. Strategies like divestment, closure, turnaround will ask for a reduction in manpower. The company level strategy is then divided into individual department strategy.
It is not merely finding out how many employees. One needs the right kind of employees also. Hence the existing job design and analysis should be reviewed keeping in mind the future capabilities, knowledge and skill.
Methods of Demand Forecasting
Managerial Judgment: Here a manager decide the number of employees required for future operations based on their past experience.
Statistical Techniques : Ratio Analysis and regression models. Under ratio trend analysis, ratios are calculated for the past data and these ratios are used for the estimation of the future manpower requirements. Under ratio trend analysis, ratios are calculated for the past data and these ratios are used for the estimation of the future manpower requirements
Ratio establishes a relation between two things. In terms of manpower planning ratios establish a relationship between a particular factor such as past staffing levels or future sales revenue predictions and employee staffing requirements.
The factor setting the comparison standard is the first number in the ratio, and the staffing requirement is the second number.
Two different ratio methods are used in human resource forecasting: staffing ratios and productivity ratios.
Staffing Ratio: 10 Assistants for every 40 Managers. The ratio is 1 assistant for every 4 managers.
Productivity ratio: if 30 sales employees were able to get a sales Rs 3 crores, then to get a sales of 5 crores the company must hire additional manpower.
One can be of the opinion to increase the sales targets of existing staff. However one needs to understand that overburdening your current staff beyond a point would lead to them voluntarily existing the company, This negates your purpose for manpower planning.
Example – a ratio of 200:1 based on sales revenues
It can mean that for every Rs 200000 in sales revenues, HR estimates the department will need one employee.
If sales revenue predictions for the coming year are set at Rs 200,0000 the department will need to maintain a staff equivalent to 10 employees.
Linear Regression may also be used to estimate the manpower necessary at a future point in time, based upon such factors as sales, output or services rendered.
The Delphi Technique is a method of human resources forecasting that uses input from a group to analyze staffing history / planning. A group of senior managers, business consultants or a combination of related business people familiar with the organization’s staffing history answers questions about staffing, and their answers are compiled and used for the group to review individually.
The group doesn’t get together physically, but is coordinated by a facilitator who distributes the questionnaires, compiles answers and returns the information to the panel participants for further review until there is a refinement of the staffing forecasting needs.
The experts are kept anonymous from each other to prevent bias and group-think and get information that is as objective and accurate as possible.
Obtain information about existing manpower. We need to determine the number of employees across departments, designation, job family, demography)
Net Human Resource Requirements
Potential Additions: Transfers, Promotion, Demotion, New Hires
Potential Losses: Resignation, Retirement, Death, VRS, Transfer Out
Action Plan (Surplus and Deficit)
Based on the net manpower requirements we can ascertain whether we have a surplus or a deficit in manpower. Necessary Steps should be taken for each.
Monitor and Control
To implement and supervise the entire Manpower planning Process and ensure changes based on the feedback received.