Manpower Planning/ HR Planning

Manpower planning may be defined as strategy for the procurement, development, allocation and
utilisation of an enterprise's human resources. One of the functions of personnel management is
the procurement of employees in sufficient number. The success of the organisation depends
upon the right type of persons placed on the job. It is the responsibility of personnel management
to see whether qualified personnel have been placed on the job in sufficient number. This
requires planning.

Manpower planning is the planning for manpower resources. Manpower planning ensures
adequate supplies, proper quantity and quality, as well as effective utilisation of human
resources. Thomas H.Patten defines manpower planning as "the process by which an
organisation ensures that it has the right number of people and the right kind of people at the
right place at the right time, doing things for which they are economically most useful" In the
words of Filppo, "An executive manpower planning programme can be defined as an appraisal of
an organisation's ability to perpetuate itself with respect to its management as a determination of
measures necessary to provide the essential executive talent."

Steps in manpower planning

1. Examining organizational objectives and policies: Manpower planning starts

with examining the overall objectives of the organization. In fact, manpower plan
should be integrated into the overall objectives. The number of employees required to
perform various operations will be derived from the objectives of the Organization.
Overall objectives of the Organization have to be understood in order to draw a good
manpower plan.

2. Assessing manpower demand: Manpower demand is the number of people

required to handle the present jobs. Forecasting the demand for manpower is the
process of estimating the future quantity and quality of employees required. For
instance in a Retail Organization the manpower demand is forecasted based on the
work to be performed in every Retail Stores. Obviously the long term corporate plans,
budgets and annual plans would become basis for forecasting the demand for labor.
This is a common activity in most Organizations. The existing job design and job
analysis provide useful information in this regard. The demand forecasting should
consider several internal and external factors. External factors are political,
economical, technological, legal, ecological, governmental, social, and ethical factors.
These factors influence the number and quality of manpower required.

3. Forecasting supply of manpower: Supply forecast is also known as manpower

inventory. The objective of preparing manpower inventory is to find out the number
and quality of manpower available within the Organization to employee in various jobs
identified in the Organisation. Development of supply of manpower data relating to
present human resources in terms of components, number, designations, and

1
department wise should be developed. Here potential losses in the existing manpower
should be considered. The loss of manpower arises out of voluntary retirements,
deaths, retirements, dismissals, layoffs, disablement due to ill health, accidents and
other losses occurring due to poor attitude and low commitment to the Organisation.
Transfers, promotions and demotions, transfers and conditions of work also effect
supply of manpower.

4. Gap analysis: Gap analysis is the process of identifying the difference in the
estimated number of employees and actual number of employees available in the
Organization. This enables to determine the quantity and quality of manpower
needed. This gap reveals the number of personnel to be recruited to fill the gaps.

5. Designing manpower programems: The next step in manpower planning is

designing various programmes relating to manpower. In this regard, changes in the
product or services in the Organization, competition and internal union pressures
should be taken into consideration. Manpower plan details the number of employees
required. Based on this, the organization should make a program of recruitment.
Selection program should be designed based on the source of recruitment and
requirement to the job. In a retail stores the shelf sorters have been given training on
billing mechanism and technology of billing, they can be now redeployed by promoting
them as billing assistants. This enables motivation and satisfaction that they are
promoted to next higher-level jobs. Training and development of existing personnel is
needed in order to ensure their productivity and satisfaction. Manpower plan enables
to decide number of trainees, type of training, methods of training, quality of trainers,
frequency of training programs and the needed budget required. Manpower plan
should enable to plan a program of retention. In the globalization scenario, retention
has become a major challenge to all Organizations. Retail sector is no exception to

2
this phenomenon. In Retail Sector employees leave Organization due to poor
compensation, attractive pay packages offered by the competitors, frequent conflicts
with boss, colleagues and customers, and unstable manpower policies like promotion,
recognitions, rewards, financial help etc. Thus, manpower plan should help to design a
comprehensive plan of retention of employees.

6. Manpower plan implementation: Implementation is the process of converting

plan into action. Implementation of manpower plan is done with the help of various
programmes designed. In the process of implementation, it should be noted that a
close coordination is required with the other section of the human resource
management department.

7. Evaluation and feedback: After implementation of various plans and

programmes, it is necessary to evaluate the effectiveness of these programmes. In
the process, evaluation takes into account the objectives of manpower plan. The
extent of attainment of objectives within the given time is evaluated with the help of
certain parameters. Some times manpower plans may be drawn on too conservative
manner or otherwise. So a critical feedback is required to see that any lapses
identified do not reoccur in the subsequent plans. This ensured improvement in the
manpower planning during the course of time.

Manpower planning Significance

Manpower planning works against all contingencies and provides a cushion to

managers for the effective utilization of human resources. It provides a framework
for many important decisions relating to human resources. The significance of the
manpower planning can be stated as follows.

Growth: An appropriate manpower planning provides information to the management

to undertake decisions relating to expansion of the existing operations or contraction.
For example in Retail Organization, if manpower planning shows surplus people
Organizations can make a planned expansion of its scale of operation to use the
existing manpower.

Talent management: Manpower-planning facilitates an Organization to develop a

reservoir of talent in the Organization. Organization may take appropriate decisions to
develop a list of available talents within the Organization. Having manpower, a plan
ensures planning programmes of training and development of employees in a proper
way.

Cost control: Manpower planning facilitates preparation of manpower objectives and

budgets. This ensures exercising control over various manpower costs.

Facilitates planning: Possessing an appropriate manpower plan provides a

background to plan various facilities required to promote welfare and well-being of

3
employees. Facilities such as canteen, housing, education, medical etc. can be
planned based on the labour plans.

Succession planning: Manpower planning prepares people for meeting all future
challenges. Organization can have a provisional list of employees who are ready with
qualifications and knowledge required for undertaking any future assignment. Based
on the requirement organizations can readily replace superiors in the case of
emergencies and eventualities.

Manpower planning Objectives

Manpower planning is aimed at making an accurate estimate of number of personnel

required with certain skills. It provides significant information to the decision makers
to decide the number, time schedule and manner of recruitment and selection of
personnel. Other wise the Organization would face problems of inadequate supply of
human resources at the right time. The objectives of manpower planning can be
presented below.

 Manpower planning determines the future needs of manpower to meet the objectives of
the Organizations.
 It enables the organization to meet the needs of programmed expansions,
diversification and growth of the Organization.
 It aims at assessing the surplus or shortage of manpower and develops
strategies to deal with them effectively.
 Manpower planning enables to foresee the employee turnover and guides in the
development of retention strategies.
 It minimizes the dangerous caused by the non-availability of required manpower.
 Manpower planning makes it possible to use the existing human resources more
effectively and productively.
 A sound manpower planning economizes wage and salary cost and other human
resource cost in the end.
 It provides a framework to cope with the changes. A good plan enables the
Organization to make available the quality manpower even in the time of
changing market conditions and human resource changes.
 It provides a basis for planning the human resource training and development
programmes in the future.
 Manpower planning provides a guidance to design and execute an appropriate
promotion policy in the Organization.

What are the factors to be considered for Manpower planning?

(1) Goals or objectives of Business—Every business enterprise has some goals or objectives.
The manpower planning must be integrated with business policies as regards to profitability,
production, sales and development of resources. Any change in business objectives would
certainly affect the manpower planning. For example a company decides to introduce computer

4
system in the enterprise. This change will affect the manpower planning i.e., company will have
to recruit computer operators or it will train its existing employees in computer science. Thus,
determination of business objectives clearly in advance is a prerequisite for the effective
manpower planning.

(2) Support of Top-level management—Manpower planning must have the initiative and
support of top level management. Personnel manager as a staff authority can only advise or guide
the top management; he cannot implement decisions. Action on decisions or suggestions of the
personnel manager is to be taken only at the initiative of top executives. Thus support of top
management is a must for the effective manpower planning.

(3) Well-organised personnel department—Manpower planning requires forecasting the

requirements and developments of the personnel for this purpose, there is a need of a well
organised personnel department. Personnel department collects, records, analyses, interprets and
maintains the facts and figures relating to all the personnel in the organisation.

(4) Determination of related policies—Determination of personnel policies regarding

promotion, transfer, wages, fringe benefits, training, leaves etc. is a prerequisite for manpower
planning Without these policies manpower planning will be of little use.

(5) Responsibility—The responsibility of manpower planning should be assigned to some

responsible senior personnel He should be provided all figures to the planning.

(6) Fixing Planning Period—Planning is concerned with problem of future. The planning
period is divided into short term and long term. Planning period depends on the nature of the
business and the social, economic and political environment. Long term planning is preferable
for basic and heavy industries. Consumer goods industries may not resort to long term plans. The
other important factors arc rate of population growth education and training facilities, cost of
training etc.

(7) Manpower standards—In order to avoid the problems of overstaffing and understaffing, the
optimum manpower standards should be determined on the basis of prevailing standards in
similar organisations, past experiences and work measurement. These factors will reduce the cost
of production and will increase the quality of production and will help in preparation of
manpower plans.