What is Manpower Planning?

Understand Manpower Planning: concepts, objectives, importance, and process. Optimize your workforce strategy for future success.

Manpower Planning: Concepts, Objectives, Importance, and Process

Manpower planning, often called Human Resource Planning, is a crucial management function. It involves developing strategies to ensure the right supply of personnel with the necessary skills is available to meet the demands of jobs at the organizational, regional, or national level.

Key Definitions:

• Stainer defines it as “the strategy for the acquisition, utilisation, improvement and preservation of organisation’s human resources.” It aims to coordinate the requirements for and the availability of different types of employees.
• More broadly, it is the process of:
  • Reviewing current manpower resources.
  • Forecasting future requirements and availability.
  • Taking action to match the supply of people and skills with demand.
• Ultimately, it is about rightsizing and achieving the balance of demand and supply of the workforce.

The Need for Manpower Planning

Manpower is the primary resource that enables the utilization of all other resources (money, material, etc.). Effective manpower planning is vital because:

• It ensures Optimum Staffing: Improper planning can lead to costly over-staffing (increased direct and indirect costs) or damaging under-staffing (reduced production, low morale, and strained industrial relations).
• It controls Costs: Labour charges are a significant part of the total cost (25-40% in manufacturing, 50-60% in services), making cost control a major function of manpower planning.
• It achieves Organizational Goals: It assesses, locates, and harnesses the required number, category, and skill of personnel needed to meet objectives.
• It manages Imbalances and Succession: It helps in formulating transfer and succession policies and avoiding imbalances in manpower distribution.
• It supports Managerial Functions: Since the four managerial functions (planning, organizing, directing, and controlling) rely on human resources, staffing is key to all of them.

The Objectives of Manpower Planning

The central objectives revolve around developing, utilising, and preserving the human capital of an organisation:

1. To align the human resource plan with the organisation’s strategic goals.
2. To assess current staff competencies and identify gaps relative to organisational targets.
3. To conduct training needs analysis and formulate strategies to address identified deficiencies.
4. To design and implement various training and development programs (e.g., to update knowledge, improve performance, develop human skills, and impart trade-specific skills).
5. To establish work standards and performance norms.
6. To ensure the optimal deployment and utilisation of human resources.
7. To support a competency-based approach to human resource management.
8. To conduct comparative studies on HR development processes.

The Process of Manpower Planning (9 Steps)

The process systematically determines an organisation’s future workforce needs and how to meet them:

1. Align with Organisational Objectives: The manpower plan must be based on the organisation’s overall goals, defining personnel requirements and efficiency norms.
2. Assess the Current Manpower Situation: Collect comprehensive data (qualifications, experience, aptitudes, performance, retirement dates, etc.) on existing employees to understand the skill and resource base.
3. Project Manpower Requirements: Forecast future demand (Manpower Demand Plan) and supply (Manpower Supply Plan) using techniques like quantitative analysis and operations research.
4. Develop Work Standards and Performance Norms: Establish clear, realistic, and flexible work standards and performance expectations for all levels to improve efficiency.
5. Classification and Interpretation of Information: Classify and analyse the collected data to draw accurate conclusions and formulate objective policies.
6. Anticipate Manpower Problems: Identify potential gaps between qualitative and quantitative personnel needs to write accurate job descriptions and specifications.
7. Costing Inventory: Gather essential data on non-human resources (materials, buildings, computers) to inform the plan.
8. Supply of Personnel: Develop strategies for internal promotion/transfer and collaborate with external educational/training institutes for adequate supply, ensuring cost-effectiveness.
9. Research Studies: Evaluate the effectiveness of the manpower plan and training programs through empirical studies to facilitate future policy changes and maximise rationality.

Types of Manpower Planning

Manpower planning can be classified based on two criteria:

Criterion	Type	Description
Level	Macro-Level (National)	Part of overall economic planning (e.g., by India’s Planning Commission) to provide employment opportunities and efficiently use national human resources (covers population projections, economic development, education, etc.).
	Micro-Level (Organisational)	Necessary for a business unit to decide on measures like recruitment, selection, promotion, and transfer to fulfil its future demands. Can be done at departmental, factory, or top (Board of Directors) levels.
Period	Short-Term	Plans made for a one-year period (e.g., annual plans). Very useful at the company level.
	Medium-Term	Plans covering 2 to 5 years. At the micro-level, these focus on training and development to prepare personnel with required skills for the coming years.
	Long-Term	Plans for 10 to 15 years, typically done at the national level to estimate manpower needs and consequently raise educational and training facilities. Less common at the micro-level unless a major, long-term development is visualised.

Advantages of Manpower Planning

When correctly practised, manpower planning yields significant benefits:

• Ensures Availability of Required Manpower: Guarantees the right people with the right skills are available when needed, preventing work stoppages.
• Facilitates Long-Term Planning: Allows the company to confidently proceed with long-term projects by assuring future skill availability.
• Improves Employee Morale: Training current employees for higher positions boosts their spirits and motivation.
• Increases Efficiency: Identifies personnel deficiencies and uses training programs to improve the efficiency of the existing workforce.
• Fills Key Positions: Addresses the scarcity of skilled personnel for top management positions by proactively training internal talent.
• Controls Costs: Effectively controls significant labour and salary expenditures.
• Maintains Balance: Prevents the costly issues associated with both excess (additional cost, difficulty in retrenchment) and lack (fall in output/profitability) of manpower.

Problems in Manpower Planning

Despite its importance, the process faces several challenges:

• Accuracy of Forecasts: The effectiveness of the plan is conditional on the accuracy of human resource demand and supply forecasts, which are difficult to make perfectly.
• Expensive and Time Consuming: The process requires significant resources, which may lead employers to resist it due to perceived increases in manpower costs.
• Support of Top Management: Full commitment and support from top management are essential for securing resources and cooperation; a lack of this can undermine the plan.
• Identity Crisis: Many HR specialists and managers do not fully grasp the entire manpower planning process, leading to confusion and ineffectiveness.
• Resistance from Employees/Unions: Employees and trade unions often fear that the planning process will increase workload, regulate them through productivity bargaining, or lead to unemployment (especially for unskilled labour).
• Uncertainties: External factors like rapid environmental changes, technological shifts, market fluctuations, and internal variables like absenteeism and turnover introduce uncertainties that constrain planning accuracy.
• Insufficient Initial Efforts: Rushing the process or forcefully adopting sophisticated technologies without aligning them with the enterprise’s needs and environment can lead to failure.
• Reliability of Management Information System (MIS): In many industries, the Human Resource Information System is underdeveloped, leading to a lack of reliable data, which is crucial for effective planning.
• Lack of Coordination: Manpower planners sometimes remain isolated from other operating managers, hindering the necessary integration with other management functions.
• Unbalanced Approach: Experts may focus too heavily on the quantitative aspects (e.g., ensuring adequate flow of people) while overlooking critical qualitative aspects like career development, skill levels, and morale, reducing overall effectiveness.