What is Manpower Planning?

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Manpower planning is basically deals with coordinating, motivating and controlling of the various
activities within the organisation.

It is no doubt, planning is the most essential factors for each and every organisations. Without planning,
no organisation can fulfil its goals. Generally, Human Resource planning is also called manpower
planning.

Manpower Planning is the development of strategies to match the supply of manpower to the
availability of jobs at organizational, regional or national level.

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Manpower planning involves reviewing current manpower resources, forecasting future requirements
and availability, and taking steps to ensure that the supply of people and skills meets demand.

In the words of Stainer, “manpower planning is the strategy for the acquisition, utilisation, improvement
and preservation of organisation^ human resources. It is aimed at coordinating the requirements for
and the availability of different types of employees.”

Learn about:-

1. Introduction of Manpower Planning 2. Definitions of Manpower Planning 3. Objectives 4. Need 5.

Importance 6. Bases

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7. Factors 8. Process 9. Types 10. Elements 11. Advantages 12. Problems.

What is Manpower Planning? – Introduction, Objectives, Need, Importance, Factors and Process

Contents:

Introduction of Manpower Planning

Definitions of Manpower Planning

Objectives of Manpower Planning

Need of Manpower Planning

Importance of Manpower Planning

Bases of Manpower Planning

Factors to be Considered for Manpower Planning

Process of Manpower Planning

Types of Manpower Planning

Elements of Manpower Planning

Advantages of Manpower Planning

Problems of Manpower Planning

What is Manpower Planning – Introduction

Though the organisation of men for managing a purpose is an age-old thing, the science of management
is still in nascent stages.

Manpower is a primary resource without which other resources like money, material etc. cannot be put
to use. Even a fully automatic unit such as an unmanned satellite requires manpower to execute it and
plan further improvements/activities. That is why man learned the use of manpower much before he
learned to use other resources.

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In order to achieve a goal, manpower requirement needs to be assessed, located and harnessed.
Manpower planning requires not only a simple assessment of the number of men required but also their
categories and skills as well as their balanced allocation. Improper planning may lead to either over-
staffing or under-staffing, both of which should be avoided. Over-staffing not only increases direct cost
(salary) but adversely affects the cost of training, housing amenities etc., besides production cost.
Under-staffing also affects production morale and, therefore, industrial relations.
Optimum manpower planning therefore assumes importance.

It should aim at:

1. Avoiding imbalances in distribution or allocation of manpower

2. Controlling the cost aspect of human resources

3. Formulating transfer and succession policy

Manpower planning is needed wherever production of goods and services is involved. It is an important
factor of labour productivity and profitability of the enterprise. In an industrial undertaking this is done
very carefully by-

External agencies such as professional consultants and suppliers of plant and machinery for they have
the knowledge of working of similar units. It is generally done in the initial stages or when internal
agencies do not have the required expertise for manpower planning.

Internal agencies such as the personnel department, industrial engineering, plant manager and finance
department as all these agencies are interested in production, productivity, industrial relations and
other aspects of manpower planning.

What is Manpower Planning – Definitions

Manpower Planning is the development of strategies to match the supply of manpower to the
availability of jobs at organizational, regional or national level. Manpower planning involves reviewing
current manpower resources, forecasting future requirements and availability, and taking steps to
ensure that the supply of people and skills meets demand.

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Manpower Planning is estimating or projecting the number of personnel with different skills required
over time or for a project, and detailing how and when they will be acquired.

Manpower planning in terms of human resource development is the skills, knowledge and capacities of
all human beings actually or potentially available for economic and social development in the country.

Manpower planning refers to optimal use of human resources. It is a procedure used in organizations to
balance future requirements for all levels of employee with the availability of such employees.

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Manpower planning is the rightsizing and achieving the balance of demand and supply of workforce. The
penalties for not being correctly staffed are costly.

i. Understaffing loses the business economies of scale and specialization, orders, customers and profits.

ii. Overstaffing is wasteful and expensive, if sustained, and it is costly to eliminate because of modern
legislation in respect of redundancy payments, consultation, minimum periods of notice, etc. Very
importantly, overstaffing reduces the competitive efficiency of the business.

Manpower Planning is the process of systematically forecasting the future demand and supply for
employees and the deployment of their skills within the strategic objectives of the organization. It is the
process by which Management determines how the management should move from its current
manpower to its desired manpower utilization.

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Robert William Pollock, CEO, Drake International observed, “From this angle (critical path) comes the
proposition that, to be effective, manpower planning most irrevocably is tied to corporate strategy, and
the reasons for this are laid out and analyzed. There is also a hard-hitting assessment of management
priorities, which might sound like heresy to some personnel managers. As we know deployment of
capital is a critical, CEO’s decision is equally critical, if not more so, is the procurement and deployment
of people resources.”
Human Resource or Personnel Management is the productive exploitation of manpower resources. This
is also termed as ‘Manpower Management’. Manpower Management is choosing the proper type of
people as and when required. It also takes into account the upgrading of existing people. Manpower
Management starts with manpower planning.

What is Manpower Planning – 13 Main Objectives

1. Demonstrate understanding of competency based approach in human resource.

2. Utilise tools in identifying current staff competencies and gaps, vis-a-vis, the organization’s goal and
targets.

3. Demonstrate skills in conducting training needs analysis.

4. Formulate strategies for addressing identified training needs, prepare and design training modules
and develop curriculum for training course and cost estimates.

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5. Demonstrate the abilities to have the human resources development plan approved by the
appropriate decision making body.

6. Design different training programmes to meet specific needs of particular group.

7. Formulate detailed implementation schedule.

8. Design evaluation tool.

9. Implement training and development activities, programmes and plans.

10. Write a professional report.

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11. Demonstrate knowledge on using relevant analytical tools for planning.

12. Explain the relationship between the organization strategic plan and the strategic human resources
development planning process.

13. Conduct a comparative study on the current human resources development planning process.

What is Manpower Planning – Need: Updating the Knowledge, Improving Performance, Developing
Human Skills and a Few Others

The need for manpower training in an organization may be categorized in the following ways:

i. Updating the knowledge – The first and foremost need for manpower training is to renew and update
knowledge and skills of employees to sustain their effective performance and so also to develop them
for future managerial positions.

ii. Improving performance – Continuous training is required to renew and update the knowledge of the
employees which makes them functionally more useful. The performance of the employees is depends
on the type of training given to them. One way training the employee’s skills is directly proportional to
the performance of those employees.

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iii. Developing human skills – Apart from emphasizing on technical and conceptual skills, new training
programs also put emphasis on developing human skills of employees. Such human skills are necessary
for effective interpersonal relations and sustaining healthy work environment.

iv. Imparting trade specific skills – In industrial employment, the convention is to recruit workers and
employees through compulsory apprenticeship training. Such apprenticeship training enables an
organization to impart industry and trade specific skills to workers.
v. Stabilizing the workforce – Throughout the world, the importance of training is now increasingly felt
for stabilizing the workforce to withstand the technological change and making the organization
dynamic in this changing process.

What is Manpower Planning – Importance: Key to Managerial Functions, Efficient Utilization,

Motivation, Better Human Relations and Higher Productivity

Importance # 1. Key to Managerial Functions:

The four managerial functions, i.e., planning, organising, directing and controlling are based upon the
manpower. Human resources help in the implementation of all these managerial activities. Therefore,
staffing becomes a key to all managerial functions.

Importance # 2. Efficient Utilization:

Efficient management of personnels becomes an important function in the industrialization world of

today. Setting of large-scale enterprises require management of large-scale manpower. It can be
effectively done through staffing function.

Importance # 3. Motivation:

Staffing function not only includes putting right men on right job, but it also comprises of motivational
programmes, i.e., incentive plans to be framed for further participation and employment of employees
in a concern. Therefore, all types of incentive plans becomes an integral part of staffing function.

Importance # 4. Better Human Relations:

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A concern can stabilize itself if human relations develop and are strong. Human relations become strong
trough effective control, clear communication, effective supervision and leadership in a concern. Staffing
function also looks after training and development of the work force which leads to co-operation and
better human relations.

Importance # 5. Higher Productivity:

Productivity level increases when resources are utilized in best possible manner, higher productivity is a
result of minimum wastage of time, money, efforts and energies. This is possible through staffing and its
related activities (Performance appraisal, training and development, remuneration).
What is Manpower Planning – Bases

Manpower planning is done on the basis of:

1. Growth plans which provide information about expansion, modernisation, diversification of business
and new projects to be commissioned with likely commissioning dates and details about manpower
requirements.

2. Separation data available from company records. Separation due to superannuation may be known
easily, but those due to future resignations, transfers, terminations and voluntary retirements may be
projected based upon past experience and the company policy in this regard.

3. Manpower used, various grades offered, etc., in similar plants outside. These may give broad
guidelines of the requirements. However, the guidelines may be modified to suit the process, layout,
local conditions and other associated factors like the extent of mechanisation, climatic conditions,
statutory requirements, social systems, etc.

4. The experience of the manager based on direct and intimate knowledge of the working of similar
shops. This can act as a guide to determine manpower requirement. However, ad hoc manpower
decided on this basis should be subjected to ‘work study’ and ‘activity sampling’ techniques for
containment, rectification of imbalances and manpower requirement.

5. Job analysis and knowledge of work and historical records (if available) to determine manpower
requirements, skills, responsibilities required of the job holder, type of position to be manned, etc.

Time studies are used for setting up standard times which help to work out norms of manpower
requirements.

What is Manpower Planning – Factors to be Considered for Working Out the Manpower Planning

Every organisation requires coordinated effort, management has to create an environment in which
people can decide and act jointly and share the responsibilities and rewards as a team. An organisation
is well-managed if its people strive willingly to achieve its goals and the management looks after their
welfare, without being asked to do so.
An employee, whether he is working at the lowest ladder or directing from the highest seat, is a human
being first and anything else later. As an individual, he is a separate entity. In the words of Swami
Vivekanand, “Individuals have each their own peculiarities and each man has his own method of growth,
his own life marked out for him by the infinite past life…

Everyone born into this world has a bent, a direction towards which he must go, through which he must
live…” Man has his own needs, aspirations, affiliations and egos and his own way of looking and judging
events and people around him. He wants to do something and be something in an environment which is
only partly in his control. He brings with him certain traits and characteristics and vast potentialities.

Family, neighbourhood, society, culture and religion influence his life pattern and way of thinking. The
economy of the country, the cost of living, income level, availability of goods and services, geographical
factors and climate, the form of government, political and legal systems, and overall work culture
constitute his environment. Man is not a passive observer of his environment. When he joins an
organisation, he is not a raw material like cotton or iron ore, but a living human being.

His reaction to management’s policies and programmes, work environment and people around is
influenced by multiple factors related to his own self, society, organisation and environment. His
behaviour is not easily predictable. Managing man, therefore, requires knowing why and how he
behaves in different situations the way he does, and what will or what will not motivate him at the job.

Factors to be considered for working out the manpower planning:

It is the responsibility of personnel department to prepare a scientific manpower planning for the firm.

The following factors are to be considered for working out the manpower planning:

(1) A decision regarding the fields in which the organisation will concentrate its main effort.

(2) A view should be taken on all share which an organisations can hope to achieve in the overall market
assessed for the line or products or service supplied by the organisation.

(3) The estimate will have to make of the resources and the production / sales capacity which would be
needed by the firm to take full advantage of the market potential.
(4) General production and marketing plans and targets should be prepared for the period for which
planning is proposed to be undertaken.

(5) The area of activity of the firm is one of the potential factor affecting the manpower planning.

(6) A detailed assessment of the stage of socio-economic development is another important factor
affecting the manpower planning.

(7) A complete survey of Government Policy pertaining to the area of production should be undertaken
which would determine the prospective plans of Manpower.

What is Manpower Planning – 9 Important Processes: Manpower Plan and Objectives of the
Organisation, Assessment of the Manpower Situation and a Few Others

Process # 1. Manpower Plan and Objectives of the Organisation:

In the organisation, Human Resource Planning plays a significant role. The objectives of the organisation
have to be started with personnel requirements and efficiency should be measured by specific norms.
Within the broad parameter of objectives, priorities have to be ordered and performance indicators
specified in quantifiable or measurable terms.

Process # 2. Assessment of the Manpower Situation:

Human Resource Planning deals with collecting all possible information which is basically regarding
educational qualifications, experience, abilities, aptitudes performance, date of joining, date of birth and
date of retirement etc. of individual employees. It mainly based on skills of employees and also the
resource base of the organization.

Organisational effectiveness over a period of time can be assessed by statistics prepared. It also help for
the future in terms of how efficiency levels can be enhanced, what qualifications need to be prescribed
at what level, what training to institute, etc. in order to raise efficiency to desired.

Process # 3. Projection of Manpower Requirements:

A manpower plan has two components:

(1) Manpower Demand Plan, and

(2) Manpower Supply Plan.

The supply plan deals with the source of proposed manpower. A manpower plan should spell out the
manpower requirements of an organisation in totality. The process of manpower planning involves use
of techniques such as quantitative analysis, multi-variate skills analysis, operations research, PERT and
CMP, orthogonal polynomials, etc.

Process # 4. Classification and Interpretation of Information:

Information collected must be classified to facilitate analysis. Data have to be ready properly and
inferences drawn accurately to derive correct conclusion and formulate objective policy based up such
conclusions. Therefore, the information collected a data, which is essential for the organisation to be
classified and interpreted.

Process # 5. Developing Work Standards and Performance Norms:

Human Resource Planning deals with a lot of developing work standard and also performance the norms
of the organisation. For the improvement, work norms need to be developed and should be framed
realistically in that the limitations or constraints of ‘bounded rationality’ should be provided for.
Standards must be developed in the light of all available information at specific levels.

Objectives should be laid down clearly in that they should be intelligible to the ordinary worker and
should not in any way result in ambiguity or lack of role specify. Therefore, standard should be (1)
realistic, (2) provisional, (3) appropriate, (4) flexible and (5) clearly defined.

Hence, the Human Resource (manpower) planning is to set up hierarchy of objectives, stipulate
qualifications for each level, set up a manpower plan, assign weights to performance indicators, work-
out plan, judge efficiency by performance indicators, review plan, etc.

Process # 6. Anticipating Manpower Problems:

There is a gap between the qualitative and quantitative in the performance of personnel manpower
needs. All types of information is useful in writing job descriptions and specifications and also plugging
“gaps” to reduce the efficiency ‘lag’ by discovering requirements at different levels and making provision
for the same.
Process # 7. Costing Inventory:

For the Human Resource Planning, information is also needed regarding:

(a) Materials available in the organisation

(b) Building in use

(c) Availability of computers.

Process # 8. Supply of Personnel:

Policy planners need to work in close co-operation with educational and training institutes to ensure
adequate supply of personnel. Policy should be sustainable in that organisation must have sufficient
funds to pay for new and added services. One way could be to avoid employing highly trained personnel
for tasks that can be accomplished by less qualified staff.

The ministry of public health, for example, employed trained midwives in family planning programmes
to reduce costs and free doctors who were in short supply for more skilled tasks. The measure reduced
costs and pilot studies revealed that performance of nurse, midwives was a good as qualified doctors.

Process # 9. Research Studies:

Basically, Research Studies is based on the evaluation of manpower planning in the organisation. It also
deals with the empirical studies, which advised for future changes. Policy has to be fact based and as
objective as possible to maximise rationality and avoid satisfying solutions or a priori judgement in
decision-making. It mainly focus on the economic dimension on policy-making and implementation.

So, research is effectiveness of training programmes by application of tools like post training surveys.
Sophisticated analysis is needed to examine discrimination claims and complaints.

What is Manpower Planning – 2 Major Classification: On the Basis of the Level at which it is Done and On
the Basis of the Period for which it is Done

Types of manpower planning can be distinguished by two criteria:

(1) On the basis of the level at which it is done, and

(2) On the basis of the period for which it is done.

(1) On the Basis of the Level at which it is Done:

i. Manpower Planning at Macro-Level (National Level):

Manpower planning is done on the national level as a part of the planning for overall economic
development. The objective behind this is to provide more and more opportunities of employment,
while utilizing the human resources of the nation most efficiently.

It goes without saying that proper manpower planning is a high necessity in a developing country like
India. In Britain, manpower research section of ‘Employment and Productivity’ department undertakes
necessary steps for manpower planning. In India, manpower planning is a port of overall planning and so
its responsibilities lie with the Planning Commission.

Manpower planning by the Planning Commission covers:

(a) Population projections,

(b) Programme of economic development,

(c) Education facilities,

(d) Occupational distribution and growth, and

(e) Industrial and geographical mobility of personnel.

ii. Manpower Planning at Micro-Level:

As manpower planning is important at national level for the maximum use of its manpower resources. It
is also necessary at the level of a business unit. Manpower planning is important because it decides the
various measures to be taken such as recruitment, selection, promotion, transfer, expansion, etc., by a
business unit.

In order to fulfil future manpower demands, this manpower planning is possible at three levels in a unit:

(i) At the departmental level,

(ii) If there are a number of factories of company the planning can be done at the level of each individual
factory taken apart; and

(iii) At the top level, i.e., by the board of directors in a company.

If the manpower planning is done at departmental level, two advantages can be derived. Firstly, the
advantage of the knowledge of those who are in direct contact with the workers can be taken; and
secondly, if the people who are going to execute the plans take part in the planning process, the
probabilities for success of the plans would be surely higher.

A committee is formed at this level. The committee would make inspection of the manpower estimates
put for the previous year and the actual manpower position of the previous year. The two records would
be compared. Then, on the basis of this comparison, estimates for the next year’s manpower
requirements and the sources available to fulfil these requirements would be made known.

Then, keeping in view the expected changes within next 3 to 5 years, the committee would sit with
manpower planning experts and prepare a format for future manpower planning. This format would be
presented before the top level and the final draft would be prepared on its approval.

At the two level, such formats as sent by different departments are considered by an administration
committee. A grand plan is prepared by coordinating manpower plans of different departments. This
grand plan is then coordinated with the overall planning of the business.

(2) On the Basis of the Period for which it is Done:

Three such divisions can be made, which are discussed in the following paragraphs:

(i) Short-Term Manpower Planning:

Short-term planning is that which is done for the period of one year. Annual plans are made as a part of
Five-Year Plans at national level. These one year plans are short-term plans. Short-term plans are very
useful at company level. For better results, short-term plans should be integrated with each other and
should be considered as ingredients of a medium-term plan.

(ii) Medium-Term Manpower Planning:

Generally, any plan of period from 2 to 5 years is considered to be a medium-term plan. At national
level, medium-term plans are essentially prepared as a part of financial planning, medium-term plans, at
national level, for manpower planning give special attention towards employment opportunities.

Such plans at micro-level think much of training and development of employees. Thus, it is possible to
visualise the requirements of personnel possessing right type of skills for coming five years.

(iii) Long-Term Manpower Planning:

The planning for a longer period such as 10 to 15 years is known as long-term planning. This type of
long-term planning is generally done at national level. This is important to estimate manpower needs of
a nation and accordingly to raise educational and training facilities, keeping in view long-term interests
of the nation.

Such long-term planning is not necessary at micro-level except a long-term development scheme has
been visualised by the management of a firm. But, in normal practice, such long-term planning is not
found at company level.

What is Manpower Planning – 3 Basic Elements: Forecasting Demand, Analyzing Human Resources
Supply and Matching Human Resource Requirements with Availability

The process of manpower planning consists of three elements:

Element # 1. Forecasting Demand:

Estimating the demand for manpower is the starting point of a fairly elaborate methodology associated
with human resource planning. The demand for manpower in technology, changes in the organization,
change in the existing product mix, personnel policy, etc., are considered under this.

Element # 2. Analyzing Human Resources Supply:

The human resources demand of an organization can be drawn from existing human resources in the
organization and the external market. It is a general practice that the search for human resources starts
from within the organization.

After assuring the available resources in the organization, one has to look for assessing the external
market.

Element # 3. Matching Human Resource Requirements with Availability:

Requirement and availability of human resources is based on continuous checking (human resource
audit) of the utilization of the existing resources, manpower wastage (potential losses), and how an
organization collects, maintains, analyzes, and reports information on people and jobs (human resource
information system).

What is Manpower Planning – 7 Advantages

The importance of manpower planning has been recognised by the Western countries. In India, much
attention is not being given towards this section of planning.

If manpower planning is practised in its true perspective, following gains can be achieved:

1. Arrangements for recruiting new employees or training current employees can be made, keeping
future manpower needs in mind. As a result, the company’s production, or any work for that matter,
does not stop for lack of employees.

2. When present employees are trained for some higher positions, their spirits soar higher. Such
psychological effects are much desired in a firm to keep up the worker’s morale.
3. While carrying on the process of manpower planning deficiencies of the personnel of the organisation
can be noticed. Training programmes can be undertaken to cover up these deficiencies. In this way,
present manpower’ can be made more efficient.

4. Though the unemployment problem is a burning problem of India, scarcity of skilled and efficient
persons to occupy top management positions is always felt. In such a situation manpower needs (as for
top management positions) can be fulfilled by training intelligent and efficient people in the
organisation.

5. In some manufacturing concerns, labour charges constitute 25 to 40 per cent of total cost of
production. In certain units engaged in providing services, salaries from 50 to 60 per cent of the total
expenditure. To control these costs effectively, manpower planning is a must.

6. Manpower planning can guarantee the availability of persons with required skills for long-term plans.
As a result the company can proceed confidently with its long-term plans.

7. Manpower planning tries to see that there is no excess or lack of manpower in future.

If there is excess manpower, it would mean additional costs for the company. Also, the company may
not be in a position to retrench workers because of powerful trade unions.

On the other hand, lack of manpower would mean a fall in output and consequently fall in profitability
of the firm.

What is Manpower Planning – 10 Problems: Accuracy of Forecasts, Identity Crisis, Support of Top
Management and a Few Others

Problem # 1. Accuracy of Forecasts:

Manpower planning includes forecasting the demand and supply of human resources. In this way the
effectiveness of planning is conditional as it depends upon the accuracy of forecasts. In case the
forecasts are not cent per accurate, as may often happen planning will not be hundred per cent
accurate.
Problem # 2. Identity Crisis:

It is found that a great number of human resource specialists and the managers are unable to
understand the whole manpower planning process. Because of this, there is generally an identity crisis.
Till the specialists develop a strong sense of purpose, planning cannot be effective.

Problem # 3. Support of Top Management:

Manpower planning needs full and whole hearted support from the top management. Without of this
support and commitment, it would not be possible, to ensure the necessary resources, cooperation and
support for the success of the manpower planning.

Problem # 4. Expensive and Time Consuming:

Manpower planning is a many consuming as well as time consuming process. Employers may resist
manpower planning, feeling, as it tends to it increase the cost of manpower.

Problem # 5. Insufficient Initial Efforts:

Successful human resource planning flourishes slowly and gradually and is time consuming. Sometimes
sophisticated technologies are forcefully introduced, only due to the fact that competitors have adopted
them. These may not be successful unless matched with the needs and environment of the particular
enterprise.

Problem # 6. Resistance from Employees:

A common observation is that employees and trade unions resist manpower planning. They fear that
this planning will enhance their overall workload and regulates them through productivity bargaining.
Another fear that they entertain is that it would lead to widespread unemployment, especially of
unskilled labour.

Problem # 7. Uncertainties:

In view of the rapid changes in the environment there are a great number of uncertainties like is risky to
depend upon general estimates of manpower, absenteeism, turnover, seasonal employment,
technological changes and market fluctuations there uncertainties work as constraints to manpower
planning. Although discounts are made for these factors, while preparing the plan, but these factors
cannot be estimated correctly.
Problem # 8. Management Information System:

Effectiveness of planning depends upon the reliability of the information system. In most of the Indian
industries, human resource information system has not fully developed. In view of the lack of reliable
data, it would not be possible to have effective planning.

Problem # 9. Coordination with Other Managerial Functions:

It is often observed that the manpower planners, like to remain aloof from other operating managers
and to become totally absorbed in their own standard. To be effective, manpower planning must be
integrated with other management functions.

Problem # 10. Unbalanced Approach:

It is said that most of the human -resource experts have unbalanced approach. The reason is they give
more importance on the quantitative aspect of manpower only. They do it to ensure that there is
adequate flow of people in and out of die organisation. They overlook the qualitative aspects like career
development and planning, skill levels, morale, etc., are overlooked by them.

It is evident that such unbalanced approach affects the effectiveness of manpower planning. Hence,
manpower planning have two types of problems. One is inherent due to the problems of forecasting and
second comes from human weaknesses.