Hello everyone, in the previous topic we were talking about the Causes of hair fall, its types, prevention, and treatment. Today we are going to discuss Manpower planning. So let’s begin with this topic and we will try to understand the Meaning of Manpower Planning then we will discuss the Importance of manpower planning with the help of an example, the types of Manpower, Steps involved in Manpower Planning and we will end by understanding the Factors Involved in Forecasting Manpower Requirements.

Manpower Planning and Job Analysis both are functions of HR. In this article, we will be studying all about manpower planning, but in the upcoming articles, we covered the topics like job analysis and other HRM-associated terminologies.

Manpower Planning

What is Manpower Planning?

Imagine you are the HR of the company. So, air conditioner of a car manufacturing company how much staff is required most if you know that more work is going to come in the future so you know that you will manufacture double the number of parts you manufactured last year for that you will need more staff for it right.

Now it could also be that some unit in your company is shutting now, in that case, you may have to adjust the people working on this unit in some other unit or remove some of the existing staff this Planning of Manpower is term as Manpower Planning.

Nowadays it is referred to as Human Resource Planning. We can define Manpower planning as-

Human Resource Planning is Manpower Planning– Human Resource Planning can be defined as the process of determining and organizing human resource needs, and the objective of manpower planning is to make sure the company has the right number and the right kind of people at the right place at the right time so as to achieve the company subject earlier the manpower planning concerned itself only with filling the gap in the number of people.

Nowadays It is seen more with respect to filling the gap in the skills and competencies that were all about the meaning of manpower planning.

Importance of Manpower Planning

Now let us understand what will happen if manpower planning is not done properly let us take an example- How Manpower Planning is done in Big IT companies in India Technologies Wipro, Infosys, and TCS these companies usually require people in bulk also mostly worked on multiple projects in parallel. Now if you wait for new projects to come first and then start finding people for that project it will take a lot of time to live in the existing team and this might reduce the quality of the product or worst-case scenario they may end up losing the project.

It cannot hire people to work on it on time to avoid this usually hire candidates in bulk from engineering colleges to start training across according to the anticipated project that comes suddenly their workforce is ready. They also still fall short by a few numbers of candidates then they can hire by direct walkings or by other recruitment sources which we will cover detail later.

However, it may be possible that you have hired a lot of people and do not get enough projects in which case they will still have to pay salaries to those employees which is a loss to the company. We need to find a balance this happens when HR is in touch with different teams and has business exchanges. So that was about the meaning and importance of effective Manpower Planning.

Types of Manpower

Now we will look at the common types of  Manpower. We are looking at two common categories of Manpower is on the basis of the agreement between the employee or worker and be employed and the second is on the basis of the skills of the employee.

First Categorization of Manpower

let’s understand the first categorization is on the basis of the type of agreement between the employee, and the employee categories are-

• Full-time and Part-time employees
• Fixed-term employees
• Freelancers
• Contract Labour
• Apprentices and interns
• Commission and piece-rate workers

Now commonly used terms and sometimes there is not a very clear demarcation between them the objective of this stage is to introduce you to these terms so that when someone mentions them in your career as an HR you know what they mean and the differences between these terms. You will become more and more clear as we will now try to understand these terms meaning one by one.

Full-time or Part-time Employees

Full-time or Part-time employees are permanent loss applied to these employees and about them later what is important to know right now is that these are permanent payroll of the company.

Fixed-term Employees

Fixed-term workers employees get similar benefits but they will have an end date for employment.

Freelancers

Freelancers have a regular arrangement in terms of work they are hired project pieces they do not have the traditional employer-employee relationship basically there is more flexibility in work as compared to a full-time employee.

For example– let’s say I am planning to host an event and want to graphic designer for making pamphlets in this case I can hire a freelancer to do the job for me the design of woodwork for me for the short duration that is still project ends and would just get paid for the work and would not get any additional benefits that your regular full-time employment.

Contract labors

Contract laborers are fired on the payroll of third-party companies for seasonal work.

Apprentices and Interns

An apprenticeship is a training program led in an industry or undertaking where the student has an opportunity to learn and earn at the same whereas A Internship is a means of training in which the learner gets a valuable chance to master important competencies and acquired information, which he requires in getting jobs.

Commission and Piece-Rate worker

Now we try to understand commission and piece-rate workers, for example, the company may say that for the sale of every one piece of furniture one person to profit will be given as commission to the commission worker to the commission will be 1% of the profit for every 100 rupees produced rupees 2000 be given to the worker so the piece rate will be rupees 2,000 this industry is an example of the piece-rate worker.

Second Categorization of Manpower

Now let us look at the second categorization of manpower which is on the basis of skills your power is divided into four types which are as follows-

• Unskilled
• Semi-skilled
• Skilled
• Highly skilled

The second categorization can be divided into the following parts- Unskilled, Semi-skilled, Skilled, and Highly skilled also these categories have been given by the government in the latest labor laws and so we will be discussed those definitions one by one.

Unskilled

The unskilled category is referred to those who do manual jobs when a specific skill is required and they are commonly referred to as blue-collar.

For example– Sweeper and Puli.

Semi-Skilled

The Semi-skilled category referred to those who apply the skills that they have gained on the job. They apply their skills and supervision to a skilled worker and can also supervise unskilled workers.

For example– Gatekeeper, Fireman, and Cook.

Skilled

The skilled category is required to use the skills and competencies that they have gained on the job or through training as an apprentice in a technical or vocational institute for the jobs they also need to make use of the skills of initiating things and judgment.

Examples– Electricians, Carpenters, Mason, Painters, and Tailors.

Highly Skilled

The highly skilled category are referred to those whose performance needs to have a specific level of perfection, which is gained through intensive technical or professional training or to practice of occupational experience for a considerable period of time such employees are expected to take full responsibility for the judgment or decision involvement jobs.

For example- Electrician, Mining, supervisors, and Accountant.

So, we will look at the types of workers in both the categories One last thing that you must know is that the minimum wages for the workers of all these categories of fixed by the government.

Steps involved in Manpower Planning

This section on manpower planning is to help you understand how many power plants there is a department or the entire organization is needed.

Steps involved in manpower planning are-

• Analyze the objectives or work of the organization/team/department.
• Assess the current manpower inventory.
• Forecasting the manpower requirement.
• Forecasting the manpower availability.
• Plan the difference.
• Monitor, control, and feedback.

Analyze the objectives or work of the organization/team/department

The first is to analyze the objectives of the team or department or organization knowing what the company or a department needs to achieve will have better visibility of the men were required to help achieve these objectives. This is usually done in sync with the respective seniors of the department and chairperson.

It can be done individually by the age of two example- A retail company plans to open a new store or an ad agency may be positive that they are likely to get more work from the existing clients in the coming few months or a company may have goes to increase the revenue from 1 crore to 1.5 crores. What the company plans to achieve it becomes easier to plan for the manpower required to achieve these objectives these objectives can also be broken down into departments.

Example- The Marketing department may have made a yearly plan where they want to increase the number of marketing campaigns for each month from 1 to 3. Similarly, the HR team can plan they need to set up the learning and development department in the organization and so they will have to hire a person who can take learning and development seasons.

So you see that the first step in manpower planning is to analyze the objectives of the organization or specific department or trying to achieve so that the HR can plan for the manpower required to achieve objectives.

Assess the current manpower inventory

The current manpower inventory is once we know the goals of the organization then first we check the current manpower that we have both in terms of quantity and quality. It is important for us to remember this step, and this step can be performed at the organization or at the department of the company. You can give the distribution of employees at the department and it depends on how you are doing.

Forecasting the manpower requirement

The third step is forecasting manpower requirements, Forecasting need to predict for an estimate. Now a lot of factors understand what these factors mean. Basically in this step, we have the right to estimate of forecast how many people will be required by each department, we forecast the total manpower required to be 150. So, we know what the goals of the organization or the departments are. Then we know how many people already have both in terms of quantity and quality and then we forecast how many people actually needed to achieve the objectives and goals.

Forecasting the manpower availability

The next step is to forecast the manpower availability you must not be sure that this step is different from the previous step on forecasting manpower requirement. So, forecasting of manpower availability is that lives in the organization of 100 employees at present but some people may be living in the upcoming time also some men join now that some people released soon well.

Some of them may have already resided and may be serving notice period for some people may be retiring or getting transferred to different departments. Effects in such cases these people will not be valuable to achieve the company objective in the future but they would have been counted when assessing the current manpower inventory and does we need to take them into account when doing manpower planning So, that we can plan for this.

example- To understand now what do we mean when we say that some people may join the company into those people was already been hired for the manpower planning begin but later joining date which means that they will not be accounted for in the step assessed the current manpower inventory but since they’ve already been hired we need to count them while doing manpower planning account.

Plan the difference

The next step is to plan the difference so we have to see how many people are valuable and how many the company or department needs to be able to achieve the objective. This difference needs to be transferred and then that many people need to be hired it actually includes both recruitments if more staff is required and layout if there is excess then start again this year.

Monitor, control, and feedback

The last step is to monitor, control and feedback is an important step not just any kind of work soap client for men. It is important to make sure and check if one is on the right track order or not also if any factors change then how does it asset manpower planning and any changes need to be made there or not.

For example- If a new competitor a more just suddenly then how do we need to change our planning such questions need to be dealt with in duster.

An example to understand how the steps are put into practice let’s look at this table here-

Department	Current Manpower/Present Human Inventory	Forecasted Required Manpower	Potential Losses/ Tentative Separations	Potential Addition	Tentative Future Inventory (= Present Human Inventory – Potential Losses + Potential Additions)	Tentative Gap (Forecasted Manpower – Tentative Future Human Inventory)
A	22	25	2	1	21 (=22-2 + 1)	4 (= 25-21)
B	20	17	3	0	17 (=20-3+0)	0 (=17-17)
C	7	6	0	0	7 (=7-0+0)	-1 (=6-7)
D	3	3	0	0	3 (=3-0+0)	0 (=3-3)
E	10	10	1	1	9 (=10-2+1)	1 (=10-9)
F	9	17	0	0	8 (=9-1+0)	9 (=17-8)

The first column has all the department names which we have shown using the alphabet this second column has the current man of the department also known as the present human inventory. This comes from doing the step on assessing the current manpower inventory the next column has the forecasted required when this comes from performing the step of forecasting manpower requirements.

The next column has the potential losses of the tentative resignation and separation this is done by performing the steps and forecasting the manpower availability.

Then we have the column on potential editions which includes the count of those people who have already been hired but may have a 1 joining date this again comes from doing the step on forecasting the manpower availability the next column is the tentative future human inventory this is calculated by subtracting the potential losses from the present manpower inventory and adding the potential additions to this gives us to forecasted manpower availability. This gives us the total number of people have in the future for short notice we have not taken the forecast in manpower into account.

Here then we come to the calculation of the time which is equal to the forecasted manpower requirement – future human inventory you must have understood by now comes from the step on planning the difference. So let’s see how this is calculated the formula it is essentially getting used here is equal to forecasted manpower minus 10 future you even in that he is so no people need to be hired.

Similarly, we have calculated if you see A Rotary the total manpower is 5 and manpower required is 42 the tentative gives – 1 which means that we need to remove one person from this department now it is not necessary that one person will be fired mostly you will see that companies don’t want to see people being fired just because they were not required as found in it is possible that someone shifted to another department to fill the requirements there and to reduce the number of people in the department C.

Now you understood how to calculate the tentative gap and also understood the steps taken during manpower planning and now this plan for 6 months you can plan for more time for a year or for a shorter duration with this method.

Factors Involved in Forecasting Manpower Requirements

We know the steps for forecasting manpower requirements and we also know how to calculate the tentative gap in manpower. Then why we were going through the steps of manpower planning right? As we know that this step in forecasting the manpower requirement involves a lot of factors at this point we will try to understand these factors.

The first thing that I will tell you is there is no set formula for forecasting the manpower required.

You can look at the table here the data of this column can be found easily we can simply count the number of people that each team has and fill the scholar writing these two columns will also be easy to fit since we will know looking at our records how many people are leaving and how many new and joining.

But what about this column there is no set formula to find the required manpower. It is based on various factors and in this topic we will learn what are these factors. So factors for forecasting manpower requirements are as follow-

• The economy of the region
• The financial condition of the company
• Budget of the company
• Workload
• Company Policy
• Technology
• Availability of skills
• Legal Factor
• Manpower type
• Social or cultural factors
• Pressure groups or trade unions
• Learning and development
• Competitors
• Business acumen

The economy of the region

So, the most common factors that are considered are the economy of the country or the region in which the company’s operating.

The financial condition of the company

The financial conditions of the company mean what is the financial position of the company, Is the company financially stable or not.

Budget of the company

The budget is one of the important factors which decides whether the company has the budget to have more units of workers or not.

Workload

So, now we will look at another factor which was workload. let us take an example to understand how we can forecast the manpower requirements based on workload.

Example- a) Annual production target = 6,00,000 units b) Standard man-hours required per unit = 2 hours c) Planned man-hours for the year (a * b) = 6,00,000 * 2 hours = 12,00,000 hrs d) Annual contribution of a worker = 2,0000 hrs e) No. of workers required (c/d) = 12,00,000/2,000 = 600

Now see the annual production target of a company is 6,00,000 units and we know that the standard work hours required to complete one unit of the product is towards from past experience with the company the HR knows that on an average worker contributes about 2,000 hours of work and the plant manager required for the year are 12,00,000 hrs, an annual contribution of workers is 2000 hrs then the number of workers required will be 12,00,000 divided by 2000 which comes out to be 600 so, 600 people will be required to complete the annual production target.

I hope this example has given you a clear picture of how to calculate manpower requirements based on the workload. This was an example of a manufacturing company.

Now we will look at the factors for manpower forecasting for the Retail Industry.

Example- 1 sales person for every 400 sq. ft. area. Size of store = 4000 sq.ft. area Sales staff required = 4000/400 = 10 1 team leader for every 5 sales staff Hence 2 team leaders 1 store manager managed the store 2 cashiers

New retail companies plan for manpower based on the storage area they can have. Let’s assume 1 salesperson for every 400 square feet of the area so is the size of the store is 4000 square feet so the total people required to be 10, of course, this is just for ground staff we also need 1 team leader for every five sales staff Plus One store manager and 2 cashiers. Similarly, different industries can have different factors.

Company Policy

Now we can try to understand the company policy with the help of an example- Let’s say a popular clothing brand has a policy of not having many staff people on the floor number will vary here and manpower will be planned accordingly for different companies.

Technology

Technology & automation comes in then less staff may be required let’s say some manufacturing company has found an automatic process for one of that steps in the manufacturing chain in this case they will need fewer people for that particular work which is now automated.

Another example- can be for the HR department is a company was earlier taking attendance and doing payroll processing manually but now the plan to add biometric systems for attendance is unable to automate the payroll processing in case they will need less staff to take care of such things.

Another example- we can take the banks now most of the work is done digitally and you don’t need to go to the bank so you see how Technology can be an important factor when doing manpower planning.

Availability of skills

Now we discuss another important factor which is the availability of skills, we can understand it by this example- In IT companies like Google and Microsoft, it is very difficult to clear the interviews because they have fiber on the skills of the candidate and therefore the availability of the pool of candidates may be reduced for them so if a company is very choosy than manpower planning will be done differently.

Legal Factor

We can understand the legal factor with the help of an example- Let’s say I am starting my own company and have a budget of 40,000. so, I plan to hire 4 employees and give them a remuneration of 10000 but there is a minimum wage in a place where I started my company is let be 18000 minimum to be paid to a full-time employee, in this case, I can hire only two people. So you see how the legal aspect changes the manpower planning.

Another example- In countries like the UK it is very difficult to fire people legally hiring and firing in bulk policy will not work there.

Manpower type

If a company is hiring on a commission basis then they can hire more employees since they are not liable to pay them salaries every month manpower planning will be done differently according to the need.

Social or cultural factors

We can understand the social or cultural factors with the help of an example- women do not prefer late shifts or traveling jobs and this will have to be kept in mind when hiring employees for certain rules so in this case, the pool of prospective candidates becomes limited to men only and recruitment will become difficult with your numbers.

Pressure groups or trade unions

We can understand the pressure groups or trade unions by this if the union of factory workers decides they will not work for less salary from now then again this will assess the manpower planning of the company. If the company has financial constraints they need to limit the highest and pay more than the minimum wages to them.

Learning and development

The next factor is learning and development now if you already have a learning and development team in short the L&D department of the team then you can hire non-skilled people for lesser salaries and train them accordingly. But if you don’t have an L&D department cell then you will need to hire the highest skills people at Higher salaries.

Competitors

Now we will look at the next factor which is a competitor. If a competitor is taking hold of the market then you may think of hiring more people to make your position in the market stronger.

Business acumen

Business acumen plays a very important role here if an HR has a strong hold on business acumen it will help in analyzing the macro picture of Business manpower planning.

Now, you know how these factors can be considered when we are planning for manpower sometimes you may consider just one factor while most of the time were likely to consider more than one factor.

So, that is all for today guys see you in our next blog. If you like our article please don’t forget to share it with others & follow our Instagram page for your daily dose of Motivation.

Thank You,

Regards

Grooming Urban

Read more What is Human Resource Management (HRM) The Functions of HRM, SCAMPER Technique, & Challenges in the Role of HR Planning In Management Controlling in Management Directing in Management

General FAQ