Manpower Planning is the strategic process of ensuring an organization has the right number of skilled employees at the right time. It involves analyzing current workforce capabilities, forecasting future needs, and bridging gaps to align staffing with business goals, improving efficiency and productivity.
1: Why is Manpower Planning needed?
The importance of manpower planning can be explained with the help of the following example:
Generally, a startup business starts with an idea of service/project. This startup receives the order & start working.
Next, they start hiring people. First, they hire people for production & service. When the work expands, they hire marketing people & next they hire people for other departments such as accounts, quality department & customer care, etc.
Now they have hired so many people but they ignored their competencies. They hired this manpower without proper planning. In the absence of planning, they found bad results.
They found that cost has been increased & results are also poor. People are inefficient & not doing their job properly.
Therefore, If proper planning would have been done, they have not faced such issues. They committed mistakes while increasing their speed.
So, you should do manpower planning.
2: 6 Step Process for Manpower Planning
The process of manpower planning involves the following 6 steps:
1. Identifying departments: First, identify various departments of your company.
For example, a manufacturing company will include the following departments:
- Purchase department
- Manufacturing department
- Quality department
- Dispatch department
- Sales department
- Marketing department
- HR department
- IT department
These all are the departments of a manufacturing company. Similarly, you have to identify various departments of your company.
2. Develop SOP: After listing all the departments for your company now have to prepare their SOP’s step by step.
For example, SOP of purchase department involves:
- Requirement gathering
- Requirement planning
- Get quotation
- Developing new vendors
- Negotiate with vendors
- Finalize one vendor
- Create purchase order
- Receiving order
- Material reconciliation
This is a simple example of SOP. Similarly, you have to prepare SOP for all departments.
3. Identifying competencies: Now, you have to understand your SOP and identify the work type. Identify the skills, attitudes & competencies that are required for this work. It will help you in selecting the right person for this work.
For example, in case of purchase following competencies are required:
- Experienced person
- Fresher person
- Clerk
Similarly, you have to identify competencies in each department of your company.
4. Calculate monthly transactions: Now you have to calculate monthly transactions.
For example, how many purchase quotes should be received?
To know this, you should know the material requirement such as consumables, spares & items. If you are requiring 100 items & you know that you need at least 4 quotes. Therefore, you need 400 quotations or 400 transactions.
Similarly, for requirement planning of 100 materials in 2 transactions, you are planning for 50 materials 2 times in a month.
Therefore, you have to write the number of transactions each time.
5. Identify sub-steps & required time: In this step, you check your SOP in depth. Identify the sub-steps & time required in these substeps. Convert the SOP part into sub-steps & calculate the required time to know the actual time required in all steps.
For example, When you receive a quote first you search vendor database & see how many vendors are available.
Tell them your required quantity & supply time. Ask them to send you a quote. Follow up with them but it will help you in receiving a quote.
Now you know how much time is required for receiving 1 quote so you will calculate the time required to receive 100/ 100 quotes & so on.
In other words, you will find an average time to receive quotes.
6. Calculate the required time for task completion: In step 4, you calculate the number of transactions & in step 5 you calculate the time taken for these transactions. Now multiply step4 with step 5 to know how much time is required to complete the SOP task. You will come to know the man-days requirement in 1 month. When you know all these competencies you will see that 2-3 competencies are actually required.
3. Benefits of Manpower Planning
Following are the benefits of manpower planning:
Identify the manpower department wise: You will know how many people are required in each department. You will know about surplus/deficit manpower.
Identify competencies: You will know about competencies & you can hire people by mapping these competencies. Also, you will know what kind of training or handholding should be given to them.
4: Symptoms of surplus & deficit Manpower
Following are the symptoms of surplus manpower:
Miscommunication because when a greater number of people might confuse.
- Employees sit idle.
- Extended lunch hours.
- Unnecessary discussion & gossips.
- Employees come late & leave early from office.
Following are the symptoms of deficit manpower:
- Employees get less increment.
- Long working hours of employees.
- No leaves for employees.
- Work pressure.
You should observe all these symptoms to understand the surplus/ deficit of your manpower.
Also, you should follow these 6 steps for manpower planning in your organisation.