Manpower Planning - Meaning, Importance, Process & Example
Published by MBA Skool Team, Last Updated: August 03, 2021
What is Manpower Planning?
Manpower planning is the process of estimating the optimum number of people required for completing a project, task or a goal within time. Manpower planning includes parameters like number of personnel, different types of skills, time period, demand and supply trends, organizational strategy etc. It is a never ending continuous process to make sure that the business has the optimized resources available when required taking into consideration the upcoming future projects and also the replacement of the outgoing employees. It is also called as Human Resource Planning.
Large businesses often work on forecasting and upcoming opportunities in the pipeline. If these opportunities convert into actual business, they would need manpower to start working on them. But the dilemma is that what if they hired a large number of people to work on an almost sure project but at the last moment the project didn't start on time. What would the business do with the additional skilled manpower.
The other dilemma is that if they kept waiting till the last moment for a project and when the project starts they might not have enough manpower to work and deliver. These questions are solved by the process of manpower planning.
Manpower planning also includes the details like how and when will new employees be acquired. This whole process is done keeping in view the goals of the organization, the future predictions for business and changing technology trends. This helps the organization be prepared for the future with the correct manpower at their disposal for business prosperity.
The above diagram shows the manpower planning process which depends upon the business objective. The process can be elaborated in detail below.
Manpower Planning Process
HR department of every company has to constantly keep an eye on the human resources that the company has. With every possible event like change industry dynamics, increase in business requirements, skills required for a particular technology etc, the need for having better resources increases.
The process and steps for manpower planning are as below:
1. Understanding the existing workforce
The HR department has to thoroughly understand the manpower available with the company. They should examine the background, skill set, qualification, location etc. of the entire work force so that they have a good idea regarding the pool of talent which the company has.
2. Forecasting for the future
With constant changes in business requirements, companies must understand the future trend and which type of employees would be best suited for their organization.
Hence, companies must examine, evaluate and forecast the type of employee workforce they want in the future years
3. Recruitment and selection
Depending upon the business requirements, manpower planning leads to a much more well thought out recruitment and selection pattern. This totally depends upon the forecasts made and the business requirements. Hence, candidates with better qualification, skill set, experience etc. are shortlisted as employees to best suit the future needs.
4. Training the employees
Employees who are a part of the organization are trained to have the best skills, knowledge and understanding about the current job as well as the future requirements.
All these above mentioned manpower planning steps help organizations become better prepared to adapt to new technology, future industry developments and even to face off with competitors.
Importance of Manpower Planning
Manpower planning is an essential requirement for any business. It helps the company to be prepared well in advance for the type of employees they would be requiring in their organization in the future. With constantly changing business requirements, technological advancements etc. the skills and knowledge of employees tend to become obsolete over a period of time. Also, if a business is growing, then the workforce needs to be expanded if the company wants to have its business at different locations, different business domains etc. If a company fails to prepare before hand, it can create issues in the future and can collapse the business model for a company. Hence, timely preparation of manpower planning would always help a business grow.
Example of Manpower Planning:
IT companies are often faced with the business problem of hiring right people for upcoming projects as well as attrition. These companies have multiple projects going on at a single time and upcoming projects in the pipeline. If they hire more people without planning they would end up with many resources on the bench which would eat into profits and if they keep waiting till the last, they would not have enough skilled people to set up the project and start delivering eventually leading to customer dissatisfaction and losses.
So these companies keep on forecasting and planning as per the market requirements, latest skill set and their project pipeline. Most of the times, hired resources cannot be productive straight away so they need to train them which would require further planning and time.
Hence, this concludes the definition of Manpower Planning along with its overview.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
Browse the definition and meaning of more similar terms. The Management Dictionary covers over 2000 business concepts from 5 categories.