Manpower planning might sound like a concept reserved for corporate giants, but the truth is, whether you are an SME or a multinational company, your organization stands to gain significantly from manpower planning. In the dynamic landscape of today's workforce, effective manpower planning is not just about maintaining the status quo; it's about ensuring business continuity, navigating change, and strategically aligning your resources to not only maintain but also ensure business growth over the years.
In this article, we will explain the key concepts of manpower planning, its process, along with providing a manpower planning template for you to formalize your workforce planning in your organization.
What is Manpower Planning?
Manpower planning is the process of determining what kind of team your organization needs now and in the future. It is an implementation plan to help your organization ensure you have the right people at the right time, with the right skills to succeed today, and be ready for anything that might come up in the future, like unexpected changes or trends.
The goals of manpower planning are simple: avoid having too many or too few staff, make sure everyone has the skills they need, and prepare for what's ahead. It helps you manage your team better, be more adaptable, and reduce risks while keeping costs in check.
For HR teams, it helps in strategizing which recruitment tactics will be more efficient to bring the right people on board upon the decided timeline.
What are the benefits of Manpower planning?
There are several advantages to putting Manpower planning into action at your organization. Let's look at some key benefits:
Addressing Demographic Changes:
- Problem: An aging workforce can bring challenges like a lack of needed skills, reskilling difficulties, and a wave of retirements.
- Solution: Strategic workforce planning helps predict and prepare for these challenges, ensuring organizations are ready and don't face a skills shortage.
Cost Reduction:
- Problem: Hiring too many or losing employees can be costly.
- Solution: Strategic workforce planning ensures you have the right number of skilled employees at all times, cutting costs related to overstaffing and turnover.
Effective Talent Management:
- Problem: Finding and keeping skilled, motivated employees is crucial.
- Solution: Strategic workforce planning helps hire and retain the right people, creating a talented workforce and giving a competitive edge.
Preparing for the Future:
- Problem: The future is uncertain, with unexpected challenges.
- Solution: Strategic workforce planning anticipates changes, identifies crucial roles and skills, and prepares for events like market disruptions or technological advancements.
Risk Mitigation:
- Problem: Risks like understaffing, budget issues, and skills gaps can harm a company.
- Solution: Strategic workforce planning considers current and future needs, helping mitigate risks associated with staffing, budgets, skills gaps, and an aging workforce.
Aligning Workforce Strategies and Organizational Goals:
- Problem: Workforce strategies need to align with where the business is headed.
- Solution: Strategic workforce planning considers future business directions, ensuring the workforce is ready to support organizational goals in the next three to five years.
What is the Manpower planning process?
1. Set manpower needs according to the organization’s strategy
The first step to crafting your manpower planning is to start with the organization’s business goals before rolling out a recruitment plan or other talent management initiatives. The CEO and all the members of the C-suite should be involved in the business goals setting and strategic workforce planning process. This discussion shall take place prior to kickstarting the budgeting process.
The Head of HR is the one in charge of leading the strategic workforce planning discussions together with the CEO. The HR suite must clearly understand the organization’s vision and objective, and must take into account the following :
- Expansion strategy: Which market areas will the business expand to, what new product or service categories will be developed
- What are the steps to attain the company’s objective: Corporate partnerships, franchising, joint ventures, organic growth etc.
- Forecasting profits
2. Coordinate manpower planning with business line managers
Before initiating any recruitment or development activities, the company should collaborate with business line managers to identify key capabilities essential for achieving long-term business goals. A common approach involves relying on core competencies to bridge the gap between business strategy and workforce capabilities.
The Head of HR and his / her team must gather human resources requirements from division and department managers to ensure organizational needs are met.
Line managers should specify:
- Skills (both hard and soft) are needed to support the team in reaching long-term goals.
- Job creation to support business expansion, including detailed job descriptions.
- Existing budget considerations for recruitment or workforce development.
Alignment with the Finance department is crucial to ensure the defined headcount. Key relationships across departments include:
- Business line managers suggest organizational improvements or new headcount aligned with strategic capabilities.
- The finance department ensures clear forecasting of needs with a dedicated budget.
For new headcount creation, line managers seeking additional positions should assess the ROI of the new roles. Collaboration between HR and Finance Managers is essential to validate manpower planning relevance, and supporting growth and profitability objectives. Establish a process for positions needing special approval based on ROI.
Output: Drafted job descriptions for personnel replacement or new positions, approved by the relevant stakeholders.
3. Assess your current talent pipeline and skills required and prepare your operational recruitment plan
Now that you've gathered the positions to be recruited, it's time to incorporate them into the manpower plan!
Evaluate your talent pool by considering:
- Identify experts capable of developing existing personnel into key positions.
- Recognize talents within the organization prioritized for key positions and succession planning.
- Determine the tools for talent identification, recruitment, monitoring workforce engagement, and assessing performance.
Click here to learn more about how to adopt the right recruitment strategy in 2024
Once the headcount is consolidated with a dedicated budget, you can initiate your recruitment strategy to bring the right people on board.
When to kickstart the manpower planning process?
- Discussion with CEO and C-Level: Before initiating your organization's budget cycle. Typically, this occurs in July-August, with budgets being set in the months of September-November for most organizations.
- Discussions with business line managers to formalize hiring needs and budgets: During the budgeting process of your company.
- Operational recruitment planning: Before the new year to ensure a focused approach on your capabilities (plan for the year to come).
