Manpower Planning

It is a process- includes forecasting, developing and controlling by which a firm ensures that it has the right number of people and the right kind of people at the right places at the right time doing work for which they are economically most useful - Geisler

Human Resource Planning

The process an organization uses to ensure that it has the right amount and the right kind of people to deliver a particular level of out put or services in the future. Gomez-Mejia, Balki and Cardy, 2001

Macro Level Manpower Planning

National Population Trends Economic Growth Rates Educational Plans Overall Supply and Demand for various categories of manpower

Misconception
Surplus Labour - Large number of Trained Manpower Availability of Specific Skill Requirement Mislead the Manpower Planners The ideal objective of the planners could be the fulfillment of expansion, diversification or technical change

Purpose of Manpower Planning : Macro Level Segments Area of concern

National Level Population Projection Programme for economic development Educational facilities Occupational distribution and growth Industrial and geographical mobility of personnel Primary, Secondary, Tertiary Sectors in General Agriculture, Industry and Service Sector in particular Specific Industry For Example; Plantation, Engineering and Textile

Sector wise

Industry wise

Individual Unit Based Particular Organization/ Unit ss

Need for Manpower Planning: Micro Level To avoid the sudden disruption in production Enabling management to adopt suitable strategies to cope with situation To get prepared for fresh demands in terms of numbers, skills and occupation groups To meet increasing demands either due to business growth or expansion To meet the attrition due to wastage, turnover, separations and mobility Anticipating need for various types of skill requirements and level of personnel

Manpower Planning Objectives Micro Level

Obtains and retains the quantity and quality of human resources it needs at the right time and right place Makes optimum utilization of these resources

Pressing Concerns
Lead time for getting personnel Skills that one may need are not always available Non-availability of suitable manpower Delays in executing new projects and expansion programmes Changing job requirements due to technological change Growing complexity of business operations

Lead to inefficiency and low productivity

Leveling Field
Surplus could be deployed Shortages can be provided for Under utilization throng over manning leads to high labour and low profit margin Cost Estimation Labour cost 25% of the production cost + 40% of the selling cost

Six steps in the HRP process

1.Environmental Scanning Identify and anticipate sources of threats, and opportunities; scanning the external environment (competitors, regulation) and internal environment (strategy, technology, culture)

2. Labor Demand Forecast

Project how business needs will affect HR needs, using qualitative methods (example, Delphi, nominal) and quantitative methods (trend analysis, simple and multiple linear regression analysis) Project resource availability from internal and external sources

3. Labor supply forecast

4. Gap analysis
5. Action Programming

Reconcile the forecast of labor supply and demand

Implement the recommended solution from the step 4

6. Control and Evaluation

Monitor the effects of the HRP by defining and measuring critical criteria (example, turnover costs, breakeven costs of new hires, recruitment costs, performance outcomes)

Objectives of Manpower Planning

Utility as a planning and control technique (systematic approach)
Prediction of manpower requirements and control will be easier (manpower deployed) o This could be because of the more precise matching of manpower needs to the firm's business plans, control the wage and salary cost.
o

It has an accurate estimate of the number of employees required with matching skill requirements to accomplish organizational goals The existing personnel deployment information The kinds of skills required for the various categories of jobs and manpower requirements over a specified time period in relation to the

Corporate Plan and Manpower Planning Process Capitalize on the strength of the organization's human resources Determine recruitment levels Anticipate redundancies Determine optimum training levels Serve as a basis for management development programme Cost manpower for new projects Assist future requirements Study the cost of overheads and value of service functions Decide whether certain activities need to be subcontracted

Forecasting
HRP is more of an art rather than science because it can only indicate broad trends and the likelihood of action when the future is more assured. Demand forecasting is affected by any corporate plans which may result in increases /decreases in the demand for employees. These might include Setting up a new organization, Introducing a new product or service, Rationalizing production or distribution, and Plans to drive cost out of the business. Expected changes in productivity arising from new working methods or the introduction of new technology may also affect demand. There are four methods of doing the forecasting activity, they are as follows

Managerial Judgment
Thinking about the future workloads, and decide how many people you need. It needs guesswork. It works in a short-term basis, it doesnt create problem in recruitment, overtime, sub-contracting or outsourcing. Though it may not be a easy thing. Unforeseen decreases in activity (continuous) levels may create more problems. Constant attempt to forecast requirements as far as ahead as you can see by monitoring trends, finding out how business plans are progressing, checking on sales forecasts and results and so on. One must get data from other people rather than relying on ones own resources.

Ratio Trend analysis

Studying the past ratio between the number of direct (production) workers and indirect (support) workers in a manufacturing unit. Forecast activity levels can then give you a good idea of how many direct workers you will need (so many people to make so many widgets) and the ratio of indirect to directs will tell you how many support workers you are likely to need. Trend analysis incorporates certain business factors (example, units produced, revenues). And a productivity ratio (example, employees per units produced). There are six steps in trend analysis,
Find the appropriate business factor that relates to the size of the workforce Plot the historical record of that factor in relation to the size of the workforce Compute the productivity ratio (average output per worker per year) Determine the trend Make necessary adjustments in the trend, past and future Project to the target year
The use of appropriate business factor is critical to the success of trend analysis

Work Study Techniques

Work measurement to calculate how long operations should take and the number of planned hours, and therefore people, required. Planned output for year = 2,000 Standard hours per unit = 5 hours Planned hours for year = 100,000 hours Net productive hours per person year = 2,000 hours Number of direct workers required Planned hours / Productive hours per person = 50

Forecasting Skill Requirements

It starts from an analysis of the current range of skills required. Analyze the impact of forecast product market developments The acquisition of new or different types of business Projected changes in work methods The effect of the introduction of new technology includes: Information Technology, Computerized production methods such as Manufacturing Planning (MRP), Computer integrated manufacturing (CIM), or Form of automation or robotics. Skill forecasting is a matter of judgment based on experience and a thorough analysis of likely trends in the type of work to be carried out and working methods.

Supply Forecasting
It estimates the number of people likely to be available from within and outside the organization (Internal & External Labor Market). The supply analysis covers, Existing people available how many have you got and what skills do they posses? Potential losses to existing resources through employee wastagewhat are the present and forecast employee turnover figures? Effect of absenteeism- what is the present rate and what will it be in the future? Sources of supply from within the organization-who have we got now with the right skills? Who is going to be available in the future, and when? Sources of supply from outside the organization- what are the chances of being able to recruit the sort of people we need? Defining sources of future supply and reaching satisfactory conclusions on availability may be difficult. It depends on the university output and the specified disciplines graduates number etc.

Mathematical projections of trends in economy and developments, It's a judgmental estimates based upon specific future plans of the company
Elements of Organization Size Activities

Complexity Goals

Large companies More job categories More employees Larger geographical area of activity Need more complex forecasting For example: Compu facilities and skilled staff - necessary to make a sophisticated system Complex career path and Diverse skill mixtures Identify and bridge the Gap between organization's Current HR situation & Desired future HR situation Those who plan for future- need to implement plans

Plan and Strategies Organizational information

Organization can profit from a complex forecasting system

Determining Human Resource Demand Supply Requirements

1. Number required at the Beginning of the year
2. Changes to requirement and Forecast during the year 3. Total requirement at the end of year (1+3)

4. Number available at the beginning of the year

5. Accession from transfers and promotion 6. Separation through retirements, wastage Separation and promotions 7. Total losses (4+5+6) Requirements

8. Deficit / surplus (3-7) 9. Losses of those recruited last year 10. Additional Number required during the year (8+9)

Internal Supply Forecasting(ISF) Organizational Features (Staffing and Capabilities) Losses and Changes Productivity, rates of productivity change Rates of Promotion, Demotion, Transfer and Turnover control Training External Supply Forecasting(ESF) External Labour Market Factors (Retirements, Mobility, Education and Unemployment) Controllable Company Factors Entry Level Openings, Recruiting Compensation External Selection Executive Exchange

ISF+ESF HR Supply

Demand Forecasting Organization and unit Strategic Plans Size of the Organization Use of Managerial Resources, Other Human Resources Staff Support Organization Design > HR Demand

HR Demand + HR Supply

Net HR Requirements

Learning Curves: Predict the average number of units produced per employee will increase as more units are produced. Thus workers will learn to perform their tasks more efficiently over time. Simple linear regression: Uses information from the past relationship between the organizations employment level and some criterion known to be related to employment. For example Sale or work out put & the level of employment Learning curve can be used for more accurate projection of future employment levels. Multiple linear regression: More complicated quantitative methods involving multiple regression and linear programming further this process by incorporating operational constraints (example: budgets, mix of labor) into the mathematical models. It is possible to forecast demand under varying business scenarios. This may use several factors that correlate with labor needs. For example, Preparation for its collective bargaining negotiations, GM used several different sales figures, gross national product, gross domestic product, capital investments, and other factors to forecast labor needs for the next 6 years.

Screen 1 Name SS # Department Position Superior Date in Position Date of hire Screen 2 School attended High School Undergrad Graduate Doctorate Additional course work Certifications/licenses Additional training Company training Additional training recommended Screen 3 Title Present position Previous position Positions in company qualified for Screen 4 Company Prev.Empl Prev.Empl Screen 5 Areas of Company Positions Additional training/ education

Current employee data

Education data

Degree

Major

GPA

Year(s)

Company employment data Date in job Performance Ratings/Dates

Previous employment data Title From To Reference Quality

Express Interests/Goals

Quantitative Method of forecasting HR Demand

Moving average Exponential Smoothing Trends Projections Regression Linear Programming Actuarial Models Simulations Probability Matrix First order Markov Model Semi Markov Model

Method
Moving Average

Description

Advantage Disadvantage
Seasonal or cyclical patterns may be ignored Relies on past data

Simplicity, Averages data about HR demand Data easily from recent periods available and projects them in to future

Cyclical pattern Mathematical Exponential Forecasters can complexity Smoothing vary weights for HR in addition to demand assigned to moving average Choice of different past time method weights may periods used to project future HR be arbitrary demand Relies on past data

Method
Regression

Description
Mathematical formula used to relate staffing to several variables (output, product mix and per capita productivity) Assesses required staffing level that matches desired output levels, subject to certain constraints (budget, cost)

Advantage

Disadvantage

Can include Mathematical complexity many variables Requires large Efficient use sample sizes of all available data

Linear
Programming

Assesses Managers are what should skeptical of be in the highly future, not sophisticated methodology what probably will be. Numerous assumptions must be made

Method
Actuarial Models

Description
Relate turnover to such factors as age and seniority

Advantage
Reflect past

Disadvantage
May not be accurate in individual cases

Simulations

Use scenarios to test the effect of various personnel policies

Useful for Accuracy varies considering alternative HR programs Help identify career patterns Help perform turnover analysis Require some mathematical sophistication Accuracy varies

Probability matrixes

Define states in the organizationsuch as strategy levels, performance ratings Identify time period

Method

Description

Advantage

Disadvantage
Not adequate for long term forecasts Requires mathematical sophistication

First Order Multiply number of people Adequate for Markov in each job category by the considering Model probability of movement alternative between job/position effects of categories. Model various Hr assumes that current strategies job/position category is the chief determinant of movement
Semi Markov Model

Probability of movement is determined by job/position category and the individuals length of stay in the job class

More Not very useful inclusive than for considering a first order alternative Markov effects of Model various HR strategies Requires mathematical sophistication