Factors affecting manpower planning are often divided between internal and external circumstances. Businesses must plan for hiring, turnover, recruiting and market conditions to ensure that the required manpower is available and trained in their relative job roles. Maintaining a labor force is not always easy, and economic conditions often dictate what manpower is available.
Internally, manpower is influenced by planning processes that human resources has implemented. The HR team must meet with the managers and executives to determine which job roles within the organizational structure require manpower.
After determining the number of individuals required – along with the skill sets and requirements – the team can plan a hiring process to fill those roles. This advanced planning ensures that ample manpower is available.
However, the planning process struggles when poor organizational structure and planning leads to ambiguity about the company's required manpower. Revisiting operational planning and processes to create a well-defined business structure will encourage a better planning process for the internal manpower requirements.
Other internal factors affecting manpower are increases or decreases in demand for the company's product or service. Based on earnings reports, strategic planning and company trends, manpower is adjusted to serve the output requirements that the business has set internally.
For example, a manufacturing business that's planning to introduce a new product to the market must plan a manpower increase to execute production, before releasing the product into the market.
Market conditions have a major influence on manpower. In a positive job market, planning for manpower is often difficult, because many in the labor force are employed and a labor shortage can occur. This puts a premium price on labor, and, often, businesses are forced to raise their wages in order to compete.
During a slow market, the labor force is often available and hungry, thereby making planning and hiring easier. The availability of work, however, may require a reduced amount of manpower, thereby forcing the business to cut back on hiring.
Ideally, the market is stable and the business has steady demand for manpower, as well as a reasonable pool of candidates who can fill positions, while also managing turnover. However, market conditions change frequently, leaving a supply-and-demand dynamic within the labor force. Planning - and even anticipating these fluctuations - serves to benefit the business, as the business can acquire manpower ahead of the competition.
Manpower planning is critical for maintaining a highly functional workforce. Poor planning can lead to shortages, thereby slowing production, as well as the ability to complete tasks efficiently. This hurts revenue – and ultimately – it costs the business some valuable opportunities for acquiring capital.
Alternatively, over hiring as a result of poor planning will bog down the business. Excess costs are routed to wages for employees that are not necessary. The associated costs are damaging, and the company must eventually deal with layoffs and cutbacks, as a response.
The primary reasons for manpower planning are the following: Creating a labor force for the business and the ability to manage turnover efficiently, as well as the company's recruiting and training processes. In some cases, this means hiring similar job roles in batches to move a group through training and into the new job roles quickly and effectively.
Knowing the ongoing needs and the seasonal fluctuations associated with manpower also leads to a better recruiting process. Listing job openings and managing applicants will flow, based on these projected needs. The advanced planning streamlines the process and avoids a last minute rush to hire and to place employees in the labor force.