Importance of Manpower Development in an Organization

by Catherine Capozzi ; Updated September 26, 2017

When nations and businesses allocate resources to develop their workforces, the benefits are not just realized by the workers. The human resources department helps an organization with its development by assessing the changing needs of the organization and equipping its workers with necessary tools. While employees may be the direct recipients of development programs such as tuition reimbursement and additional training, companies gain in the short and long term as well.

Economies of Scale

Manpower development helps an organization achieve economies of scale. This occurs when the business produces goods at the lowest possible price as a result of its capital operating at peak efficiency. Capital includes machinery, equipment and employees. Manpower development strengthens the skill set and know-how of workers, enabling them to increase their output or develop innovative, new products. Thus, the company lowers the cost of production when workers have a stronger skill-set with which to do their job. The human resources department plays an integral role in ensuring this benefit by finding appropriate workers for positions; in addition to screening resumes, human resources assesses intangible attributes such as attitude and willingness to learn new skills.

Competitive Advantage

Companies also gain a competitive advantage by implementing manpower development programs. As explained by Marcus Powell in his book, “Skill Formation and Globalization,” the backbone of a smoothly running, well-developed economy is a knowledgeable, skilled labor force. When a business offers extensive training and worker enrichment programs, workers who benefit from the training become more valuable. A skilled labor force increases a nation’s output, thereby boosting its gross domestic product. Other companies benefit indirectly from such programs as well in the event that an employee transfers from one organization to the next.

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Job Satisfaction

According to Dhirendra Kumar, author of the book, "Enterprise Growth Stategy," one of the most critical components of job satisfaction is the belief that the position offers room for growth and improvement. Manpower development assists the organization with imparting this sense of worth onto the worker. The human resources department may devise programs that may promote job satisfaction. An example includes hosting a writing seminar for a publication’s group of journalists or even providing fringe benefits such as gym memberships.

Employee Retention

Jack Phillips, author of "Managing Employee Retention," explains that workers are less likely to seek other job opportunities when employers have a stake in their growth and development. Additionally, a benefit of accurate labor forecasting is workers not feeling stretched too thin as a result of too few employees. Thus, successful manpower development programs decreases turnover. Though such development programs may have high initial costs, the cost savings deriving from decreased employee turnover may outweigh the fees associated with the program.

About the Author

Since 2008 Catherine Capozzi has been writing business, finance and economics-related articles from her home in the sunny state of Arizona. She is pursuing a Bachelor of Science in economics from the W.P. Carey School of Business at Arizona State University, which has given her a love of spreadsheets and corporate life.

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