Manpower planning is critical to the smooth functioning of any organization. It is a process by which the human resources (HR) department attempts to place the correct number of employees in appropriate positions based on their skills and in the most appropriate time frame to meet the organization's needs. The HR department undertakes this exercise at least once annually. The staffing levels across the organization are analyzed and reports are prepared on the subject.

Evaluate Staffing Levels

The main purpose of conducting manpower planning is to maintain proper staffing levels. The HR department prepares a list of personnel working in all the departments of an organization. Next, it evaluates the importance and relevance of every department in achieving organizational objectives and goals. Then it estimates the number of employees required in each department. The HR department then transfers employees from the overstaffed departments to understaffed ones to maintain optimal staffing levels.

Plan for Expansion

Whenever an organization is expanding, manpower planning becomes critical. With this planning, the organization is able to estimate additional staffing needs and begin its recruitment process. Also, the organization is able to budget for the additional employees' salaries.

Plan for Downsizing

Sometimes it becomes mandatory to terminate the services of some personnel. The reasons for this could be varied. These employees might not be contributing to the success of the organization or the organization's production levels or demand for its services may have decreased, requiring fewer employees. The role of HR is to prepare a list of the number of employees required by each department and to evaluate which employees to retain and whom to terminate.