There are effective tools available for planning manpower for a project or a designated production time in a company. Labor is one of the highest costs of production and effective labor planning can make the difference between business success or failure.

High labor costs are also responsible for high costs of goods and services. The more planning that goes into a business' labor force, the more savings can be passed on to the consumer.


A budget lays out the labor needed for the estimated production for the year. This gives management a labor framework to make hiring and scheduling decisions and to provide financial goals for the upcoming year.

Labor costs are usually estimated as a percentage of the product cost. For example, a hotel may have a 21 percent labor cost in the food and beverage department.

Labor Comparisons

Compare your labor force to that of a similar business. If the other business can produce the same product with less labor, you may need to adjust your labor accordingly so as to remain competitive.


Cross-train your employees to move between different jobs. This will reduce the number of employees needed and an employee will be better able to get full-time hours during slow times if he has the capability of working more than one position.

Creative Scheduling

One of the best means of effectively planning your labor is through the use of creative scheduling. Scheduling software assists in controlling and monitoring employee labor. You will be able to track overtime, employee breaks, attendance and scheduling conflicts, and this will enable you to foresee future hiring needs.

Human Resources Involvement

Engaging the use of the human resources department to recruit the right people for the right positions will reduce absenteeism and turnover -- both of which can cost a company thousands of dollars per year. More emphasis on assessing prospective employees and their skill levels will also result in higher productivity.

Long-Term Planning

Long-term planning is the ability to look ahead and estimate the needs of the company three years or more into the future. Knowing where you want to be in the future will push management to a more aggressive approach to labor planning in the present.