Manpower planning, otherwise known as human resource planning (HRP), is about ensuring your business has the right employees in the right place at the right time. The process of manpower planning is vital to the success of your business. If you spend too much money on staffing needs, hire the wrong people or put them in the wrong department, it can have catastrophic consequences to your bottom line. On the other hand, getting it right can take your business from average to exceptional, grow your bottom line and help you stand out in the marketplace.
Factors Affecting Manpower Planning
Several factors affecting manpower planning will influence when, how and who your business hires to represent you. Some of these factors are internal, while others are external.
- Environmental Variables: Politics, the stock market, natural disasters and economic fluctuations all impact the marketplace, including your business. This is one of the factors affecting manpower planning over which you have no control. The best course of action is to have contingency plans that take these factors into account so you don't have to do as much scrambling at the last minute.
- Timing: Certain industries are more stable than others, so your timing in executing manpower planning is important. If you're in an industry that experiences frequent or drastic changes, focus on short-term human resource planning that looks ahead to the next six months or year. More stable industries might give you the flexibility to plan ahead five or more years into the future.
- Organizational Type: Nonprofits that rely on donor income in order to pay employees might have less stability than a corporation that pays its employees by growing its bottom line. Similarly, a small two-person business must be more careful about hiring than a corporation with 23,000 employees that has more wiggle room in the budget should something go wrong during hiring.
- Information: A company's manpower planning efforts are only as good as the data informing them. Data about market conditions, demand, labor supply, growth rates and more must be high quality and current to truly be effective in positively influencing human resource planning strategies.
- Organizational Growth: The rate at which your business is growing largely determines how hiring will go for you. A tiny one-woman show might only need some administrative or web help a few hours a week. On the other hand, an exploding tech company might have to hire hundreds of people very quickly in order to meet the rate of growth. Similarly, planning for retirement or layoffs is different for small and large organizations.
- Labor Supply: No matter how badly your business needs quality employees, your ability to hire them has just as much to do with the labor supply as it does with your ability to pay new hires. If your patent researching company requires several new employees with a Ph.D. in chemistry, it will be harder to find employees than if you own a burger joint and need new people to work the register.
Process of Manpower Planning
The process of manpower planning involves a number of steps that vary, depending on which experts you consult. The Treasury Board of Canada Secretariat recommends a five-step human resource planning process that looks something like this:
- Review Business Goals: Review where your business is now, where you want it to be, your budget and how your current staffing strategies are working.
- Consider External and Internal Factors: Examine external factors like politics, market trends, economic environment, legislation and changing social values. Don't forget to consider internal factors, including your current employee base.
- Identify Human Resource Gaps: When you understand your business's goals and have a solid grasp at the external and internal factors influencing manpower planning, you should be able to see where your gaps are. What new skills are needed? Where are there too many, too few or the wrong people in any given department? Don't forget to consider succession planning and take diversity into account.
- Draft a Plan: With a solid idea about where your gaps are, it's time to draft a plan to close the gaps. This could mean additional training, hiring, layoffs or other measures. Good communication of the plan is essential to getting employees on board with the direction you are headed.
- Track Progress: Evaluate how your manpower planning efforts are working for your organization. Look for numbers affirming that the plan is closing the identified gaps in employment or skill set. Using those numbers, you can tweak your human resources plan to achieve the best results.
Objectives of Manpower Planning
The objectives of manpower planning are numerous and all aim to contribute to the stability and growth of your organization. In order to be the best you can be, your company needs the right employees working in the right place at the right time. The following objectives of manpower planning can help you achieve that result:
- Avoid employee shortages: Good human resource planning takes into account the amount of time it takes to find qualified workers, as well as where and how to best recruit them.
- Avoid employee surplus: Manpower planning can help your organization avoid an employee surplus that results in lower wages, fewer available working hours or layoffs.
- Effective employee selection: Human resource planning involves identifying proper candidates, screening them effectively, interviewing them strategically, selling your position convincingly, hiring them wisely and onboarding them purposefully.
- Increased productivity: When the right people are in the right place at the right time, productivity goes up, as well as quality and customer satisfaction.
- Increased profits: When productivity goes up, costs go down, increasing your bottom line and helping your company grow exponentially.
- Resilience: Successful manpower planning takes into account variables that could dictate a need for change so that your company can better weather the storms of political and economic shifts and cycles.
Finding Outside Help
Larger companies tend to have human resources departments to help with manpower planning, the hiring process, onboarding, employee disputes and more. In smaller businesses, it's common for the owner to manage these responsibilities all on their own. If you're the only employee of your business and just need to hire help for 10 hours per week during the busy season, this is probably okay. However, if your small business experiences sudden growth and you need to change your manpower planning efforts to account for onboarding several new employees, you might begin to feel a bit lost.
When you need help with manpower planning, consider hiring a human resource planning consultant. These specialists can walk you through the process of manpower planning by providing the following services:
- Examining your rate of growth to determine hiring needs.
- Advising you on wise policies and procedures.
- Connecting you with headhunters.
- Ensuring compliance of new human resources policies.
- Developing a human resources department.
- Drafting new human resources policies.
- Conducting audits.
- Providing teaching seminars about human resources.
- Developing and implementing needed changes.
- Constructing data systems to inform future manpower planning decisions.
- Recommending manpower planning solutions.
Although you'll invest money for a human resources consultant initially, having a solid human resources plan can be a good investment. You could avoid lost income from wrong hires, overstaffing, understaffing, lack of training, improper policies and unsound procedures.
- Business Management Ideas: Manpower Planning: Meaning, Factors, Objectives and Principles
- Investopedia: Human Resource Planning (HRP)
- Management Study HQ: Factors Affecting Human Resource Planning
- International Journal of Research in Business Studies and Management: Human Resource Planning as an Important Practice to Anticipate Future Human Resource Requirements of the Organization
- Treasury Board of Canada Secretariat: Five Essential Steps to Human Resources Planning
- Poppulo: Human Resource Planning: Process Steps
- Wilson HCG: Four HR Goals and Strategic Objectives to Make 2019 a Success
- MaRS: Six Essential Steps in the Hiring Road Map
- Management Study HQ: HR Demand Forecasting
- Forbes: Planning And Forecasting For The Professional Services Firm Of The Future
- Human Resources EDU: How to Become an HR Consultant
Anne Kinsey is an entrepreneur and business pioneer, who has ranked in the top 1% of the direct sales industry, growing a large team and earning the title of Senior Team Manager during her time with Jamberry. She is the nonprofit founder and executive director of Love Powered Life, as well as a Certified Trauma Recovery Coach, certified HRV biofeedback practitioner and freelance writer who has written for publications like Working Mother, the San Francisco Chronicle, the Houston Chronicle and Our Everyday Life. Anne works from her home office in rural North Carolina, where she resides with her husband and three children.