What are the components of manpower planning?

Q: What is manpower planning?

1.) A strategic management tool for aligning workforce capabilities with mission and goals 2.) Regular and systematic assessment of our ability to match workforce capabilities with organizational needs 3.) Integrated with strategic plans, line management priorities, budget process, diversity goals, human capital plans, union agreements, etc. 4.) A process that involves managers at all organizational levels and representatives from HR, strategic planning, and budgeting

Q: What is not manpower planning?

1.) Just a data collection exercise 2.) A one-time event 3.) Just an HR activity 4.) A process conducted by a small, isolated group

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What are the components of manpower planning?

By Mansour Baker, SHRM-CP

Posted: 16 February 2020 | Revised: 14 September 2021

Introduction to Manpower Planning

Manpower planning is the strategic alignment of an organization’s people resources with current and future business needs.

What is manpower planning?

A strategic management tool for aligning workforce capabilities with mission and goals
Regular and systematic assessment of our ability to match workforce capabilities with organizational needs
Integrated with strategic plans, line management priorities, budget process, diversity goals, human capital plans, union agreements, etc.
A process that involves managers at all organizational levels and representatives from HR, strategic planning, and budgeting

What is not manpower planning?

Just a data collection exercise
A one-time event
Just an HR activity
A process conducted by a small, isolated group

Effective workforce planning methodologies will enable a company to develop a strategic road-map regarding its workforce.

Manpower Planning Components

1. Strategic Business Definition

Identifies core business areas to be covered by Workforce Planning
Establishes scope of initial analysis

2. Supply Analysis

Analyzes members of the organization who perform work
Identifies demographic segments of the workforce, such as age, position, and functional alignment

3. Demand Analysis

Analyzes the amount of work personnel must accomplish
Indicates the amount of work by customer segment

4. Gap Analysis

Utilizes information uncovered by the Supply and Demand Analyses to identify future trends that will affect the size of the workforce and the amount of work requested of it
Predicts future workforce size and its ability to meet future demand

5. Road Map

Develops a plan for addressing issues identified by the Workforce Planning Gap Analysis (e.g., recruiting, succession planning, retraining of existing workforce, etc.)

Exhibit 1

Manpower Planning Process

Workforce Supply Analysis

A workforce supply analysis provides a data-driven model of a company current composition and characteristics.

A workforce supply baseline analysis:

Helps the organization better understand the workforce’s current and future characteristics and capabilities
Uses existing workforce data to analyze and profile the current employee workforce in terms of numbers, demographics, and representation – essentially providing a snapshot in time

Results from the supply analysis will:

Allow leadership better to understand current workforce resources
Identify areas that may require attention to ensure the future supply of particular workforce populations
Inform the development of future target workforce objectives, including desired size, composition, and mix
Allow a basis of comparison against the future workforce requirements may be assessed, so that key gaps may be identified and addressed

Exhibit 2

A structured approach should be utilized to develop the workforce supply analysis.

Workforce Demand Analysis

Analysis of baseline demand provides a quantifiable, multi-perspective view of the utilization of core organization services.

The workforce demand baseline analysis:

Defines the core functions performed by the organization to address customer demands
Provides a structured means to measure activity levels associated with the key functions performed in support of the company’s customer base

Results from the demand analysis will:

Provide leadership with a consolidated view of services utilized by customers
Highlight areas that may require attention to maximize efficiency in the delivery of services
Inform the evaluation of future demand, including service composition and customer segmentation
Allow a basis of comparison against which the future workforce requirements may be assessed, so that key gaps may be identified and addressed

Exhibit 3

A structured approach to integrate the data elements involved in the baseline demand analysis.

How to develop an effective workforce planning?

To develop a workload-based workforce planning approach and methodology according to industry and international best practices and train human resource staff members on its administration and associated tools.

Objectives

To enable the company to achieve and sustain a balance between demand for and supply of needed workforce.
To identify areas with the greatest risk of misalignment or gaps and to develop mitigation strategies and recommendations to address identified gaps.

Near Term (1-6 months) Initiatives

Develop a strategic workforce plan/workload-based workforce planning approach and methodology according to industry and international best practices.
Train HR staff members on the administration of the new workforce planning approach and associated tools.

Medium Term (6-12 months) Initiatives

Manage expectations and train concerned stakeholders on workforce planning process.
Train front line department heads to implement strategic workforce planning at the unit level.
Deploy methodology to identify optimal staffing levels for the company and all its functions.

Exhibit 4

Manpower planning is work-load based for accurate projections

How to develop an effective workforce planning?

Key Activities

Conduct baseline assessment of workforce to evaluate work predictability and volatility, key measures, etc.
Undertake supply analysis focused on workforce and competency supply
Conduct demand analysis to assess workload and competency demand
Carry out workforce gap and risk analysis
Working group of company staff to assess desired framework for revised workforce planning approach
Develop company’s strategic workforce plan

Key Deliverables

Workforce baseline assessment
Supply analysis
Demand analysis
Workforce gaps and risk analysis
Strategic workforce plan and approach

1. Workforce baseline assessment

Assessment of current company workforce planning methodology.
Evaluation of work predictability and volatility and defining key measures of organization performance.
Definition of up to 10 mission critical occupation types/position groupings upon which to focus analysis.

2. Supply analysis

Detailed baseline of company’s current workforce attributes (current staffing levels/mixes, key workforce trends that affect the size and mix of future workforce supply, etc.).
Assessment of the extent the workforce possesses those competencies deemed most important for successful job performance by assessing current proficiencies (informed by demand analysis).

3. Demand analysis

Baseline of how work is distributed, and current levels of staffing are used.
Definition of anticipated changes in the nature, type, and/or quantity of the work.
Evaluation of future requirements for numbers, types, and levels of employees.
Definition of competencies that are required for successful job performance.

4. Workforce gaps and risk analysis

Assessment of the level of risk associated with those gaps or surpluses.
Working group of selected company staff to assess desired planning framework.
Draft recommendations on workforce planning methodologies.

5. Strategic workforce plan and approach

Assessment and prioritization of identified gaps and identification of critical mismatches between current and future workforce and competency requirements.
Integrated workforce planning strategies to effectively bridge or close the workforce and competency gaps.

How to calculate manpower full-time equivalent employees?

Three key design principles are considered in order to develop manpower requirements:

1. Lean Organization

Manpower requirements should be optimized ensuring the building of inhouse capabilities according to company needs and management & oversight of other outsourced functions continuously or on an as-needed basis.

2. Increasing Efficiency Factor

An Efficiency Factor is adopted to account for the increasing efficiency / productivity of manpower with time for repetitive tasks, allowing the same workload to be completed by less FTEs.

3. Organization Phasing

Manpower requirements for each function depends on the organization lifecycle stage of a given company.

How to calculate manpower FTEs?

The manpower requirements are calculated by estimating workload volumes and FTE/driver ratios.

Workload Volumes * FTE Efficiency Ratios = Output (Required FTEs)

1. Workload Volumes

Workload volumes for each functional activity. For example, 4 feasibility studies per year.

2. FTE Efficiency Ratios

Number of FTEs required for a given activity. For example, 0.5 FTE per feasibility study.

3. Outputs

Required FTEs for each activity. For example, 2 employees required in a year (4*0.5 = 2 FTEs).