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What are the components of manpower planning?

Posted by: Mansour Baker

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 roadmap 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's 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 the workforce needed.
• 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 in 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

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

1. Workforce baseline assessment 
2. Supply analysis 
3. Demand analysis 
4. Workforce gaps and risk analysis 
5. 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.
• A 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).

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