Hi I would like to know about the different types of manpower planning policies used in a) an org with no expansion plans b) an org with major expasion plans c) a start up company. Bye Ronnie
From India, Calcutta
hi,ronnie/ The major poin t of concentratoin very high quality product highly skill labour very high welfare package


I have taken the liberty of answering your question, with a broad

approach , in order to give a complete picture .

The manpower planning is interlinked with Organization planning

and the HR planning , and one cannot be planned without the

support of the other two.

Whether it is a

-organization with no expansion plan or

-organization with major expansion plan or

-organization start up,

the conceptual approach is the same. You may not consider

all the elements in all cases.

Other important factors that need to be considered are

-investment dimension

-time frame

-product plan / range

-nature of operation [ mfg. marketing or mfg only or trading only etc]

-geographical coverage

-distribution / channel plan

etc etc.

These factors plus the corporate planning objectives / strategies

plus the consequences of the inbalances from the ANALYSIS &

INVESTIGATIONS would dictate the creation of MANPOWER/

HR planning strategies/ tactics [ policies/ procedures/practices etc]

The inbalances could come from

-organization circumstances

-opportunities and expectations

-requirements and availability

-behavioural consequences

-policy on organization structure

-policy on individuals



Manpower and HR plannings involves applying the basic planning

process to the human resource needs of the organization.

To be effective any MP/ HR plan must be derived from the

CORPORATE strategic plan of the organization. The success

of the MR/HR depends largely on how closely the HRdepartment

can integrate effective people planning with the organization's

business planning process.

Corporate business planning seeks to identify various factors

critical to the success of the organization.It also focuses on

how the organization can become better positioned and equipped

to compete in the market. This provides


-a clear statement of the organization's mission.

-a commitment from senior management to the mission.

-an explicit statement of assumptions.

-a statement of objectives / strategies.

-a plan of action in light of available or acquirable resources ,

including human resources.


MP/HR planning contributes significantly to the corporate

business process by providing the means to accomplish

the outcomes desired from the planning process. In essence

the HR demands and needs are derived from the corporate

strategic business plan and then compared with HR availability.



Once the corporate objectives , strategies and plans are outlined,

the directions are filtered down to the business units and

departments, involving all levels of management in the organizational

planning process.

The business units management and departments management

work closely with the HR management to determine the

people requirements to achieve their objectives.

Manpower planning has five essential elements:

* Analysing the current manpower resource

* Reviewing employee utilization

* Forecasting the demand for employees

* Forecasting supply

* Developing a manpower plan

While these can be seen as sequential steps, in practice thinking about manpower can begin with almost any of these. This is what makes manpower planning a dynamic process. For instance, a manufacturing function might want to introduce new machinery that will do a job to a better standard and more quickly. To justify the expenditure, the manufacturing manager will be expected to show a saving on labour, which may translate into fewer people. In another case, a downturn in business may provoke an urgent drive to reduce overheads and cuts in office staff. The point is that manpower decisions have been triggered outside the HRM function, and most certainly outside the hands of anyone who carries the title of manpower planner.

The other point that the two examples highlight is that planning can have a short­, medium‑, and long‑term aspect. The long term is necessary to provide a framework for managing broad trends. Long‑term planning should be done regularly and systematically, and plans kept under review. The short to medium term, however, is what matters to most managers.


Analysing the current manpower resource

Analysis and



Internal labour




Cohort analysis


Skills audit


Manpower system


External labour






Price [rewards ]









Skill change







New markets



Manpower system

Work methods



The starting point for planning is to have proper records of existing employees. Basic records cover:

* Personal data ‑ including date of birth (age), qualifications, special skills, and training record

* Position data ‑ including current job and work history in the organization

* Financial data ‑ including current pay, how this is made up (for example, overtime and shift premia), incremental scale, and pension rights.

Many of these details will traditionally be kept for payroll purposes.

*Headcount analysis, by age, service, skills, grades, and department. The overall profile of the workforce generated in this way is basic to any manpower planning system, and a vital aid to management decision making on things like redundancy. It can highlight impending problems, such as the retirement of a whole cohort of employees, and the need for fresh recruitment and training.


*Employee turnover, using data on joiners and leavers over a year. Along with headcount analysis, this is basic to forecasting supply. It may also identify problems ‑ for example, particular jobs where there is high turnover ‑ and stimulate corrective action

*Absenteeism and sickness. This will be especially geared to alerting management to problems and the need for corrective action. It will interact with other indices concerned with productivity (such as the amounts of overtime that are incurred simply to provide cover for absenteeism and sickness). Like turnover data, this information clearly needs to be generated on an on‑going basis, as distinct from basic records (the 'inventory'). It is likely to be a natural product of payroll data and the subject of regular reports from line functional management.

*Overall structure of the paybill, including how salary costs will rise with increments and reduce with new entrants at lower points in a scale

*Actual paybill against budget, with areas of variance.

Analysis in these various ways can identify significant issues of performance and productivity, and imbalances that may need to be corrected. It underpins the shift in manpower planning from macro‑forecasting towards the more problern­centred approach.


The audit activity described above may be supplemented from time to time by data from other sources concerned with how efficiently people are being used. Whether this is part of a normal auditing process will depend from company to company. Data on analysis of manning ratios ('directs' to 'indirects') is a case in point. This may come under review only when cost pressures or the example of a competitor cutting indirect staff focuses attention on labour costs. Many large organizations have permanent staffs using work study and O&M (organization and methods) techniques to undertake periodic reviews of working methods and the efficiency of staff levels.

Forecasting the demand for labour

At first, forecasting the demand for labour might seem straightforward. Unfortunately, it is not. The problem is how to convert volumes of work into numbers of people. Two of the favoured means for doing this are ratio‑trend analysis and the use of work study standards.

Ratio‑trend analysis

The basic principle here is to say if it takes six people, for example, to perform an existing amount of work, it will take twelve people to do twice as much. Organizations measure activity levels in a variety of different ways. The ratio between 'directs' and 'indirects' in manufacturing is a classic one.

Individual departments in an organization also will have their own rule-of‑thumb measures. A sales department, for instance, may have an idea of the number of customer calls a salesperson should make in a week, and, indeed, use this as one criterion for monitoring sales efficiency. If the business plan projects an increase in the number of new customers, this can be translated into a proportionate increase in the sales force.

The problem with measures like these is that they are crude. They take no account of economies (or diseconomies) of scale which affect efficiencies; nor of local conditions; nor of the potential of new methods and technology to increase efficiencies.

What ratio‑trend analysis can do is to provide ballpark figures, which then focus attention on ways of improving efficiencies and a closer look at the underlying implications.

Work study

Work study is a more systematic method, but limited to manufacturing, certain other areas of manual work, and large clerical functions. For it to be worth while and do‑able in the first place, an activity has to be repeated sufficiently often to generate a reliable standard and justify the cost of measuring it.


Forecasting supply has two components, internal and external. Forecasting external supply means understanding the impact on recruitment and retention of such factors as:

•Demographic patterns

•Levels of unemployment

•Developments in the local economy like transport, education, and housing

•The pay policies of other employers, locally and nationally, and their plans for growth and contraction.

While the HR function should be keeping a general eye on these as a matter of course, they are likely to receive closer attention when there are specific plans to grow a business and there is a perceived gap between requirements and existing skills and numbers of employees ('the manpower gap').

There are a number of simple ways of reflecting people leaving and joining:

• Crude labour turnover rate (or wastage index):

Number of leavers per period

------------------------------------------------------------------ x 100

Average number employed during that period

This shows the percentage of employees leaving over a period of time (say, in the course of a year). This rate can be then compared over time and with that of other organizations

* Stability index.,

Number of employees with one or more year' s service X 100

Number employed one year ago

This will show whether the workforce is generally stable or volatile. in conjunction with the crude turnover rate, it can help to focus problems. These may include whether the organization is failing to bring in new blood because of low turnover.

• Wastage / survival curves:

Having a picture of wastage patterns over time is a major help to an organization in:

*Planning recruitment and training to renew skills and experience

*Developing policies and practices to minimize the loss of valuable trained people

*Managing career progression

*Managing outflows through pension arrangements, and, if necessary, encouraging people to leave to make it possible to bring in new blood.

Wastage can be plotted in a number of different ways: for instance, to show when people tend to leave and at what rate according to length of service. This can be expressed either in actual numbers or as a percentage of joiners. Alternatively, by showing the cumulative impact of turnover.


-Full time tenured employee

-Full time self employed

-Full time employee , either temporary or without tenure.

-Part time

-job sharing

-annualised contract


Forms of flexibility

Flexibility at work can be defined as:

The ability of the organisation to adapt the size, composition, responsiveness and cost of the people inputs required to achieve organisational objectives.

Various forms of flexibility exist and common categories include functional, numerical and financial . Managers need to be able to distinguish between these forms of flexibility in order to be able to seize opportunities for increasing organisational flexibility, but they should also be aware of the problems.

Functional flexibility ‑ relates to the employer's ability to deploy people in response to work priorities and demands. It can be either horizontal or vertical. Horizontal implies a reduction in demarcation between activities and tasks at the same level as the job holder. Vertical functional flexibility involves the acceptance and performance of tasks and activities by employees at either a lower or a higher job level. Functional flexibility is closely associated with skills flexibility.

Numerical flexibility ‑ is the scope to expand or contract labour supply through altering the number of people employed in proportion to product or service demand. It relies on the quick and easy engagement and release of people through rapid recruitment responses and the use of fixed, short‑term or temporary contracts. Numerical flexibility also involves the increased use of agency staff and the sub‑contracting of work. It requires a managerial predisposition for using employee redundancy as a human resource practice.

Temporal flexibility ‑ is concerned with restructuring working hours to increase organisational responsiveness to work demands. It has the aim of maximising productive time and minimising unproductive time and may be formal or informal. Formal temporal flexibility can be achieved through the use of annualised hours arrangements and through zero or core hours contracts.

Financial flexibility ‑ increases the ability of the organisation to control employment expenditure. It is pursued in a number of ways. First, through the use of local market rates to determine the commercial worth and the reward package of employees to ensure that no more than necessary is paid. Second, through the use of individual pay arrangements instead of collectively regulated and uniform pay levels; for example, performance‑related pay and profit‑related pay. Third, through shifting from national or central bargaining to local bargaining arrangements to intensify the linkage between employment costs and local affordability. Fourth, through the use of non‑consolidated bonus pay and non‑pensionable payments to avoid consolidated payments which relentlessly and permanently increase the pay bill.

Skills flexibility ‑ incorporates not only skills development and acquisition, but also employee receptiveness to the updating and extension of the skills necessary to reduce Job demarcation and promote employee versatility. Skills flexibility may be vertical or horizontal through a deepening or a widening of the employee's skill base.

Atitudinal flexibility ‑ infers a specific focus on the encouragement of flexible employee attitudes characterised by a receptiveness to learning new skills, a willingness to engage in functional flexibility and a responsiveness to changes in working practices or management approaches. Flexible attitudes and behaviour can be recognised, rewarded and reinforced through integrated human resource practices and the management of corporate values.

Learning flexibility ‑ links to the concept of the learning organisation, broadly defined as an organisation which continuously transforms itself through the ability of its members to learn. The development of learning flexibility by employees includes a willingness to unlearn familiar and comfortable ways of working. Learning flexibility is associated with contemporary HRD philosophies, quality management and Investor in People standards.

Structural flexibility ‑ as an objective is a response to concern that organisational hierarchy may reinforce job specialisation and restrictive working practices and consequently inhibit flexible working and organisational responsiveness. Team‑working, matrix organisation, project working, lateral job moves, delayering, empowerment and process re‑engineering offer opportunities for increasing flexibility through fluidity of organisation structure.

Distance flexibility ‑ is achieved through utilising technology. Work may be undertaken in locations remote to the work organisation through teleworking and the exploitation of electronic mail, facsimile transmissions, telephone links and video conferencing effectively making distance extinct.

3 Planning and


*working patterns

*organisation structure and development

*recruitment and selection

*equality of opportunity

*pay and reward

*performance management


*health and safety


*training and development

*employment relations

The following are some areas a manpower plan may seek to address:


How many and what types of people are required?

Should recruitment or internal development and transfer be preferred, and why? For instance, are there imbalances where transferring people would avoid a redundancy problem and solve a recruitment one?

What problems exist with recruiting, and how might these be overcome? Might less conventional contracts (such as job‑share) tap new sources of recruit?

What is a realistic/ necessary timetable for recruitment, and how should it be done?

*Training and development:

Given the number and types of people required, how desirable is it that they should be trained from within, and what is the capacity of the training and development system to deliver them?

Where will trainees come from ‑ from among existing employees, through those already in the pipeline, or new recruits who will first have to be recruited?

How will trainees be selected, either from within or without?

What kind of training programme is required, what are the implications of taking people off‑the‑job, who will run it, how will it be resourced, what will it cost?

What are the requirements for developing people, such as managers, over the longer term?

Is the organization making full use of the potential of all employees, such as its women, in training and development?


Is the problem retaining people too long or losing them too soon? Are skills and experience being lost or getting stale?

Is pay too low, compared with the competition?

Are there inequities in the pay for different groups?

Is the career system holding people back and frustrating them? Is promotion unnecessarily slow?

Are people being passed over in favour of outsiders because they are not being prepared for promotion through training?

Is the organization recruiting too many high flyers, all of whom it cannot hope to satisfy?

Are new recruits being given realistic information about the organization and their prospects?

Are selection processes recruiting the right people?

Are new recruits being given adequate initial training?

Are working conditions satisfactory?

* Redundancy

How far can people be lost through natural wastage or redeployed?

What do the organization's agreements say about the procedures for handling redundancies? For example, does LIFO ('last in, first out') limit the organization's choice about who goes?

How and when should it be announced, with how much consultation?

How is redundancy pay determined?

Who should be selected, how, and when?

How far can redundancy be managed voluntarily, and does the organization want to place any restrictions on this to avoid losing key people?

What can and should the organization do to help people to find new jobs?

What do the redundancies mean in terms of reorganization to secure cover for work, and are there training implications for employees who remain?

How long before the redundancies pay for themselves in salary and wage costs saved?

Presented like this, the 'manpower plan' is less a detailed written document, than a process set in train to deliver (or discard) specific numbers and skills. The 'plan' may set targets and an outline timetable, but the detail will be filled in as people work through the implications asking questions such as those above. At this stage, it is vital then that proposed actions in one area are continually tested against those in others to ensure a coherent, integrated response. This is a social process of people talking to one another, not a backroom analytical process.

Organizational skills inventory [ all elements mentioned above ] plus the anticipated

changes [ deaths/discharges/resignations/promotions/transfers/retirements]

would lead you to net HR rquirements through

[ recruitment/selection/orientation/development etc etc. ].



Taking cues from the various analysis as mentioned above,


-freeze recruitment [ except for special cases ]

-reduce manpower by natural wastage.

-partial ban on new recruits

-increase training programs

-increase development programs

-reduce overtime

-reduce turnover

-increase productivity improvements

-restructure organization [ if needed]

-make performance managemant effective.

-restructure rewards system

-intriduce skill changes

-monitor the employee age distribution

-need based reward system

-career planning on merits .

-create opportunities by moving staff.

-reduce expectation by counselling

-using various combinations of flexibility

etc etc

----------- ----------------------- ------------------ -----------------


-smart recruitments

-high overtime leaning

-monitor wastage / reverse it

-increase/ faster training

-accelerated development program.

-increase labor contract

-hoarding of manpower

-increase outsourcing

-pay for performance

-market oriented reward system

-smart career planning

-faster / effective induction

-smart orientation program

-monitor labor market demand / supply

-detect people with potential at an early stage

-explore unusual career paths

-use external recruitment for unusual positions

-using various combinations of flexibility

etc etc

----------------------- ----------------------- ----------


-smart recruitment


-use market oriented rewards

-faster / effective induction

-smart orientation program

-monitor wastages

-manage expectations by counselling

-plan ahead on career management

-using various combinations of flexibility

etc etc

You can add or delete more elements as your situation demands.




From India, Mumbai
leo i really appriciate u r concern for each and every induviduals quiry thanks a lot i hope you would continue with tihs to help people like me thank you gopi
From India, Chandigarh

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