MANPOWER PLANNING

Manpower Forecasting Manpower forecasting is assessing the anticipated increased manpower demands in an organization over a specific period . Manpower forecasting is concerned with the projection of future manpower requirements both in their quantitative and qualitative aspect as necessitated by any changes in technology, methods of production, activities of the organization and thereby changes in organization structure.

Influencing factors in Manpower Forecasting 1)Socio-political environmental changes 2) Changes in all spheres ie. – technological, mechanization and automation. 3)General economic conditions and market trends 4)Change in societal values and norms 5)Changes in both – internal and external labor market .

Forecasting Needs for Human Resources This is the first essential ingredient of HRP as it helps in forecasting needs for human resources in an organization over a period of time. Forecasting does not depend on the scale of operations alone ,but other factors also affect it such as change in machine-man ratio , change in productivity etc.

Years ended March 31 1999 1997 1995 1992 1985 Sales (Rs. In crore)14533 8730 7019 2953 733 Employees (numbers)16640 16778 12560 11940 9066 The table shows that volume of operations has increased at a faster rate than the number of employees at Reliance Industries.

Forecasting of human resources requirements serves the following purposes : To quantify the jobs necessary for producing a given number if goods or offering a given amount of service. To determine what staff-mix is desirable in the future. To assess appropriate staffing levels in different parts of the organization so as to avoid unnecessary cost. To prevent shortage of people where and when they are needed most . To monitor compliance with legal requirements with regard to reservation of jobs

Techniques for Forecasting of Human Resource Needs In case of forecasting human resource needs in an organization, there is less emphasis on highly quantitative techniques because of emphasis on qualitative aspect of forecasting.

Techniques for Forecasting of Human Resource Needs 1)Managerial judgement method. 2)Delphi technique. 3)Nominal group technique. 4)Cross –impact analysis. 5)Work-study technique. 6)Ratio-trend analysis. 7)Statistical and mathematical models. 8)Replacement Charts. 9)Scenario analysis. 10)Questionnaires or interviews.

Managerial judgement method. This is the most commonly practiced and conventional method of forecasting human resource needs. Here the managers prepare the forecast of human resource needs of various categories in their respective departments based on their past experience. This method can be applied in two alternative ways: Top-down approach or Bottom-up approach

Delphi Technique. This technique is used in group decision making in the present world. In a conventional Delphi technique – a small group designs questionnaire about the problem under study. This is then sent out to experts in that field to be filled by them independently. The filled questionnaires are analysed by the designer, and if any divergence in opinions of experts, a revised questionnaire is prepared and sent to a larger group. This exercise is repeated till some consensus is reached.

Delphi Technique Delphi technique is useful when the problem cannot be solved by using analytical techniques but its solution requires subjective judgements on collective basis. For example , what will be the trend of fashion next year, can be known by using Delphi technique.

Delphi Technique It can be used for forecasting human resources needs in two forms: First , it can be used to know the trends for changing job profile and consequently ,the changing personnel profile across the country or international level. Second, this can be used to solicit views of experts in different functional areas of an organization about the changing profile of personnel in their respective department in the light of changing environment.

Nominal group technique A small group format, strategist generate their individual HR strategy preferences, discuss their assumptions about jobs, people ,and HR department. Individual predictions about positive and negative consequences or advantages and disadvantages of HR grand strategies are shared and then they vote on an HR strategy and thereby reach consensus on action.

Cross-impact analysis Results generated by using Delphi techniques and the Nominal group technique, strategists estimate the probability of various consequences – such as increased turnover , for example – growing out of an HR grand strategy , assess interrelationships between consequences – that is ,the chances that one action will create numerous reactions in the HR system, - and compile results.

Work Study Technique. Work study technique is based on the volume of operation and work efficiency of personnel. Volume of operation is derived from the Organizational plan documents. Work efficiency or productivity is measured by time and motion study which specifies standard output per unit of time Planned output standard output per hour * standard hours per person

Work Study Technique Forecasting of manpower requirement by work study technique at constant at increased productivity productivity (10%) Standard output per annum 10,00,000 10,00,000 Standard output per hour 5 5.5 Standard hours per person per annum (300*8) 2400 2400 No of persons required 83 75

Ratio – Trend Analysis. In a Ratio – Trend analysis the main emphasis is on the ratios between production/sales level and direct operatives, direct operatives and other personnel ,say supervisory and managerial personnel. Year no of no of operatives operative supervisors supervisor ratio Actual 3 years ago 1,000 100 10:1 2 years ago 1,200 120 10:1 Last year 1,500 125 12:1 Forecast Next year 1,800 150 21:1 After 2 years 2,000 154 13:1 After 3 years 2,200 157 14:1

Statistical and Mathematical Models. Besides the above techniques, there are certain statistical and mathematical models which may be used for forecasting human resource needs. Burack-Smith model: Burack-Smith model for personnel forecasting is based in the selected key variations that affect an organization’s overall human resource needs. En = (Lagg + G)/ X Y

Burack-Smith model En = (Lagg + G)/ X Y En= estimated level of human resource needed in n plan period. Lagg= total business activity in n period based on current prices. G = total growth in business activity in n period based on the current prices. X = average productivity improvement in n period over the current period. (if X =1.08, it means average productivity improvement of 8 %) Y = business activity –personnel ratio in the current year. (business activity divided by number of personnel). The main purpose of this model is to calculate EN that is the personnel required in future (n period) and for this purpose ,Lagg , G , X and Y variables have to be measured.

Statistical and Mathematical Models. Regression Analysis: Regression analysis identifies the movement of two or more interleaved series. It is used to measure the changes in a variable (dependent variable) as a result of changes in the other variable (independent variable). Econometric Model : The word econometric is made up of two words ‘econo’ and ‘metric’ referring to the science of economic measurement. An econometric model expresses relationship among different variables ,both dependent and independent , and based on those relationships , economic growth of an economic system is measured.

Replacement Charts. In case of managerial personnel, some firms use separate inventory system usually in the form of replacement charts , as they are sometimes called manning tables. These charts generally contain: The age Years of service put in the organization Current performance and past performance Promotion potential and how soon Possible replacements

Scenario analysis Strategists are furnished with a narrative description of the organization as it exists at a future time. They are then asked for opinion about the likelihood that the future will come to pass, what kinds of jobs , people and HR department practice area initiatives will be needed , and what HR grand strategy is likely to be most instrumental in creating the desired future.

Questionnaires or interviews. Strategists are asked about their HRP strategy preferences ,likely outcomes, and relative value of each strategic alternative. A management committee then receives the results, where they are deliberated and a strategy is chosen.