The manpower planning process is a set of tools that help determine the needs, standards and scope of job positions in an organization. The complete process will help organizations have an effective, fair and transparent labor system, contributing to improving productivity, quality and employee satisfaction.

What is workforce planning?

Workforce planning is understood as the process of determining and classifying the roles, powers, responsibilities and tasks of members in an organization. This can also be simply understood as the process of calculating the number of employees a business or organization needs to meet operational needs.

Workforce planning is determining the number of employees an organization needs for each specific job position, ensuring all conditions for productivity and skills to meet the workload and set goals of the organization. On that basis, this is an important task of a Human Resource Department to help cut unnecessary staff costs of the enterprise.

Meaning of workforce planning

Workforce planning is an important factor in managing a business’s human resources. It has many important meanings as follows:

• Ensuring enough human resources: Workforce planning helps businesses determine the number of employees needed for each position and department to ensure work is completed effectively.
• Improve labor productivity: When there are enough human resources with appropriate skills, work will be completed faster and more effectively; avoiding work overload helps employees focus and complete assigned tasks well; create a professional working environment and improve employee morale.
• Employee development and management: Workforce planning helps identify training and development needs for the unit’s employees. This activity contributes to helping organizations identify the necessary skills to improve the working capacity of current employees, while preparing for future advancement.
• Cost savings: Businesses only need to pay for the number of employees that meet actual needs. Avoid wasting costs on recruiting, training and managing redundant employees, thereby increasing the efficiency of using capital resources of the business.

Conditions for businesses to implement workforce planning

At the company level, conditions for implementing workforce planning include:

• HR strategic direction needs to be clear and specific.
• A specific, methodical business plan with a budget and scenarios that can respond to unexpected challenges.

Conditions for implementing workforce planning at the department level include:

• Determine in detail roles, powers, and job positions.
• Determine the tasks, the frequency of tasks as well as effective work procedures and processes.
• Clearly define proficiency expectations and estimate output results for each specific job position.
• Understand the level of automation application in data management and work deployment systems.

3 principles of human resource planning

To implement staffing effectively, there are three basic principles to follow, which are correlation ratio, labor norms, frequency and duration.

Correlation ratio

The correlation ratio between departments and divisions in the enterprise will help determine the number of personnel needed for each department or division. As follows:

• The rate of increase (decrease) compared to the previous year will correspond to the increase (decrease) in revenue level. For example, if revenue increases by 40%, labor quotas increase by 20%.
• Correlation between indirect and direct position groups.
• Correlation between budget sources for direct and indirect groups, between management and employees.

Labor norms

• Norms based on volume: This norm is applied to the production and business sectors e.g. the number of products produced on average by a normal worker a day.
• Performance-based norm: Will apply to the business sector, e.g. revenue per headcount.
• Subjects served: Applicable to indirect blocks.
• Work frequency.

Frequency and duration

Frequency and duration are two important factors in calculating staffing levels. Businesses need to determine the frequency and duration of jobs to be able to determine the number of employees needed for each position.

Workforce planning process

The labor staffing process includes the following steps:

Step 1. Determine human resource needs

To be able to calculate labor quotas, businesses need to determine the unit’s future human resource needs. Enterprises need to clearly determine contents such as: Number of personnel needed for each department, division, and position; Necessary organizational structure; Human resource quality needs to be achieved, etc. To achieve this step, businesses need to collect and analyze information such as: Business plan and goals, development strategy of the unit; Objectives of each position, department; Current resources of the unit and their skills, etc.

Step 2. Analyze the current situation of human resources

Next, businesses need to analyze the current human resources situation. This activity aims to clearly identify the advantages and disadvantages of the current resources in the unit. During the analysis process, businesses need to consider factors related to both processes and systems.

Step 3. Decide to increase or reduce personnel

Based on the analysis of needs and current resource status, businesses will decide to increase or decrease human resources for each position, department. If current resources do not meet the needs of the business, it will be necessary to increase human resources. On the contrary, businesses will cut staff if current resources are redundant.

Step 4. Plan implementation

Next, the enterprise will plan to implement appropriate labor scheduling. If staffing is effective, it will help save time and optimize human resources. This plan will need basic information such as: Arrange organizational structure and number of personnel in departments and divisions; Reasonable personnel recruitment plan and schedule; Plan for reskilling and upskilling the workforce; Plan for promotion and transfer of personnel within the unit/organization; Cut ineffective personnel who do not create value for the business.

Step 5. Evaluation

This is the last step and has a very important role because it helps businesses know the errors between goals and actual plans. On that basis, analyze the causes and learn lessons for future labor redeployments. To evaluate, businesses need to synthesize information about the results of plan implementation, compare it with the set goals, and at the same time come up with some solutions to improve the effectiveness of plan implementation.

Mistakes to avoid when determining workforce planning

Human resource scheduling is one of the important issues of businesses, affecting operational efficiency, productivity, costs and competitiveness. However, not all businesses can assign human resources scientifically and accurately. Here are mistakes to avoid in workforce planning:

Workforce planning is based on experience or personal feelings

This is a common mistake of many businesses, especially small and medium-sized enterprises. They often assign personnel based on the manager’s experience or emotions, without objective analysis of business plan, job needs, labor productivity and the labor market. This can lead to staffing being too high or too low, causing waste or shortage of human resources.

Workforce planning is based on the number of existing employees

This is the mistake of many businesses when they think that the number of available staff is the number of employees needed for business operations. However, the number of available employees may not reflect actual job needs, but is only a result of previous hiring decisions. Businesses need to review the criteria of employee quality, performance and efficiency to determine staffing in accordance with business goals.

Workforce planning based on budget

This is a common mistake of businesses with limited budgets, when they set budget as the main criterion for staffing. They often cut the number of employees to save costs, not caring about the impact this has on product quality, service and customer satisfaction. This can cause work overload, reduced creativity and innovation, lost business opportunities and loss of brand reputation.

Workforce planning is not flexible

This is the mistake of businesses that follow a fixed staffing model that does not change over time and circumstances. They do not review the number and functions of employees according to changes in the market, technology, customers and competitors. They also do not have contingency plans to respond to unexpected situations, such as epidemics, accidents, natural disasters or economic crises. This can cause businesses to lose flexibility, adaptability and competitiveness.

To scientifically and accurately workforce planning, businesses need a complete process. Businesses also need to have an effective human resources management system to monitor, evaluate and adjust the number and quality of employees according to business goals. At the same time, businesses need to be flexible and ready to change when necessary, to respond to challenges and opportunities in the business environment.

Crafting an effective manpower plan is crucial for optimizing your business’s human resources, but navigating the process can be tricky. That’s where Kounselly comes in. Our platform connects you with a network of seasoned Human Resource experts who can guide you through every step, from identifying your staffing needs to developing a flexible and adaptable plan that aligns with your strategic goals. Find your expert here!