Manpower planning

Manpower planning is the process of estimating the optimum number of people required for completing
a project, task or a goal within time. Manpower planning includes parameters like number of personnel,
different types of skills, time period etc. It consists of putting right number of people, right kind of
people at the right place, right time, doing the right things for which they are suited for the
achievement of goals of the organization. It is a never ending continuous process to make sure that the
business has the optimized resources available when required taking into consideration the upcoming
future projects and also the replacement of the outgoing employees. It is also called as Human Resource
Planning.

Main objectives of manpower planning are enumerated as under:

The main objectives of HRP are:

(i) Proper assessment of human resources needs in future.

(ii) Anticipation of deficient or surplus manpower and taking the corrective action.

(iii) To create a highly talented workforce in the organization.

(iv) To protect the weaker sections of the society.

(v) To manage the challenges in the organization due to modernization, restructuring and
reengineering.

(vi) To facilitate the realization of the organization’s objectives by providing right number and
types of personnel.

(vii) To reduce the costs associated with personnel by proper planning.

(viii) To determine the future skill requirements of the organization.

(ix) To plan careers for individual employee.

(x) Providing a better view of HR dimensions to top management.

(xi) Determining the training and development needs of employees.

Human Resource Planning has both macro and micro level issues. Macro level includes demographic
changes, legal central, policies and markets technology etc. Micro level includes organizational
restructuring, skill, strategic objective, trade unions etc. Macro is uncontrollable factor and Micro
level is controllable factor.
Micro Level HRP:-

1. Macro level HRP drives Micro level HRP

2. Which develops and implements the tactics needed to help the organization achieve its
strategic objectives
3. Ensure that the business has the appropriate number of knowledge, skills and abilities in
the proper areas and departments.

Micro level Basics:-

1. Demand Forecasting :- Uses historical and current operations data to identify future
needs and Analyzing the current workforce to identify potential shortage and surpluses in
various job categories in future
2. Manpower supply Analysis :- Scanning the current labor market to determine the
workforce available and analyzing any gaps between the kind of workforce needed with
what is available.
3. Manpower Planning:- Set priorities and develop plans for employee recruitment,
retention and development and workforce reductions.

Macro Level HRP

1. HRP Focuses on aligning human resources administration with the organization’s mission
and overall strategic plan.
2. Examines employee-management policies and procedures and their effect on HRM.

HRP has always a linkage with all the HR function starting from the recruitment to Retirement.

Factors influencing HRP

(HRP) is influenced by several considerations. The more important of them are:

(i) Type and strategy of organization :- The type of organization is an important consideration
because it determines the production processes involved, number and type of staff needed, and
the supervisory and managerial personnel required.(e.g. Manufacture or service, etc.)
(ii) Organizational growth cycles and planning :- Need for planning is felt when the organization
enters into the different stage like growth stage, Initiation stage, decline stage etc.
(iii) Environmental uncertainties :- Political, social and economic changes affect all organizations.
Balancing mechanisms are built into the HRM programme through succession planning,
promotion channels, layoffs, flexi time, job sharing, retirement, VRS and other personnel related
arrangements.

(iv) Time horizons :- A plan cannot be for too long on a time horizon as the operating environment
itself may undergo changes. On one hand, there are short-term plans spanning six months to
 one year. On the other hand, there are long-term plans -which spread over three to twenty
years. The exact time span, however, depends on the degree of uncertainty prevailing in an
organization’s environment.
(v) Type and quality of forecasting information :- The quality and accuracy of information depend
upon the clarity with which the organizational decision makers have defined their strategy,
organizational structure, budgets, production schedules and so forth.
(vi) Labor market :- Labor market comprises people with skills and abilities that can be
tapped as and when the need arises. When one talks about labor supply, the following
deserve due consideration:

• The size, age, sex and educational composition of the population

• The demand for goods and services in the country

• The nature of production technology

• Employability of the people

What is Human Resource Forecasting

Human resources (HR) forecasting involves projecting labor needs and the effects they’ll have on a
business. An HR department forecasts both short- and long-term staffing needs based on projected sales,
office growth, attrition and other factors that affect a company’s need for labor. In addition to forecasting
the number and type of workers you’ll need, HR planning includes analyzing the various costs and
administrative work that go along with adding workers or downsizing

The Need of HR Forecasting

1. Human resource planning based on a calculative forecasting can improve operational
efficiency and increase the profitability of a business.
2. A strategic HR policy can eliminate confusion, streamline the resourcing and save
precious time for a business.
3. Forecasting as an integral part of HR planning fulfills organizational objectives by
ensuring the business is neither overstaffed nor understaffed.
4. The key aspects of the Forecasting are answer to “How Many”, “When” and for “What
skills
5. HR department is prepared for changing requirements
6. Organization is not caught off-guard in the shifting workforce market
7. Adapt faster to the introduction of automation or advanced technologies
8. Gain competitive advantage through rapid rollout of new products or into new markets
9. Better anticipate the need for critical skills during growth phases
10. Be proactive by honing the skills of current workforce in order to move into new areas
The Steps in HR Forecasting
1. Assess your current human resource capacity
2. Scrutinize the Current Job Market
3. Evaluate Organizational Needs
4. Anticipate Employee Turnover
5. Forecast future HR requirements
6. Identify HR gap
7. Estimate Future HR Needs
8. Integrate the plan with your organization’s overall

Demand Forecasting

Forecasting human resource demand is the process of estimating the future human resource
requirement of right quality and right number.

Analysis of employment trends; replacement needs of employees due to death, resignations,

retirement termination; productivity of employees; growth and expansion of organisation;
absenteeism and labour turnover are the relevant factors for human resourced forecasting.
Demand forecasting is affected by a number of external and internal factors.

Factors Affecting HR Demand Forecasting

Human Resosurce Demand Forecasting depends on several factors, some of which are given
below.
• Employment trends
• Replacement needs
• Productivity
• Absenteeism and
• Expansion and growth
Thee are number of techniques of estimating/forecasting human resources demand : A
Managerial judgment
B. Work study Technique
C. Ratio Trend Analysis
D. Econometric Models
E. Delphi Model
F. Other Techniques
(A)Managerial Judgment :-

This technique is very common technique of demand forecasting. This approach is applied by
small as well as large scale organisations. This technique involves two types of approaches i.e.
“Bottom-up-approach” and “Top-down approach”. Under the “Bottom-up approach, line
managers send their departmental requirement of human resources to top management. Top
management ultimately forecast the human resource requirement for the overall organization on
the basis of proposals of departmental heads. Under the “Top-down approach”, top management
forecasts the human resource requirement for the entire organization and various departments.
This information is supplied to various departmental heads for their review and approaval.
However, a combination of both the approaches i.e. “Participative Approach” should be applied
for demand forecasting. Under this approach, top management and departmental heads meet and
decide about the future human resource requirement. So, demand of human resources can be
forecasted with unanimity under this approach.

(B)Work-Study Technique :
This technique is also known as “work-load analysis”. This technique is suitable where the
estimated work-load is easily measurable. Under this method, estimated total production and
activities for a specific future period are predicted. This information is translated into number of
man-hours required to produce per units taking into consideration the capability of the
workforce. Past-experience of the management can help in translating the work-loads into
number of man-hours required. Thus, demand of human resources is forecasted on the basis of
estimated total production and contribution of each employee in producing each unit items.
Example :-
Let us assume that the estimated production of an organization is 3,00,000 units. The standard
man-hours required to produce each unit are 2 hours. The past experiences show that the work
ability of each employee in man-hours is 1500 hours per annum. The work-load and demand of
human resources can be calculated as under

i. Estimated total annual production = 3,00,000 units ii.

Standard man-hours needed to produce each unit = 2 hrs
iii. Estimated man-hours needed to meet estimated annual production = 6,00,000 hrs iv.
Work ability/contribution per employee in terms of man-hour = 1500 unit v.
Estimated no. of workers needed (iii/iv) = 6,00,000/1500 = 400 units

The example clearly shows that 400 workers are needed for the year. Further, absenteeism rate,
rate of labor turnover, resignations, deaths, machine break-down, strikes, power-failure etc.
should also be taken into consideration while estimating future demand of human
resources/manpower.

( C ) Ratio Trend Analysis :

Demand for manpower/ human resources is also estimated on the basis of ratio of production
level and number of workers available. This ratio will be used to estimate demand of human
resources.
Example :-
Estimated production for next year = 1,40,000 units
Estimated no. of workers needed(on the basis of ratio-trend of 1:200) will be = 700

(D) Econometrics Models :

These models are based on mathematical and statistical techniques for estimating future demand.
Under these models relationship is established between the dependent variable to be
predicted(i.e. manpower/human resources) and the independent variables(i.e. sales, total
production, work-load etc.). Using these models, estimated demand of human resources can be
predicted.

( E ) Delphi Technique :

It is also a very important technique used for estimating demand of human resources. This
technique takes into consideration human resources requirements given by a group of experts i.e.
managers. The human resource experts collect the manpower needs, summarizes the various
responses and prepare a report. This process is continued until all experts agree on estimated
human resources requirement.

( F ) Other Techniques:-
The other techniques of Human Resources demand forecasting as specified as under.

i. Following the techniques of demand forecasting of human

resources used by other similar organizations.
ii. Organization-cum-succession-charts iii. Estimation based on
techniques of production iv. Estimates based on historical
records
v. Statistical techniques e.g. co-relation and regression analysis.
Supply Forecasting
Human Resource supply forecasting is the process of estimating availability of human resource
followed after demand for testing of human resource. For forecasting supply of human resource
we need to consider internal and external supply. Internal supply of human resource available by
way of transfers, promotions, retired employees & recall of laid-off employees, etc. Source of
external supply of human resource is availability of labour force in the market and new
recruitment.

external supply of human resource depends on some factors mentioned below.

• Supply and demand of jobs.

• literacy rate of nation.
• rate of population
• industry and expected growth rate and levels technological development.
• compensation system based on education, experience, skill and age.

The most important techniques for forecasting of human resource supply are succession analysis
and Markov Analysis.

Succession Analysis

Once a company has forcast the demand for labor, it needs an indication of the firm’s labor
supply. Determining the internal labor supply calls for a detailed analysis of how many people
are currently in various job categories or have specific skills within the organization. The
planner then modifies this analysis to reflect changes expected in the near future as a result of
reirements, promotions, transfers, voluntary turnover and terminations.

Demand forecasting helps in determining the number and type of personnel/human resources
required in future. The next step in human resource planning is forecasting supply of human
resources. The purpose of supply forecasting is to determine the size and quality of present and
potential human resources available from within and outside the organization to meet the future
demand of human resources. Supply forecast is the estimate of the number and kind of potential
personnel that coud be available to the organization.

The above figure illustrates that internal supply forecasting can be estimated based on the
following:

(a) Current Staffing Level

(b) Projected Outflows This Year
(c) Projected Inflows This Year

(d) Forecasting Accuracy forecasting is always a means to an end, not the end itself. We need to
keep in mind that a forecast is relevant only in its capacity of enabling us to achieve other goals,
Although forecasting is an important part of any planning activity, it still represents only one
cogwheel in the planning machinery, meaning that there are other factors that may have a significant
impact on the outcome. Oftentimes the importance of accurate forecasting is truly crucial, but from
time to time other factors are more important to attaining the desired results. However, to get truly
valuable insights from measuring forecast accuracy you need to understand:

The role of demand forecasting in attaining business results.

What factors affect the attainable forecast accuracy.

How to assess forecast quality

How the main forecast accuracy metrics work.

How to monitor forecast accuracy.

Advantages of Manpower Planning

Without proper manpower planning no enterprise can achieve its objectives fully and entirely.
Sometimes, even its very existence may be handicapped. Hence, it is needless to stress its
importance. However, the following benefits are worth mentioning.

1. The required number of staff shall be recruited at each level in the hierarchy.

2. Staffing requirements can be better balanced and movement of staff can be made easier by
manpower planning.

3. Areas of high labour turnover are highlighted in manpower planning.

4. Implications of changes in recruitment, promotion and succession plans are foreseeable.

5. Improvement of Labour Productivity

6. Recruitment of Qualified Human Resources

7. Adjusting with the Rapid Technological Change

8. Reducing Labour Turnover

9. Control over Recruitment and Training Cost

10. Mobility of Labour

11. It cans Facilitate Expansion Programmes:

12. To Treat the Manpower like Real Corporate Assets

Limitations of Manpower Planning

Human resources planning is not free from defects. In fact, it is a double edged weapon. If used
properly, it will lead to maximum utilization of human resources. If used faulty, manpower
planning will lead to disruption in the flow of work, lower production, less job satisfaction, etc.
Besides, it also has certain limitations.

The following are some of the limitations of manpower planning

1. Detailed records are needed plus expensive clerical staff.

2. Problems of forecasting changes, especially in technological and Government policy areas.

3. Manpower planning can be uncertain even for at few years ahead. Particularly, in a dynamic
business situation it is really difficult to foresee the future with maximum accuracy.

In spite of these limitations, proper manpower planning is a condition precedent to perform

staffing function properly and successfully.

Strategic staffing definition

Strategic staffing refers to a strategy of hiring smaller core numbers of permanent employees and
using temporary employees for other, more specialized position. Lack of staff in certain job
categories can lead to a decreased performance on the company level so in order to avoid these
kinds of situations HR directors and managers need to plan ahead to meet future staffing need. It
is a process which defines and addresses the staffing implications of strategic and operational
plans.

Advantages of strategic staffing

The use of strategic staffing allows companies:

- To improve staff utilization

- To address critical HR concerns in a systematized and integrated way

- To recruit, develop and place the talent required to meet future company needs

Here are five steps for creating a staffing plan that will assist your organization to keep up
with its potential and ambitions.

1. Determine Your Goals. ...

2. Identify the Factors Impacting Personnel Availability. ...
3. Determine the Organization's Functional Needs. ...
4. Conduct Gap Analysis. ...
5. Create the Plan.

Job Analysis and Human Resource Planning:-

A Job can be described as a group of tasks which assigned to the individual employees for
ensuring achievement of the organizational goals. When this job is analyzed in terms of
determination of the skills, duties and knowledge required for completion of tasks, it is regarded
a Job Analysis. In the words of Geisler(2006), the entire process of HRP essentially involve four
crucial aspects in it.

▪ Forecasting of Manpower requirements

▪ Formulating Policies
▪ Implementing policies effectively and

▪ Controlling or monitoring the policies for ensuring that the right kind of people in right
numbers are selected for the right position and in right time

A sound HRP process in an organization must be strategically aligned with overall corporate
strategy and essentially depends on the availability of a robust HRIS for making accurate
projections regarding the manpower requirements and availability of information readily
regarding crucial parameters.

Job Analysis

Job Analysis involves gathering information and analysis of crucial information about a job. In
this analysis judgment are made on the data collected of a job. Job Analysis involves both Job
Description and Job Specification, which includes an assessment of the nature of the job as well
as the knowledge skills, and attitude of the jobholder. In other words, Job Description provides
details regarding the content of the job in a written format and Job Specification is written
record of the qualities and qualifications which a Jobholder should be having for handling a job.

The job analysis is useful in developing selection, training, and performance evaluation. Job
analysis is the process of studying and collecting information about the responsibilities and
operations of a given job. Specifically, job analysis involves the steps: ▪ Analyzing the
Job interrelationship with the organizational strategies and vision.
▪ Determining the Uses of Job Analysis like Recruitment & Selection, Compensation,
Training & Development, etc.
▪ Identification of Job which would be analyzed
▪ Collection of Data for Job Analysis through observation, Interviews and Questionnaire
Administration.
▪ Preparing the Job Description which is essentially a written account of the job.
▪ Preparing the Job Specifications which should essentially provide details regarding the
specific skills, qualities and qualifications which a job holder should possess.

▪ Reviewing and updating the information ideally in every three years and the
interrelationship collecting job information.

Problems in HRP
1. People perceive that people are available in abundance in our labour surplus economy.
Then, why to spend time and money in forecasting human resources? Surprisingly, this
perception about human resource planning is also held by the top management.

2. Another problem in human resource planning is that the demand for and supply of human
resources is not cent percent accurate. Experience suggests that longer the time horizon for
forecasting human resource requirements, greater is the possibility of inaccuracy in estimates of
human resource needs.

3. Various types of uncertainties like labour turnover, absenteeism, seasonal employment,

market fluctuations and changes in technology render human resource planning ineffective. The
reason being these uncertainties, make human resource forecast mere a guess far from reality.

4. Sometimes human resource planning suffers from a conflict between quantitative and
qualitative approaches used for it. Some people view human resource planning as a mere
numbers game to track the flow of people across the departments and in and out of the
organisation. Conversely, others take a qualitative approach focusing on the quality of human
resources like career planning development, skill, morale, etc.

5. Generally, human resource personnel are perceived as experts in handling personnel

matters. But, they are not experts more than often. Hence, human resource requirements
estimated by such people are not realistic ones. The organisational plans based on such estimates
are endangered to be flopped.

6. As human resource planning is based on data relating to human resources, the same is not
maintained in a proper manner in some of the industrial organisations. Then, in the absence of
reliable data, it becomes difficult to develop effective human resource plans.

Guidelines for effective HRP

If you’re an entrepreneur, you will find it essential to have an effective Human Resources (HR) business
plan. You may have already discovered the value of a good strategic vision and overall business plan, but
it’s every bit as important to ensure your HR plan is effective to secure the success of your business.

1. Identify Your Employees’ Abilities

Before you start thinking about what your future hiring strategies will be, you’ll want to assess
your current workforce’s skills and abilities. You’ll probably already have files with your
employees’ resumes, including their education history and the projects they’ve worked on for
you.

2. Have a Succession Plan

You’ll want to be ready for this when it happens by having a succession plan already in place. It
will be up to you whether you want to include your employees in the creation of this succession
plan. Either way, be aware of their career goals and what their plans are for the future, and don’t
hesitate to inform them when changes are taking place.

3. Have a Development Plan for Your Employees

From there, develop a plan for the employees to go about acquiring the skills they need and begin
applying them towards the greater good of the business. Studies have shown that the main reason
employees stay with the company they work for is because they feel challenged by the work they
are being given.

4. Conduct a Gap Analysis

You’ll want to analyze the job descriptions you use when hiring; Make sure your employee
handbook is up to date as well;Your training policies may also need to be updated. Changes may
also have taken place in the requirements regarding health benefits and sick leave so keep abreast
of current laws
Current Trends in HRP
The universe of work is quickly evolving. As a part of a company, Human resource
management must be set up to in order to manage impacts of changing universe of manpower.

For the HR individuals, it implies understanding the consequences of recent human resource
planning and management changes and trends:

• Globalization
• Changing ability requirements
• Corporate cutting back
• Ceaseless change activities
• Re-building
• Sudden work power and, employee involvement.

Globalization and its impacts

Business today doesn’t have national limits, it stretches far and wide. The ascent of multinational
companies has encouraged new requirements on human resource managers.

The HR office needs to guarantee that the proper blend of workers regarding information,
abilities and social versatility is accessible to handle worldwide assignments.

Keeping in mind this objective, the companies must prepare its employees to meet the difficulties
of globalization.

Human resource management should likewise create systems that will help multicultural people
cooperate. The main challenge is to avoid the signs of a worker struggling with increment.

HRM is also required to prepare the administration to be more adaptable in its practices.

Since tomorrow’s manpower will come in various hues, nationalities etc., managers will be
required to change their way of life.

This will require managers to be prepared to gain comparisons in responsibilities and to

acknowledge and even praise these distinctions.

In this case, a development plan to get their performance back on track is the best
solution. Salary shouldn’t increase for these people as you don’t necessarily want to
retain them.
To create such a four-by-four, you need to assess people on their performance and potential. The
performance-potential matrix is thus a great strategic workforce planning tool, not only to assess
talent but also to manage it.

HR Dashboarding
A third workforce planning tool that a lot of companies are actively investing in, is the HR
dashboard. The HR dashboard is a very effective instrument to show current workforce
capabilities.

There’s a lot to tell about the HR dashboard. On a conceptual level, the dashboard is filled with
information from different source systems, like a payroll system, applicant tracking system, and
other Human Resources Information Systems. Based on this data, metrics are calculated and
displayed.

The model below shows this process. Systems are extracted, data is transferred and loaded into a
data lake or data warehouse. Reporting software uses this data to report on it.

Compensation & benefit analysis

We haven’t written a lot about compensation and benefit analysis yet. However, it does provide a
number of great opportunities for data analysis. For two reasons.

First of all, compensation and benefit data is highly structured and accurate. Secondly, it is
directly related to a financial outcome and thus bottom line performance.

The simplest analysis has two elements:

 • Set an internal pay benchmark and group people in (severly) overpaid and (severly)
underpaid categories
• Retrieve performance data and categorize people in overperforming or underperforming

You want your overperforming people to be overpaid and your underperforming people to be
underpaid. If there’s a difference in the two you either run the risk of losing top performers
because of underpay or not losing bad performers because of overpay. The latter is referred to as
the golden cage.

This data can be enriched by labor market statistics. You can use payment benchmarks from
outside your organization to adjust for internal payment discrepancies.

You can also use job market information to control for external demand and projected demand
for certain jobs. These kind of numbers are available for any industry and can be very beneficial
in anticipating and adjusting to future workforce needs.

Scenario planning
Scenario planning is the ultimate workforce planning tool. It helps to anticipate multiple possible
futures so that you won’t be caught off-guard. In the words of futurist Peter Schwartz: “if you
haven’t thought about it, you’re unlikely to see it in time”.

In scenario planning, you imagine different potential futures that have a severe impact on your
business and that you will be unlikely to see coming. These scenarios can involve technological
innovation, new legislation, natural disasters, changes in attitudes of the general public, etc.

By thinking about these scenarios, analyzing them and describing how they will make an impact
on day to day business, you can develop a strategy for unlikely but impactful events.

One of the early pioneers in this approach was Shell. According to Schwartz´s book the art of the
long view, Shell used scenario planning to develop strategies for dealing with the 1973 energy
crisis, the 1979 oil price shock, the fall of the Soviet Union, and the increasing pressure on
companies to address environmental issues.

If you think about the figure that we started with, scenario planning is really about imagining the
future – or imagining multiple possible futures. For a full overview of how to do a scenario
planning exercise, check appendix A in this document. I included a summarized version below.

How does scenario planning work as a workforce planning tool?

• First of all, you want to analyze the focal issue of concern for the workforce. This is the
issue that the planning exercise centers on.
• Secondly, you want to identify driving forces of change. These can be external and
internal. Examples are the specific demographic driver, environmental drivers,
sociopolitical drivers, market drivers, and so on. The challenge is to make these drivers as
 specific as possible. For example, don’t use ‘global warming’ as a driver but define it as
the increasing of drought periods in California (or any specific region).
• Thirdly, you want to rank these specific driving forces on their importance and
uncertainty. Importance refers to the impact the driver will make on the workforce.
Uncertainty refers to the uncertainty of your estimation. This step is required to select the
most relevant and divergent conditions.
• Next, the two most uncertain and important driving forces are selected and two polar
opposites are selected. These are mapped on a 2×2 grid.
• This creates four distinctly different and impactful workforce challenges. For each of
these scenarios, a name and story are created related to how they will play out and impact
the workforce. In the final step, strategies are created to resolve these challenges.

This exercise is not something you do in half an hour. It usually takes a team at least half a day
up to a few days, depending on the level of complexity. However, it can be a very useful one!

You have now had a description of 5 essential workforce planning tools. They are essential tools
for any HR professional working in a larger organization. Most of these tools are described in
much more detail in our HR analytics course. If you want to learn more about it and also
practically apply them to real employee data

Gap Analysis

Definition: Gap Analysis can be understood as a strategic tool used for analyzing the gap
between the target and anticipated results, by assessing the extent of the task and the ways, in
which gap might be bridged. It involves making a comparison of the present performance level
of the entity or business unit with that of standard established previously.

Gap Analysis is a process of diagnosing the gap between optimized distribution and integration
of resources and the current level of allocation. In this, the firm’s strengths, weakness,
opportunities, and threats are analyzed, and possible moves are examined. Alternative strategies
are selected on the basis of:
 • Width of the gap

• Importance
• Chances of reduction

If the gap is narrow, stability strategy is the best alternative. However, when the gap is wide, and
the reason is environment opportunities, expansion strategy is appropriate, and if it is due to the
past and proposed bad performance, retrenchment strategies are the perfect option.

Types of Gap
The term ‘strategy gap’ implies the variance between actual performance and the desired one, as
mentioned in the company’s mission, objectives, and strategy for reaching them. It is a threat to
the firm’s future performance, growth, and survival, which is likely to influence the efficiency
and effectiveness of the company. There are four types of Gap:

1. Performance Gap: The difference between expected performance and the actual
performance.
2. Product/Market Gap: The gap between budgeted sales and actual sales is termed as
product/market gap.
3. Profit Gap: The variance between a targeted and actual profit of the company.
4. Manpower Gap: When there is a lag between required number and quality of workforce
and actual strength in the organization, it is known as manpower gap.
For different types of gaps, various types of strategies are opted by the firm to get over it.

Alternative Courses of Action

In case, gaps are discovered the company’s management has three alternatives:

• Redefine the objectives: If there is any difference between objectives and forecast, first and
foremost the company’s top executives need to check whether the objectives are realistic and
achievable or not. If the objectives are intentionally set at a high level, the company should
redefine them.

• Do nothing: This is the least employed action, but it can be considered.

• Change the strategy: Lastly, to bridge the gap between the company’s objectives and
forecast, the entity can go for changing strategy, if the other two alternatives are considered
and rejected.

Before making any change in the strategy, one must consider that the gap exists between the
present and proposed state of affairs. It is too wide to be noticed, and the organization is
encouraged to reduce it. The company’s management is of the opinion that something can be
done to reduce it.
Stages in Gap Analysis
1. Ascertain the present strategy: On what assumptions the existing strategy is based?
2. Predict the future environment: Is there any discrepancy in the assumption?

3. Determine the importance of gap between current and future environment: Are
changes in objectives or strategy required?

Whether it is anticipated sales, profit, capacity or overall performance, they are always based on
the past, and present figures and some amount of guess are also involved in it. So, the occurrence
of the gap is quite natural, but if the gap is large, then it is a point to ponder because it might
have an adverse affect on the company’s future.

A Business process approach to HRP.

The most reasonable approach to human resource planning begins with acquiring knowledge of
the human resources function: recruitment and selection, training and development, employee
relations, workplace safety, and compensation and benefits. Your organizational goals should
include attention to all aspects of the human resources planning process.

Legal Framework
Beginning with the basic premise of fair employment practices, your human resources planning
strategy starts with the legal framework. Companies that seek guidance from federal, state and
local regulations concerning employee and employer rights are on the right track. Establishing
relationships with agency staff from the U.S. Equal Employment Opportunity Commission, U.S.
Department of Labor, the National Labor Relations Board and U.S. Citizen and Immigration
Services will work to your advantage. These are the primary federal agencies that enforce
employment actions. When you create an employee handbook, your understanding of, and
commitment to, fair employment practices must be expressed in writing.

Organizational Mission and Goals

This approach to human resources planning mirrors the section in your business plan devoted to
explaining why your company exists and what value it presents to the community. Human
resources planning is also based on your organization's mission statement, goals and objectives
because your workforce will be in alignment with the company values. "Entrepreneur"
contributors Dennis Daley and colleagues state: "Combining human resource practices with a
focus on the achievement of organizational goals and objectives can have a substantial effect on
the ultimate success of the organization." Establishing business ethics and guidelines concerning
the organization as a whole is extremely important, and thus, an integral part of your human
resources planning.
Policy Development
Building upon your organization's legal framework and organizational mission and values
statement, you are ready to approach the policy development. This is a logical approach because
your workplace guidelines and policies are based upon the two previous steps. You are
developing policies for the workforce; however, you also must develop organization-wide
policies such as customer service standards, financial controls, marketing operations, corporate
governance and IT resources. This is one of the final approaches to human resources planning
because you have now completed the legalities of staffing your organization and forming the
values by which your workforce will operate.