Chapter # 2

Manpower planning
Professor Dr md abu sina
 Definition
Manpower planning (also known as
workforce planning) is the continuous,
systematic process of aligning an
organization's human resources with
its current and future business goals.
It ensures a company has the right
number of people, with the right skills,
in the right roles, at the right cost and
time.
 Human resource planning (HRP)
Human Resource Planning (HRP) definitions from different
authors emphasize ensuring the right number and type of
people are in the right place at the right time to meet
organizational goals, focusing on forecasting, acquisition,
utilization, and development of talent for both current and future
needs, preventing shortages or surpluses.
Here are some definitions provided by different authors:
Edwin B. Flippo: HRP is ensuring the organization has the
correct number and type of people in the right places at the right
time for maximum economic utility.
Leon C. Megginson: it is an integrated approach to personnel
planning to ensure a sufficient supply of motivated individuals for
organizational and individual goals.
Stephen P. Robbins and Mary Coulter: it is the process
managers use to ensure the right number and kind of capable
people are in the right places at the right times.
Bruce P. Colemane defines manpower planning as
determining requirements and the means to meet
them to execute the organizational plan.
Wayne F. Cascio defines it broadly as anticipating
future demands and meeting human resource
requirements.
K. Aswathappa simplifies it as forecasting future
demand and supply of the right people.
Stainer views it as a strategy for acquiring, utilizing,
improving, and preserving human resources.
Dale S. Beach defines HRP as ensuring an
adequate number of qualified people are available
at the proper times to meet enterprise and individual
needs.
James J. Lynch defines it as integrating manpower
policies and practices to achieve the right people in
the right jobs at the right time.
 objectives of human resource
planning
The primary objective of human resource planning
is to guarantee that the individuals who work for
your organization are well-trained and capable of
managing shifting career challenges. Below are
some other objectives of HR planning:
a) Ensure that each person is committed to work.
b) Ensure that all current human resources are
treated equally and fairly.
c) Ensure that employees receive the appreciation
they deserve.
d) Creating a fair and pleasant working
environment.
e) Keeping a strong and healthy communication
among the human resources.
 Steps in the Human Resource
Planning (HRP) Process
There are four general, broad steps involved in the HRP
process. Each step needs to be taken in sequence in order to
arrive at the end goal, which is to develop a strategy that
enables the company to successfully find and retain enough
qualified employees to meet its needs.
1. Analyzing Labor Supply: First step of HRP is to Identify
the current workforce and evaluate their skills, qualifications,
and performance.
2. Forecasting Labor Demand: 2nd step is to predict future
workforce needs considering promotions, retirements, or new
market conditions.
3. Balancing Labour Demand with Supply: 3rd Step is to
conduct a gap analysis to address your future workforce
needs.
4. Developing and Implementing a Plan: Last step is to
create and execute a strategic plan that integrates with your
company's goals.
 Demand and Supply Forecasting
Methods of Demand Forecasting
There are three major methods of demand forecasting. They are
as follows:
1) Executive Judgment: Executive or Managerial Judgment
method is the most suitable for smaller enterprises because they
do not afford to have work study technique. Under this method
the executives sit together and determine the future manpower
requirements of the enterprise and submit the proposal to the top
management for approval. This approach is known as ‘bottom up’
approach.
2) Work Load Forecasting: It is also known as work load
analysis. Under this method the stock of workload and the
continuity of operations are determined. Accordingly the labour
requirement is determined. The workload becomes the base for
workforce analysis for the forthcoming years. Here due
consideration is given to absenteeism and labour turnover. This
method is also known as work study technique. Here working
capacity of each employee is calculated in terms of man-hours.
Man-hours required for each unit is calculated and then number
of required employees is calculated.
The example is given below:
a) Planned annual production = 2, 00,000 units
b) Standard man-hours required for each unit = 2 Hours
c) Planned man-hour needed for the year (a x b) = 4, 00,000 hrs.
d) Planned annual contribution of an employee = 2000 hrs.
e) No. of employees required (c/d) = 4, 00,000/2000 = 200
This method is useful for long term forecasting.
3) Statistical Techniques: Long range demand forecasting for
human resources is more responsive to statistical and
mathematical techniques. With the help of computers any data is
rapidly analyzed.
The following are the methods of forecasting used under this
category:
a) Ratio Trends Analysis: Under this method the ratios are
calculated for the past data related to number of employees of
each category i.e. production, sales and marketing levels, work
load levels. Future production and sales levels, work load,
activity levels are estimated with an allowance of changes in
organization, methods and jobs. The future ratios are estimated.
Then future human resources requirement is calculated on the
basis of established ratios. This method is easy to understand.
Value depends upon accuracy of data.
b) Econometric Models: Econometric models are built up on
the basis of analysis of past statistical data establishing the
relationship between variables in a mathematical formula. The
variables are those factors such as production, sales, finance
and other activities affecting human resource requirement.
Econometric model is used to forecast human resource
requirements based on various variables.
c) Bureks-Smith Model: Elmer Bureks and Robert Smith have
developed a mathematical model for human resource forecasting
based on some key variables that affects overall requirement for
human resources of the organisation. They have given an
equation.
En = (Lagg + G) 1/x/ y
Where,
En = Estimated level of demand for employees
Lagg = Turnover or overall current business activity
G = Total growth in business activity anticipated thought period
‘n’ in term of rupees
x = Average productivity improvement from today thought
planning period.
y = Conversion figure relating today’s overall activity to required
employees.
This method is used when the values of G, x and y are accurate.
To obtain the values of G, x and y different statistical techniques
are used.
d) Regression Analysis: Regression analysis is used to
forecast demand for human resources at some point of time in
future by using factors such as sales, production services
provided etc. This method is used when independent and
dependent variables are functionally related to each other.
Nowadays computers are used to solve regression equations for
demand forecasting.
Supply Forecasting
Supply forecasting means to make an estimation of supply of
human resources taking into consideration the analysis of current
human resources inventory and future availability.
Existing Inventory: The first step in supply forecasting is to take
a stock of existing HR inventory as follows.
a) Head Count: Count of the total number of people available
department-wise, sex- wise, designation-wise, skill-wise, pay roll-
wise etc.
b) Job Family Inventory: It consists to number and category
of employees of each job family i.e. the jobs related to same
category like office staff, sales and marketing staff, production
staff, maintenance and industrial engineers, quality control
engineers etc.
c) Age Inventory: It consists of age-wise number and
category of employees. This gives us age composition of
human resources. Dynamism, creative abilities innovativeness
is present in young employees while making of proper
judgment and display of maturity is shown by elderly
employees.
d) Inventory of skill, experience, values and capabilities:
Organisation should take a stock of present inventory of skill,
employees with number of years of experiences (10 yrs, 15-
yrs, 20 yrs and more etc.), values and capabilities.
e) Inventory of Qualifications and Training: This consists of
educational qualifications of the employees academic and
technical and special qualifications if any and the training
received by the employees.
f) Inventory of Salary grades: This includes pay and
allowance-wise and total emoluments-wise stock taking.
g) Sex wise Inventory: Inventory of male and female employees
of the organisation.
h) Local and Non-Local-wise Inventory: It includes the stock of
local employees and the employees belonging to other areas
such as different districts of Bangladesh.
(i) Inventory of Past Performance and Future Potentialities:
There are several human capacities or potentials required for
performing jobs at the workplace. Requirement of these along
experience need to be taken into consideration while taking stock
of human resource inventory.
Labour Wastage
Labour wastage should be taken into account while making
future forecast and find out the reasons of people leaving the
organisation. Action can be taken to arrest the labour wastage
and replacement of uncontrollable losses. HR manager must
know how to make wastage analysis. For measuring permanent
total loss due to labour the following labour turnover formula is
used.
Labour Turnover Rate = Number of Employees left specified
period (Say one year)/ Average Number of Employees during the
same period x 100
HR Managers have to calculate the rate of labour turnover,
conduct exit interviews etc. This helps them forecast, the rate of
potential loss, causes of loss etc. The steps can be taken to
reduce loss. HR Manager can calculate labour stability index by
using the formula given below.
Labour Stability Index = Number of Employees with one year’s
service or more / Number of Employees one year ago x 100
By knowing all these labour instability can be arrested and
labour turnover can be minimised.
The potential losses can be classified as permanent total loss,
permanent partial loss, Temporary total loss and Temporary
partial loss. Let us analyse these losses.
a) Permanent Total Loss: Permanent total loss is due to
deaths, voluntary quits retirement, dismissals, retrenchment, and
promotions out, demotions and transfers out. This can be filled
in by new recruits, promotions in and transfers in.
b) Permanent Partial Loss: Permanent partial loss is due to
loss of some skills, potentials and capabilities because of ill
health or accidents. To get rid of this loss organisation can
acquire new skill, knowledge, values, and aptitudes among the
existing employees by providing adequate and necessary
training.
c) Temporary Total Loss: Temporary total loss is due to loss of
aptitudes, values, change in outlook and attitude of existing
employees towards their jobs, department and organisation.
Absenteeism is also a reason for this. This can be prevented by
taking steps to minimize absenteeism to forecast loss of human
resources due to it. Attitude of the employees towards
organisation can be improved by knowing the causes of change
and making efforts to remove those causes.
d) Temporary Partial Loss: This loss is due to consultancy or
advice offered by the employees of the organisation to others.
This loss of labour hours has to be there because many
organisations encourage this practice as there is revenue to the
organisations also.
Potential Additions: Potentials added to the present inventory
of human resources minimize the impact of potential losses.
Potential additions are of following types:
1) Permanent total: Permanent total additions are due to new
recruitment, promotions granted to juniors, transfer effected from
one department to another.
2) Permanent Partial Additions: These consist of acquisitions
of new skills, knowledge, by the present employees. This will
increase the stock of human resources in the organisation.
3) Temporary Total Additions: These consist of deputation of
employees from other organisations. This will temporarily make
additions to the stock of human resources.
4) Temporary Partial Additions: These come to the
organisation through the consultancy and advice by the
employees of other organisations.
Sources of Supply
Estimation of supply of human resources depends upon internal
and external sources.
Internal Factors: Internal source of supply of human resources
include the output from established training programme for
employees and management development programmes for
executives and the existing reservoirs of skills, potentials,
creative abilities of the organisation.
External Factors: External factors can be grouped into local
and national factors.
a) Local Factors: Local factors include the following:
1) Population densities within the reach of enterprise.
2) Current and future wage and salary structure from other
employers.
3) Local unemployment level.
4) Availability of employees on part time, temporary
and casual basis.
5) The output from local educational institutions and
training institutions managed by government and
private establishments.
6) Local transport and communication facilities.
7) Availability of residential facilities.
8) Traditional pattern of employment locally and
availability of human resources with requisite
qualifications and skills.
9) The pattern of migration and immigration.
10) The attraction of the area as a better place to
reside.
11) The attraction of a company as a better workplace
and company as a good paymaster.
12) The residential facilities, educational health and
transport facilities.
13) The regulations of local government in respect of
reservation of backward and minorities communities.
b) National Factors: National factors include the
following:
1) Trends in growth of working population of the country.
2) National demands for certain categories of human
resources such as technical and management professionals,
computer professionals, medical practitioners, technicians,
secretaries, craftsmen, graduates etc.
3) The output from universities, technical and professional
institutions.
4) Impact of changes in educational patterns.
5) Cultural patterns, social norms and customs.
6) Impact of government training schemes.
7) Impact of government policies in respect of employment
regulations.
8) Migration and immigration patterns.
9) Impact of national educational facilities.
The net human resource requirement depends upon the
human resource requirement of the organization for future i.e.
demand forecasting and the total supply of human resources
available.
 Demand Forecasting Methods
Demand forecasting estimates the number and type of
employees required in the future, based on organizational
objectives and anticipated business activity.
1. Workload Analysis (Work-Study Technique): This method is
used when the workload can be easily measured and converted
into the number of man-hours required. Assume an organization
plans to produce 300,000 units next year. Each unit requires 2
standard man-hours to produce. The average employee's
annual working capacity is 1,500 hours.
Formula: Estimated Nos. of Employees Required =
𝑷𝒍𝒂𝒏𝒏𝒆𝒅 𝑨𝒏𝒏𝒖𝒂𝒍 𝑷𝒓𝒐𝒅𝒖𝒄𝒕𝒊𝒐𝒏 𝒙 𝑺𝒕𝒂𝒏𝒅𝒂𝒓𝒅 𝑴𝒂𝒏 −𝑯𝒐𝒖𝒓𝒔 𝒑𝒆𝒓 𝑼𝒏𝒊𝒕
𝑷𝒍𝒂𝒏𝒏𝒆𝒅 𝑨𝒏𝒏𝒖𝒂𝒍 𝑪𝒐𝒏𝒕𝒓𝒊𝒃𝒖𝒕𝒊𝒐𝒏 𝒑𝒆𝒓 𝑬𝒎𝒑𝒍𝒐𝒚𝒆𝒆

Mathematical Illustration:
Total Man-Hours Needed: 300,000 units × 2 hrs/unit = 600,000
hours
Employees Required:
600,000 hours / 1,500 hours/employee = 400 employees
2. Regression Analysis
This statistical technique measures the relationship between a
dependent variable (HR demand) and an independent variable
(e.g., sales, production levels) to predict future staffing needs.
Prediction Model (Simple Linear Regression):
𝑌=𝐴+𝐵𝑋
Where:
𝑌= Dependent variable (HR Demand)
𝑋= Independent variable (e.g., sales)
𝐴= Constant (Y-intercept)
𝐵= Slope of the linear relationship
Formulae to calculate A and B from historical data:
∑𝑿𝒀 − 𝑵(x̄)(ȳ)
𝐁=
∑X²−N(x̄)²
A=Ȳ−BX
(Where, 𝑋̄ and 𝑌̄ are the average X and Y values, and N is the
number of observations). By inputting the forecasted value of 𝑋
into the Y=A+BX equation, the future HR demand (𝑌) can be
calculated.
 Supply Forecasting Methods
Supply forecasting estimates the future availability of human
resources from both internal and external sources.
1. Turnover Analysis: This method forecasts internal supply
losses due to attrition, resignations, retirements, etc., by
analyzing historical labour turnover rates.
Formula:
Labour Turnover Rate =
Number of Employees who left during a period
x 100
Average Number of Employees during the same period

Mathematical Illustration:
If a company has an average of 5,000 employees during a year,
and 60 employees left during that time:
Labour Turnover Rate:
(60 / 5,000) × 100% = 1.2%
2. Markov Analysis (Transition Analysis/Flow Modelling)
This quantitative method uses a transition probability matrix to model
the internal flow of employees between job categories over time.
Mathematical Illustration:
A transition matrix shows the probability of an employee in a specific
job category moving to another category (promotion, transfer) or
exiting the organization within a forecast period.
Current Job Probability of Probability of Probability of
(Start of Year) staying in Current Promotion (to e.g., Exiting the System
Job Supervisor)
Line Worker 65% 15% 20%

If there are currently 200 Line Workers, the forecast for the next year is:
• Remaining Line Workers: 200 × 0.65 = 130 employees
• Promoted to Supervisor: 200 × 0.15 = 30 employees
• Exiting: 200 × 0.20 = 40 employees
(Total: 130 + 30 + 40 = 200 employees)
By combining demand and supply forecasts, organizations can identify future
human resource surpluses or deficiencies and plan accordingly through
recruitment, training, or downsizing strategies.
 Labour turnover
Labour turnover is the percentage of staff leaving and being
replaced within a set period (monthly, annually), indicating
employee retention and potential problems in management,
culture, or pay.
Labour turnover is a metric that refers to an organisation’s
net employee separations over a defined period of time. It is
often referred to as ‘employee turnover’ and is closely
related to employee attrition, also known as churn rate.
Employers should regard some level of employee
movement as normal. However, consistently elevated rates
of labour turnover can also point to problems within the
workplace that should be addressed. There are various
reasons why high turnover is undesirable, including:
i) High cost of hiring, onboarding and training new
employees
ii) Valuable expertise and experience may get lost
iii) Potential negative impact on overall business
performance
Labour Turnover Calculation
The labour turnover rate is calculated by dividing the
employees who left during a specific period of time, by
the average number of employees during the same
window. To get a percentage, this number is then
multiplied by 100.
In order to make these calculations, you will need the
following three figures:
i) Number of employees who left through the period
ii) Number of employees at the beginning of the period
iii) Number of employees at the end of the period
Once you have these three numbers in hand, calculate
the average number of employees in your defined
period of time:
(Number of employees at beginning of period +
number of employees at end of period)/2
Labour Turnover Calculating Formula
To produce your employee turnover rate as a percentage,
insert your numbers into this formula:
Employee turnover = (number of employee departures /
average number of employees) x 100
Sample Labour Turnover Calculation
You can calculate annual and monthly turnover using the
same formula but with different inputs.
Here is an example of a monthly turnover calculation:
i) Number of employees who left during the month = 7
ii) Number of employees at beginning of the month = 150
iii) Number of employees at the end of the month = 146
Thus, the average number of employees = (150 + 146) / 2
which is 148.
Therefore, this organisation’s employee turnover rate for
this month is (7 / 148) x 100 = 4.7%
To calculate the annual turnover rate, you will apply
annual numbers instead, i.e. the number of employees
who departed during the year, the number of employees
at the beginning of the year and end of the year.
New Hire Turnover Rate
Monitoring newly hired employees who leave
throughout their first year is another crucial
component of determining the turnover rate.
New Hire Turnover Rate = (Total New Hires/New
Employees Who Left Within a Year​)×100
If 50 new employees were hired and 10 left
within a year, the new hire turnover rate would
be:
(10 / 50​)×100 = 20%

A high new hire turnover rate often signals poor

on boarding, unrealistic job expectations, or
cultural mismatches.
 Financial Costs of Turnover
Retaking an employee is costly. Recruitment,
training, and lost output add up to make turnover
a costly problem. High-turnover companies
invest more in recruiting and training new staff
members, which influences their profitability.

For example, the annual turnover cost is

$150,000 if a company loses thirty staff
members yearly and pays $5,000 for each new
worker. By means of retention policies,
companies can save thousands in hiring costs.
 Productivity and costs
Productivity and costs refer to an economic data set
that measures future inflationary trends with two
indicators. Productivity is the indicator that measures
labour efficiency in producing goods and services in the
economy. Costs are the indicator that measures the unit
labour costs of producing each unit of output in the
economy. Together, productivity and costs monitor
inflationary trends in wages, which usually affect trends
of inflation in other areas.
Relationship Between Productivity and Cost
i) Productivity Defined: Manpower or labour
productivity measures the output generated by a worker
within a specific time frame relative to the input (cost,
time, effort, and resources).
 Manpower cost
Manpower cost in HRM is the total expense of
employing staff, extending far beyond just salaries to
include wages, benefits (health, retirement), taxes,
recruitment, training, overhead (facilities, equipment),
and even hidden costs like turnover, significantly
impacting profitability and requiring strategic
management for budgeting and efficiency. It's often
categorized into direct (production-linked) and indirect
(support) costs and crucial for workforce planning, with
total costs sometimes 1.25-1.4 times base salary.
Classification of Manpower Costs
i) Direct Costs: Wages for production workers, directly
tied to creating goods or services (e.g., factory line
workers).
ii) Indirect Costs: Support staff (HR, admin,
maintenance) not directly on the production line, but
essential for operations.
 Manpower control
Manpower control, or workforce planning,
is the strategic process of ensuring an
organization has the right people (skills,
quantity) in the right roles at the right
time to meet its goals, involving
forecasting needs, managing
recruitment/training, optimizing
performance through feedback/rewards,
and adapting to business changes for
efficiency and cost control. It balances
demand and supply of labor, prevents
surpluses/shortages, and aligns HR with
overall business strategy.
What is manpower productivity?
Manpower productivity measures the quantity of output
or work accomplished by individuals, teams, or the
entire workforce for a given input within a specific
timeframe or using a set of resources. Manpower
productivity quantifies how effectively employees or
teams convert their input (time, effort, skills) into
valuable output. Here’s how it is calculated:
Manpower Productivity = Total Output / Total Number
of Employees
To better understand the concept of manpower
productivity, let’s consider an example:
Suppose your company manufactures smartphones. In a
given month, your assembly line workers collectively
manufacture 10,000 smartphones. To calculate the
manpower productivity of your workers, you will use this
equation:
Manpower Productivity = Total Output / Total Number of
Employees
Let’s assume you employ 100 assembly line workers.
Then:
Manpower Productivity = 10,000 smartphones / 100
assembly line workers = 100 smartphones per worker
So, every worker produces 100 smartphones monthly on
average for the given resources. This measurement
tracking can help you gain valuable insights into how
efficiently your workforce operates.
Human Resource Information System
A Human Resource Information System (HRIS) uses an
employee database to support core HR processes that
are more linear and quantitative in nature, like payroll
processing or managing time and attendance. In
comparison, HRMS refers to a more over-arching
software solution that contains an HRIS, but also
incorporates more qualitative and complex functionality
involved in talent management.

For example, an HRIS can help to automate and

streamline processes such as employee timekeeping,
and when this data is integrated into an HRMS system
the timekeeping data can be analysed to improve
productivity and planning and in turn even to help more
efficiently automate tasks within the HRIS.
 Manpower agencies in
Bangladesh act
Manpower agencies in Bangladesh act as vital
bridges connecting employers with
skilled/unskilled workers and job seekers with
opportunities, both domestically and
internationally, by handling recruitment,
screening, training, and compliance, thereby
reducing hiring burdens, ensuring quality talent,
and supporting national employment goals. They
source candidates, conduct interviews, match
skills to jobs, manage HR functions like training,
and ensure adherence to labor laws for various
sectors, including overseas placements for
Middle East, Europe, and North America.
 Roles & Functions
i) Talent Sourcing & Screening: Finding and vetting
candidates (skilled, semi-skilled, unskilled) through
online portals, networks, and advertising, reducing time
and cost for companies.
ii) Recruitment & Placement: Shortlisting top profiles,
conducting interviews, negotiating terms, and placing
workers in permanent, temporary, or contract roles.
iii) Domestic & International Placement: Facilitating
local hiring and finding jobs abroad (e.g., Middle East,
Europe) for Bangladeshi workers.
iv) HR & Training: Offering services like workforce
planning, leadership development, skill enhancement,
and HR consulting.
v) Compliance & Support: Ensuring adherence to
local labor laws, handling paperwork, and providing
post-placement support.
vi) Market Exploration: BAIRA (Bangladesh
Association of International Recruiting
Agencies) members explore new job markets globally
for Bangladeshi manpower.
vii) Bridging Gaps: Addressing the high demand for
reliable labor in growing industries, from construction to
corporate sectors, by providing efficient staffing
solutions.
Impact:
For Businesses: Saves time/money, provides quality
talent, ensures legal compliance.
For Job Seekers: Offers career paths, connects them
to opportunities, helps unemployed youth enter the
workforce.
For the Nation: Supports economic growth by
facilitating employment and managing international
labor migration.
Thanks a
lot for
patience
hearing