Manpower is the most expensive and complex resource for any organization. It involves careful consideration and planning as it is affected by both internal and external factors. As a manager, you will be tasked with workforce management decisions. It will involve specifying the number of available workers and will be required to carry out business operations optimally.
To be able to devise a plan to increase or decrease manpower sustainably requires forecasting. It helps companies use the available resources to the fullest by identifying and reorganizing the team workers to improve productivity.
In this article, we will explore manpower forecasting in human resource planning.
What is manpower forecasting?
Manpower forecasting helps prevent shortages of workers and laborers within the company by accessing the current workforce levels. It also helps quantify how many people and positions can be expected soon. With systematic manpower forecasting, businesses can meet the human resource requirements of future business challenges.
This is why manpower forecasting is critical to meet your organization’s business goals. When a company fails to forecast manpower needs, there can be a severe gestational lag in the workforce. It can exist at any level of manpower. For example, if you are in the manufacturing industry, you will need skilled machinists who can operate CNC machines.
Suppose there is an upcoming surge in production to meet the increased customer demand, but there is no manpower forecasting. How will you anticipate or prepare your workers to meet the increased production demand? Manpower forecasting facilities design skilling programs for the workers to ensure no gap in the workforce.
This is how you can maintain the correct quantity and quality of manpower as and when required. At the organizational level, the absence of manpower forecasting can result in acute understaffing or underutilization of highly skilled workers in the company.
Why manpower forecasting is needed?
Manpower forecasting is essential to maintain the correct headcount per the company’s requirements and objectives. Foremost, you require manpower forecasting to anticipate the need for increased labor to maintain optimal productivity within the company.
Another important reason why manpower forecasting in human resource planning is critical is to maintain the pool of skilled workers. For instance, if your manufacturing unit has installed machinery that requires providing operators with specialized training, you must start using such machines for production before you can begin using such machines for production.
You will need trained workers to operate the machines to keep production optimal. With manpower forecasting, you can facilitate training planning well in advance. It is the only way to ensure that required manpower, both in terms of quality and quantities, is available when you need it.
The labor market fluctuation is another reason manpower planning and forecasting are essential for businesses. A recent example is how the COVID-19 pandemic spooked the labor market, resulting in large-scale unemployment and a shortage of available labor. There was a large gap between the demand and supply in the labor market.
To mitigate such workforce risks, the human resource must plan the supply of workers to meet the demand as it arises. Manpower planning and forecasting ensure that you always have a poll of skilled labor to support production and protect your revenues against labor market distortions.
Another reason for manpower forecasting is in the short run, where you have to anticipate upskilling existing workers to support the production of goods and services. It is often required when companies choose to upgrade existing technological infrastructure.
There arises a need to train workers to avoid skill shortages. Manpower forecasting can help companies stay afloat, such as upskilling requirements.
Different methods of manpower forecasting
Simply put, manpower forecasting is the process of estimating future human resource requirements. As mentioned before, manpower forecasting in human resource planning can be affected by internal and external factors; you must use the correct methods of manpower forecasting suitable for your organization.
Here are the most common methods of manpower forecasting:
1. Work-load analysis
It is a suitable method of manpower forecasting for industries where the workload can be easily measured, such as construction, mining, and manufacturing. Workload analysis involves a set of processes to calculate the workload of a position, sub-position, and the number of workers required to fill the position and sub-position.
Suppose a company has an estimated production of 1 50,000 units, and it takes two man hours to produce each unit. Also, the previously calculated workability of each employee is 1500 man-hours per annum. Workload analysis can be used to calculate the demand for human resources as follows:
Estimated total annual production = 1, 50,000 units
Standard man-hours required to produce each unit = 2 hrs
Estimated man-hours needed to meet production goal (1,50,000 x 2) = 300000 hrs
Workability/contribution per employee = 1500 units
Estimated no. of workers needed = 3,00,000/1500 = 200
The example shows that the company will require 200 workers in a year to maintain the production level of 1 50,000 units.
This is a simple example. Workload analysis also considers other factors like absenteeism rate, rate of labor turnover, machine breakdown, strikes, power failure, etc.
2. Workforce analysis
Workforce analysis makes the foundation for manpower planning and forecasting. It determines the rate of influx and outflow of employees. It also provides a sufficient margin for labor turnover, absenteeism, and idle time to make accurate workforce forecasts to meet production requirements.
For data, workforce analysis relies on tools that record overtime, leaves, and absenteeism. Truein is a robust manpower attendance management tool with advanced leave, absence, overtime, and shift scheduling capabilities.
As a hardware-less, cloud-based employee time and attendance application, it can be deployed at any business unit; be it manufacturing, construction, mining, etc. Schedule a free demo today and see how it can help to automate attendance management in your organization.
Manpower forecasting is an efficient way to anticipate future human resource demands by utilizing past data. It provides an exact approximation of the expected changes in the workforce demands to understand the possible changes in manpower clearly. Forecasting manpower needs give businesses the ability to cope with emerging challenges.