In today’s volatile global corporate scenario, manpower rationalization is reigning supreme. Since outsourcing trends reduce business operating costs, worldwide outsourcing market now exceeds billions of dollars for most corporate giants in the western world.
Manpower optimization of instance involves multiple phases including demand forecasting, supply forecasting, and the like. The recruitment process requires sound planning and scrutiny and needs to be guided by company plan, as recruitment drives need to align with company needs for a long period of time.
Manpower Planning on the other hand stresses on putting the right people, at the right place, at the right time. The expectation is of getting them to do the right things accurately, especially to meet the goals of the organization involving current manpower inventory, forecast future manpower required, and design and development of employment and training programmes.
Compared to the other strategies, Manpower Rationalization relies on reorganization of a company to ensure a more effective structure. In the HR perspective, it refers to the discharge of an employee with the removal of the job position itself. These changes affect the organization, depending on the economic times. However, organizations adopt this method especially in case of technological advancement owing to extensive automation of processes.
Need for Manpower Rationalization
Many organizations large and small, opt to rationalize their staff in recent years to cope with the slumping economy, technological advancement, and changes in priorities. Manpower rationalization works when efforts are on with a desire to reduce costs drastically and in turn boost efficiency, enhance productivity, increase profitability and drive market relevance. The process requires the planned elimination of job positions in an organization in terms of rightsizing to reform efficiently. When some people in the organization are deemed as surplus, they will be laid off.
Organizations must now decide whether lay-offs should be the last resort or not.
The strategy is implemented reactively to economic scenarios or as a short-term response to dwindling profit or productivity. The activity also includes abolishing functions, eliminating hierarchical levels, products, edit tasks, consolidation of units, and the like.
Manpower Rationalization involves several benefits such as:
- Optimal Resource Utilization: It helps companies to eliminate the bloat and focus on their core competence. With resources utilized efficiently, organizations can make plans of expanding too
- Cost Saving: The strategy helps in sizeable cost saving as some jobs become redundant after a time while others can complete the same tasks efficiently, at lower costs
- Organizational efficiency: Facilitates major organization change and increases efficiency of the workplace with relevant job holders securing the posts
- Business Innovation: Drives processes, skills and technology, while settling financial risk for the time-being
- New market: Helps in exploring new markets with direct profit for economic safety
Every HR process needs to include company objectives in mind, before being considered for implementation. The purpose of each process is dependent on the economic climate too. Manpower Rationalization ensures that your organization does not spend on overheads and superfluous manpower in any way. The existing resources are paid and utilized optimally, ensuring better organizational efficiency, innovation and exploration of new markets with absolute certainty. It also helps organizations to survive during economic downturns and recession.