Manpower: Making size matter

Bigger is not necessarily better. As "speed" becomes important in today's business world, having the "right size" is a key success factor for companies, Hewitt Associates senior consultant Lertsak Pengsangtong said. Hewitt Associates is a leading human-resources (HR) consulting company.

Last week, Hewitt invited senior HR executives from leading corporations to hear a briefing on "Manpower Optimisation". Its slogan was "The right people in the right place, at the right time and at the right price".

"Everyone faces the same problems, in that we have a talent shortage, and the same question, which is 'to buy or build' talent," Lertsak said.

But the real problem often lies in the fact that companies do not know  how many employees they will need to serve future business plans.

Also, as companies mature, income growth slows, but costs keep escalating with inflation, making the costs-to-income ratio critical for a mature business. Hence, "manpower optimisation" should be an answer for businesses that would prefer to link productivity and business goals with manpower planning, he said.

The first step is to create a "manpower landscape". The objective is to diagnose and understand your organisation strategically. The manpower landscape should divide processes into tiers, such as tier-1, which would include processes that require meeting customers; tier-2 for sensitive processes or back-office functions, which are critical and cannot be outsourced and tier-3 for processes that can be outsourced or centralised for streamlining.

Next, a "role profile" is drawn to categorise workers by their place in the tiers. For instance, a business-unit head and a branch staff may spend different amounts of time in each tier. "When we do this for every job, we can see whether or not we're a hand short," Lertsak said.

After seeing the manpower landscape, companies should benchmark their business ratios, such as sales per workforce, with their historical records or industry standards. Then they can set new targets and identify strategies and methods to achieve them.