A manpower planning model is developed to decide recruiting and training levels over a time horizon, by minimizing the reference cost, subject to certain operational constraints. The model consists of two submodels: (a) a manpower supply model based on Markov transition rates in which skill grade transition of workers is altered by the training budget, and (i) a linear programming model which optimizes the recruiting level subject to some constraints. The heuristic procedure connects the submodels by an iterative process leading to improved solutions. A numerical example is presented to illustrate how the model can be used for recruiting and training decisions.