Talent

Four Ways Supply-Chain Thinking Refines Staffing

Yesterday’s Leadership Daily Advisor examined the growing prevalence of supply-chain wisdom in talent management and how the practice is enabling company leaders to better manage the ups and downs of staffing needs and business cycles. Today’s issue drills down into five traditional supply-and-demand concepts—and how they apply to workforce planning.

A Talent Management Tune-Up

In relating manufacturing measures to your talent pipeline, consider these connections, all of which aim to hone the forecast:

Avoid inventory buildup. This supply chain concept directly relates to managing uncertainty around your talent needs. Figuring the odds of being wrong—and ending up with too much inventory—can lead to better talent forecasting and reduce the likelihood of incurring higher costs.

Employers often talk positively about having a “deep bench” of talent, says Peter Cappelli, the George W. Taylor professor of management at the University of Pennsylvania’s Wharton School and director of Wharton’s Center for Human Resources.

“Yet if you think about it in supply chain terms, a deep bench is the equivalent of lots of inventory, which sounds terrible when we think of products,” he says. “In fact, it’s worse when we talk about talent. That’s because an inventory of talent is much more costly than an inventory of widgets.”

Take the portfolio approach. Taken from the technique of operations research, the goal here is to minimize the variability that occurs when different markets are headed in different directions.

In talent management, the concept means balancing out the kinds of errors that might occur, for example, when different divisions in a large company try to predict the number of salespeople or engineers that each division will need. Some will guess too many, while others will estimate too few, but if you pool these predictions, it’s likely the variations will cancel out rather than multiply.

Reduce bottlenecks. Instead of hiring a complete team all at once, adopt a staggered hiring approach. The advantage may be an easier time adjusting the amount of hiring to precisely match any changes in demand or business conditions.

Smooth out “queueing.” Queueing problems may happen when employees are in line for certain promotions or rotational assignments, for example, but can’t progress because incumbents have no vacancies to move into—the result of, say, a business downturn, new direction, or product redesign. “The analogy in manufacturing is an ‘unbalanced assembly line,’ ” Cappelli notes, “in which inventory builds up behind the slower-moving station.”

To fix the logjam, companies that coordinate their different talent development efforts into one common program can offset the mismatch by moving candidates around when some divisions overshoot demand and others undershoot it, he concludes.

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