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Workforce Management: The Production Planning Portion of HR



Workforce planning is one of my most favourite subjects in the human capital space, as it is all about supply and demand.  Factories and businesses that make things have been balancing out supply and demand for hundreds of years.  Whether it was a hundred plus years ago the number of horseshoes ready in stock to be used versus the need or in the modern era, the supply of a new model of an Apple iPhone versus the demand for the latest and greatest.  For each of these, someone had to determine how much to have in stock, available to sell versus how long would it take to get replenishment stock.  And the replenishment stock lead time was based on the speed of production, the supply of raw materials and the lead time for transport, which influenced the ability to change the supply profile and therefore meet the demands of the customers (or not as the case may be). 

Dozens of books are available on production planning, and I am sure an equally large number of workforce planning.  A quick review of Amazon shows more than 28,000 books on production planning and greater than 4,000 on workforce planning.  So there are a lot of both subjects.  And I would argue that if you read a good book on production planning, for example, Chapmans Fundamentals of Production Planning and Control or even Operations Management for Dummies you would get insight that would be very valuable for Workforce Planning.

The question is, why is it so hard to do workforce planning?  After all modern, IT enabled, production planning techniques have been in place for well over 25 years.  I think the answer goes back to the root of a large number of challenges in the HR function, the problem of data.  To do workforce planning well, you have to have good data definitions and the ability to ensure that those definitions are correctly used. 

Definition - Workforce planning, in simple terms, is the process of ensuring that the business employs the right staff at the right time and the right cost.

If we break down each of these three areas: -

Right staff – to know what the right staff are you need to have role/job descriptions, competency definitions, grades or bands (manager), soft skills, experiences, and the list goes on.  Every organisation has to determine what level of codification they need to plan for the right staff.  In addition to this, part of the definition of right could include the source and type of person,  Full time?  Remote?  Crowdsource?  Contractor?

Right time – like the production planning example above, understanding what the lead time is to find and make productive the right person is critical to not reduction the efficiency or effectiveness of the business due to key positions being left unfilled for long periods of time.

Right cost – this could be salary benchmarking, are you getting a skill/person for a competitive rate?  Or it could be what we can afford as the products we sell in the market can only command a price of X. Therefore, we can only pay our people Y?  These and other factors will help to determine what the right price is.

Visier has written some excellent articles on workforce planning, one of them is about data-driven HR and the need to plan ahead to avoid shortfalls in talent.  A good set of resources in the article for those that want more on the subject.  Another interesting point that Visier made was as part of your workforce planning process account for the net importers and exporters of talent within your company.  Those parts of the business that are entry roles, and where great talent will leave if they are not considered for bigger and better things, could be sources of supply for other parts of the organisation.

Another way to help think about what data is needed is the four “C” – borrowed from TalentManagement: -

  • Capability speaks to talent with the right skills at the right time.
  • Capacity speaks to the amount of necessary talent.
  • Cost refers to budget constraints.
  • Construct refers to how talent is going to be constructed or organised.

Whether it is the four C’s or some other definition, it still goes back to data definitions.  With all the changes in supply (the talent in and outside our organisation), and demand (how much do I need and when) along with the cost pressures, you have to ask why you would not be doing workforce planning at the CEO level.  After all, labour in most organisations is the number one cost.

Mary Sue Rogers

Posted On : 04-07-16

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