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Micah Fairchild Uncovering the Truths Behind the 5 Workforce Planning Software Models

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 By Micah Fairchild

Understanding the 5 Models of Workforce Planning for Software Selection

The process of strategic workforce planning is hot right now—and by proxy, so is the strategic workforce planning software market. That's because companies are increasingly becoming aware of the sizeable advantages this technology can bring. In fact, a recent report from Bersin & Associates indicates that organizations that leverage workforce planning software solutions have "44% higher growth revenue and 26% higher revenue per employee".

This is due in no large part to the fact that no other process can yield the deep, meaningful business intelligence that a mature strategic workforce planning process can. Indeed, even Gartner's Thomas Otter characterizes it as "the systematic identification and analysis of what an organization will need in terms of the size, type and quality of workforce to achieve its objectives". Here's the problem though--the dirty little secret that no one's talking about—all workforce planning software solutions are not created equal! I don't just mean that some effectively integrate and others don't, I mean there are different workforce planning models that different software solutions support. For example, head count tools (which work off a specific model) work great with financial planning measures for payroll, but don't fare too well when looking into talent segmentation (which work off a different model).

Given that it is essential for workforce planning software to accurately take into considerations business-specific rules, complex patterns/algorithms, and the like, there are significant reasons why organizations should know the difference between these models—not the least of which are the ramifications for ending up with a solution that doesn't support strategic objectives. Indeed, not all organizations need the same level of analysis or predictive power, and as such not all organizations will need the most robust statistical modeling tools at their disposal. Likewise, not every person in an organization needs to understand (or even know about) these different models, but it is imperative that the team responsible for vendor selection be aware of which analytical models support their organization best. Given that fact, here's a breakdown of the different quantitative workforce planning models that software vendors support:

Equilibrium Models: Also known as ratio/trend models, these type models are little more than simple extrapolated forecasts that utilize past data to trend what might be possible in the organization's future state should no change occur. These models are extremely simple and have limited utility, especially for long-range planning activities. Consider these only for status quo issues. For example,

Deterministic Models: In the context of HR, the best representation of a deterministic model is that of the career "ladder". Always considering events in fixed terms, deterministic models such as the career ladder are linear and predictable. However, due to the considerable differences between generations of workers, the career ladder (and by proxy deterministic models by and large) has largely been discounted—with increasing numbers of organizations turning to the career "lattice" instead.

Change Models: Mainly focused on elements like probability and regression analysis, these models are typically seen via the supply chain technique of push/pull. More specifically, Push Models are characterized by flows in/flows out resulting in estimated future-state figures and are particularly well-suited to situations where promotion/wastage probabilities are equal. Pull models on the other hand work against the assumption that promotion and wastage (and thusly flows in/flows out) can be controlled. In reality, very few organizations only look at either push or pull separately--more often taking both assumptions simultaneously.

Network Flow Models: Also known as Dynamic Systems Models, Network Flow Models enable "what if" analysis; focusing on predicting outcomes through interactions with other variables. For instance, in the case of succession management what is the probability that a given employee who is a certain age, a certain gender, and certain profession will retire?

Optimization Models: By far the most complex of the workforce planning models listed, Optimization Models use a combination of statistical techniques and are typically partnered up with the organization's overall strategic planning process. These models start with the desired future-state and through simulations and scenarios, work backward to determine what needs to happen to achieve that future-state. This type of modeling requires input from multiple streams including financial, physical, and human resources, and is simply not possible without a fully integrated suite.

Conclusion

Regardless of how in-depth your planning process is or which workforce model is needed by your organization, it's important to note that all organizations should put forth some type of effort to determine the future supply/demand of their workforce. Ask prospective vendors which model(s) they support, and match up your needs to their offerings.

The above models only represent the quantitative side of the argument. In practice, both quantitative and qualitative data (gained through techniques such as Decision Analysis Forecasting and Delphi Process) are needed in order to have a workforce planning process that is truly fruitful. In fact, neither can truly function without the other. However, the software for your quantitative data is what will allow for the greatest insights into your workforce. As such, careful evaluation of both vendor specifications and organizational needs are in order. As Gartner's Otter puts it, "Understand what you are trying to accomplish". After all, different tools have different strengths. End

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It is imperative that the team responsible for workforce management software vendor selection be aware of which analytical models support their organization best."

 

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