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Library Article

1/28/2010

Toward a Flexible Staffing Model
David Earle

Over the past year, we’ve been working more and more closely with the Thought Leadership Institute (TLI) and, in the process, seen something they’re developing that should interest you: a new tool focused on the general problem of staffing efficiency and the specific problem of contractor optimization.

Staffing efficiency, more or less everyone’s problem, is an issue we’ve been analyzing since 1998 in these UPDATES and in our annual reports. The contractor optimization component of this problem can be stated as a question: “How do I figure out what mix of in-house recruiters, contingent recruiters and third party recruiters is optimum for a given situation, and how should I alter this mix when faced with significant dips or spikes in hiring?”

Or in other words: “How can I create a flexible staffing model that responds efficiently and effectively to a wide variety of hiring situations, both known and unknown?”

For small companies, this may not be a big deal because hiring volumes don’t vary that much, but for mid-size and large companies it increasingly is. Conducting rigorous cost analyses, maintaining optimal staffing levels and producing accurate demand plans are three of the most complex challenges they face, especially in light of increasing executive scrutiny and a volatile economic environment.

Here is a highly condensed version of how the tool works. (A detailed presentation takes about an hour.)

First comes cost analysis. You plug in numbers to create a cost structure for each group (in-house staff, contingent staff and third parties). If you’ve used these sources in the past and kept halfway decent records, you probably have some, if not most, of the data. It’s just a question of pulling it together. If you have poor records, however, you’re sunk, and will only be able to dream about a better, more just world.

Next, you assign weights to variables like cost, speed and quality that reflect the culture and objectives of your organization. If this sounds complex, it isn’t. In fact, it’s kind of fun to play with the weightings until you get something that feels right.

Last, you look at demand scenarios:

What’s the most efficient mix for today’s known staffing demand?
What happens if I get a sudden request for 500 more non-exempt hires within 30 days?
What happens if I need 150 more mid-level managers in 60 days?
What happens if I need 50 more hard-to-find specialists or senior managers?

Each of these will require different personnel resources.

Once you’ve done the basic data input you can answer all of these questions by changing either the variables or the demands. If you’re considering a new supplier, plug his promised numbers into the tool and see what the net benefit is. If you’re weighing an increase in internal staff to handle expected growth, just run a couple of scenarios to see whether bringing in contractors for a few months makes more sense than hiring an RPO firm.

This is not a black box built by mathematical gnomes. It was built by staffing professionals who, while actually doing this work for Wachovia and other companies, took the time to build a tool for their own use. Now they’re beta testing it to spot any anomalies and shortcomings. From what I’ve seen, it’s pretty well baked and very cool.

Moving corporate staffing from a purely transactional function to a business-critical strategic function has been our profession’s holy grail now for at least a decade. Getting a businesslike grip on resources, being able to accurately measure cause and effect, and being able to strategize authoritatively are big steps toward that goal. Maybe someday we’ll be able to offer you established, benchmarked flexible staffing models in one of our reports. But not yet; in the meantime staffing is getting no easier, management scrutiny is increasing and we have work to do. TLI’s tool (in collaboration with Reveal Global Intelligence) is the best solution we’re seen.

The tool is in the late stages of development as you read this and its developers are looking for beta test sites. If you’re interested, give us a call and we’ll be happy to make the introduction. Also, stay tuned for an upcoming TLI webinar that will thoroughly explain the tool. (Disclosure: We have no financial stake in TLI or its services, although we do have a non-paid faculty appointment there and think they’re smart, experienced folks who are also fun to work with.)