New Book by Boudreau Links Inventory Techniques to Workforce Management

Thanks to our board member David Creelman for today’s guest post.  Readers who’d like to learn more about technology for workforce management analytics can find more information here.

USC professor John Boudreau has a new book called Re-tooling HR. In it he shares ways for HR to draw on analytical tools used in other parts of the business. Whereas most work on talent management focuses on the managerial elite, the analytical tools Boudreau discusses are often most useful in the hourly workforce where you have a large population of workers.

One set of analytical tools Boudreau thinks HR leaders can learn from is inventory management. The recruiting function tends to focus on filling vacancies with good candidates as quickly a possible. Curiously, that’s not how the inventory managers approach the problem of ‘vacancies’ in materials. Inventory managers look at the cost of holding stock, the opportunity cost of shortages, the economic order quantity and so on then optimize stock levels. For some goods it may make sense to have ‘too much’ for other it’s cheaper to put up with occasional stock outs. However, it is unusual for HR to think this way; to think for example that we might want to have 5% too many maintenance technicians on the grounds that the costs of being short-handed are greater than the cost of ‘excess’ employees.   Conversely it maybe that it’s worth putting up with too few shippers/receivers and hire a bunch at one time to minimize the cost of recruiting and training.

Boudreau is not making specific recommendations, merely pointing out that there are well-developed analytical tools that can cause us to think differently about people management.  Not only can this improve workforce management, it can be a good way for HR to connect to line management by using analytical tools they are familiar with.

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