Recruitment innovation: talent pipelines and supply chains

Companies that focus on developing labour supply chains will gain a significant competitive edge in the face of a more acute war for talent, write Allan Schweyer and Dan Hilbert

Companies that focus on developing labour supply chains will gain a significant competitive edge in the face of a more acute war for talent, write Allan Schweyer and Dan Hilbert

With the pending mass exodus of senior knowledge workers due to the retirement of the baby boomer generation, it has become essential for recruitment departments to move from being isolated, reactive and administrative to become aggressive and proactive parts of the organisation that are integrated and aligned with the top priorities of the business. By developing innovative, sophisticated forecasting and planning tools, combined with the principles of Supply Chain Management (SCM) for talent, this transformation can occur within a surprisingly short timeframe.

Talent or Labour Supply Chains may represent the most promising solution to workforce planning so far devised. Whether in the energy sector or in healthcare, the talent supply chain is built using process mapping, modelling and process engineering. At Valero Energy, the world’s twelfth largest company by revenue, a Labour Supply Chain (LSC) model instantly scales recruiting supply channels. Valero’s LSC system provides the technology and departmental business infrastructure to rapidly adapt and scale recruiting supply channels and targets to meet changing business conditions, objectives and competitive threats.

Valero’s system design was patterned after Dell’s “Just-in-Time” supply chain model taught at the University of Texas. The talent acquisition steps are modelled into six processes. The supplier interaction is modelled into three processes and the customer interaction is modelled into four processes. The processes are then mapped directly to talent acquisition and talent management software systems.

According to the Harvard Business Review, “The holy grails of supply chain management are high speed and low cost.” Not surprisingly, these and the principles above are adhered to by those most respected for the sophistication of their supply chains, including Wal-Mart, and Dell Computer. However, the supply chains in these companies aren’t just fast and cost effective. They are also:

• Agile: They respond quickly to sudden changes in supply or demand. They handle unexpected disruptions smoothly and cost efficiently.

• Adaptable: They evolve over time as economic progress, political shifts, demographics trends, and technological advances reshape markets.

• Aligned: They align the interests of all participating firms with their own (business interests). As each player maximises its own interests, it optimises the chain’s performance as well.

These characteristics are similar to those required by recruiting organisations: cost effectiveness, high quality, customer service-focused and scaleable. Add to this agile, adaptable and aligned, and it describes not only the makings of an effective staffing infrastructure model, but quite possibly the perfect staffing model for the globally competitive 21st century.

The continuous supply of talent is today even more valuable than the continuous supply of product and raw materials. The talent supply chain, then, must be continuously monitored, tuned and repaired to achieve bottom-line business objectives. The supply chain model itself enables levels of analysis and metrics impossible with current off the shelf talent acquisition systems. Nonetheless, the same level of metrics and analytics available to Wal-Mart and Dell for SCM, are now available for talent acquisition, delivery and management, but the tools must, in most cases, be custom configured and built into the talent acquisition platform.

Predictive workforce: managing from the future

With next generation predictive modelling systems, talent acquisition and workforce planning can be transformed from reactive administrative functions to proactive systems capable of accurately forecasting talent demand right to the individual job. Predictive modelling systems analyse historical employee records for turnover patterns and project turnover trends forward by position, location, level, division, department and salary. When talent needs for future capital projects and new systems, services and projects are added to the turnover data, a precise and comprehensive multi-year workforce needs map can be generated. The system becomes more accurate over time as the algorithms are adjusted based on projected gaps versus actual gaps on a quarterly basis.

Most would agree that we are on the verge of a more acute and protracted “War for Talent” than that faced in the late 1990’s. It is imperative that talent acquisition departments in organisations respond to this looming challenge. Many will not, and some of them will cause their organisations to fail outright. Some will respond by adopting proven best practices and by following roads ploughed by others. These organisations will likely survive but they won’t dominate, at least not on the strength of their staffing operations.

The rest will innovate successfully. These companies will gain a competitive advantage that will last for years. They will build a lead in proactive, predictive modelling-based talent acquisition during a time when talent is the scarcest and most valuable component of nearly every business.

Allan Schweyer is executive director of The Human Capital Institute and Dan Hilbert is director of recruiting at Valero Energy.

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