Feature
Workforce planning – which takes a mid- to long-term view
Managing the Supply and
Demand for Talent:
A Human Capital Model
for the 21st Century
By Heidi Spirgi, Knowledge Infusion
A
mid all the business uncertainty in today’s economy,
one thing is certain: the rules have changed. That is
especially clear in the realm of human capital
management where layoffs, hiring freezes and reduced
hours have permanently altered the landscape. Businesses
know that if they are to stay competitive when the economy
turns, they will need to look different. They will not simply
be able to replace the jobs that have been eliminated – they
will need a workforce that is more qualified, more efficient
and more dedicated than ever before.
But the way is not clear. Building a renewed workforce
will require a high level of planning, and the ability to inte-
grate those plans with the management and deployment of
talent at all levels. It will require a unified, holistic approach
to the supply and demand for talent. And yet, many compa-
nies are ill-prepared for such an endeavor. A holistic
management of the supply and demand for talent requires a
new and integrated way of thinking about workforce plan-
ning, talent management and workforce management. All
three are essential elements to the talent supply chain.
of talent – has yet to be adopted in much of the business
world. Where it exists, it is rarely done in a substantive way
much beyond the forecasting of the future quantity of talent
(head count, budget, FTEs). Furthermore, rarely is workforce
planning coordinated with talent management, the mid-term
approach to managing talent. And, there is often little integra-
tion between talent management and the shorter-term
processes that comprise workforce management.
These disconnects are perhaps not surprising when one
considers the power of the vendor community to determine
buyer patterns, and the continued dominance of silos
throughout much of HR. As such, the holistic perspective
does not come easily.
The need for an integrated approach to human capital
management, in truth, emerged even before the current
recession. As the manufacturing economy gave way to the
knowledge economy, talent – rather than capital (hard
goods) and head count (bodies) – has become the essential
asset of most organizations.
Talent Supply Chain
To get a wider perspective on talent, it is helpful to think
about it in terms of a supply chain. This is not simply an
analogy; the principles of supply and demand, and of fore-
cast to delivery, apply as much to talent as they do to manu-
factured goods.
In a manufacturing supply chain, if one part of the opera-
tion lags behind the rest, causing a drag on the entire
process, the problem is immediately spotted and evaluated.
The underlying issue may lie in an entirely different area of
the larger operation, but the source of the problem can be
quickly pinpointed and addressed. Businesses solved this
challenge years ago with systems and process integration –
but have yet to apply that innovation to the area of talent.
Forecasting
Workforce planning is the forecasting of future talent
demand. Too often, however, companies plan for tomorrow
by looking at what is needed today and patterns which have
occurred in the recent past, e.g., turnover. There is scant
consideration of where the business is going, and what the
company will actually look like in the next few years. As a
result, most talent management leaders lack the insight
needed to tailor various talent programs to emerging needs
so that the workforce is ready when the demand hits. Train-
ing curriculums, for example, may not reflect rapidly
emerging trends. Ultimately, managers on the shop floor
and in retail operations will suddenly find themselves with
workers who lack the right levels of skill and training,
making the organization less competitive than it should be.
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Inventory, Production and Supply
In a holistic model, talent management systems leverage
the wealth of data delivered from talent management
processes to:
• Assess the talent inventory and how that inventory
compares with the talent forecast (the demand);
• Produce (develop and acquire) talent to fill the
demand; and,
• Supply (mobilize) the business with a steady pipeline
of talent to meet its business goals.
Order Management and Deployment
Workforce management, like workforce planning and
talent management, is most effective when it leverages
talent data that flows from other processes. If the right
workers are to be deployed in the right places at the right
time, talent management data is required. In order to best
fill an order for talent, whether it is a shift or a project, a
manager needs a full picture of the people within the organ-
ization to make the best business decisions.
Closed Loop
The disconnect between these three aspects of human
capital management and the people responsible for them
works in the opposite direction as well. Business leaders
responsible for workforce management may often fail to
communicate important performance or productivity meas-
ures to talent management leaders. Workers in a particular
retail operation, for example, might sell far more during
their preferred shifts. If talent management leaders do not
have this kind of information, they cannot train managers to
take sales figures into consideration when developing
employee schedules. Without operational/business metrics
tied to talent metrics, talent management is hampered at
every turn.
The Business Impact
It would be unfair, however, to cast blame in any one
particular direction. The fault lies not with the business
leaders in workforce planning, talent management or work-
force management, but in the lack of integrated data that,
together, can support business decisions. Organizational
models and strategies, integrated technology platforms, and
business intelligence solutions are all part of the answer.
But before change will occur, the business impact of the
disaggregated model needs to be more fully understood and
acknowledged in the industry.
Impact: Loss of Revenue
An example of the business impact of the lack of integra-
tion between workforce planning, talent management, and
workforce management is project staffing. In our consult-
ing, we regularly encounter business leaders who complain
that their lack of sufficient information about the organiza-
tion’s talent hampers their ability to compete for projects.
For example, government contractors that bid on large
14 OCTOBER/NOVEMBER 2009 • IHRIM.link • www.ihrim.org
projects often are required to present a comprehensive
staffing plan that details who in the organization has the
required skills, knowledge and experience for the project. If
the contractors don’t have ready access to that data,
however, their staffing plan may appear insufficient – and
they may lose the bid.
Impact: Costly and Unnecessary External Hiring
Another example: With each new project, a logistics
company that handles distribution for supply-chain projects
has 30 to 60 days to put together a large-scale, distributed
team. However, because the line managers who assemble
these teams don’t have insight into the skills and experi-
ence of the company workforce, they often hire new
workers – whose competencies they do know – to staff the
project. Once the project is over, layoffs inevitably follow.
There is a great deal of wasted manpower and company
resources on the hiring, training, and eventual layoffs of
external workers.
Impact: Loss of Competitive Advantage
Another example: In 2005, a traditional media company
established a long-term goal to become the leading digital
media company in the United States by 2015. Business
units have been reorganized and investments in technology
made. However, the company lacked a talent plan, which
would integrate long-term workforce planning forecasts and
business modeling with mid-term talent management efforts
to source, attract, develop, and retain the best digital media
talent in the country. In addition, the company lacked the
insight into the digital media talent across the organization,
preventing them from deploying digital media expertise in a
project-based work model to optimize the talent that they
did have.
In order to address the above business challenges, organ-
izations need to develop a strategy that ultimately aligns
talent data across workforce planning, talent management
and workforce management functions. Today, most compa-
nies are a far cry from that with non-standardized data scat-
tered in any number of locations. An employee’s skills and
competencies, for example, may be a performance review
that exists only in a Word document on a manager’s
computer and in a filing cabinet in HR. An employee’s learn-
ing history might be split between a learning management
system and an operational system that tracks certifications,
while their ability to relocate, desired location and desired
next job may only be in a manager’s head. An employee’s
customer and product experience is likely not in any HR
system and may possibly exist in an operational database of
some sort, e.g., customer relationship management (CRM),
professional service automation (PSA) or project manage-
ment tool.
It is far too laborious to compile such information from
so many sources, so the business’ decisions are made
without full insight into its most critical asset – its talent.
In order to bring this data into alignment in a way that
can drive business decisions across the entire talent supply
chain and enable companies to effectively manage all talent plan that supports the organization’s business strate-
phases of the talent supply chain (long-, mid-, and short- gies and plans. All three functions – workforce planning,
term supply), companies must focus their efforts in three talent management, and workforce management should be
areas: people, process and technology. developed in a way that directly supports the talent plan.
People: Aligning Your Team. The first step in the Obviously, for most companies this means that they need
journey toward full alignment of the talent supply chain is to determine what a talent plan consists of, as well as a
to develop a governance council that brings the right consistent process (or processes) to build the talent plan. A
players to the table. The governance council would include good place to start is with your governance council. The
leaders from HR, IT and Business Operations. The goal of council should determine the key elements of the plan,
the governance council is threefold: developing a template that can be used consistently by each
1. Ensure the talent supply chain is viewed holistically business unit. A robust talent plan consists of the following
and that priorities, strategies, and plans include all elements (See Exhibit A):
three areas of the talent supply chain.
2. Ensure a common set of talent attributes are developed
and leveraged across the entire talent supply chain. Human Capital Model
3. Develop an integrated approach to measuring and
Business
s Plan
optimizing talent (planning, management and deploy- „ Long-
Long-term
g term Str
Strategic
ategic
g Goals
Goa
oals „ Mid
Mid-term
-term Business
Bussiness Strategies
Strategies „ S
Short-term
hort-term O
Operational
perational Eve
Events
nts
t

ment) that incorporates operational measures that Talent

Talent Plan
Plan

reflect true business performance (sales, volume, Quantity

Q uantity Quality
Quality Timeframe
Timeframe

quality, revenue, etc.).

Talent
Ta
Type:
Typ e: Experienc
Experience:
ence:
Capability:
Capability:

lent De
FT/PT
FT/PT Headcount
Headcount Indust
s ry
Industry Behavior:
Skills
Skills
C ingent
Cont
Contingent & Geography
Geograph
phy Prodduct
Product Culture Long-term
Long-term Mid-term
Mid-term Short-term
Short-term

Demand
Competencies
Competencies
Of
ffshore
Offshore Budget
Budget Globbal
Global Motivation

mand
Knowledge
Knowledge
Outsource
O
Ou tsource Leadership
Leadership Values

nform
IInform
From HR, the council should include stakeholders respon-
Workforce
Workforce Talent
Talent Workforce
Workforce
sible for workforce planning, talent management strategy and Time
Planning
Planning
mos
12 mo s – 10 yrs
yrs
Management
Management
0 –36 mos
os
mo
Management
Management
0– 6 mos
0– mos

business processes, workforce management (when part of

Shared
Shared Talent
Talent Attribute
Attributes
tributes
ply
Supply

HR) and HRIT (Operations/Systems/HRIS, etc).

ent Sup

Adapt
Ad
Source
S
Sour ce Mobilize
Mo bilize Engage
Enggagge Align
g Reward
Re ward Develop
Dev elop Connect
Connect

apt
Talent

Information Technology should also be represented on

Tale

the council to serve as facilitator, ensuring that any technol-

ogy initiatives are coordinated across the business and visi-
bility into any business-led initiatives in the area of
workforce management or talent management are brought
forth to the council and integrated into the strategy and
plans at the corporate level. This is particularly important in
global and decentralized organizations where we often see
time and attendance, scheduling and skills/competencies
initiatives sprout up at the business unit or functional level.
Finally, the governance council should also include repre-
sentation from the line of business. The stakeholders vary by
industry. In retail, store operations should be represented; in
manufacturing – production; in health care – nursing; in
hospitality – each major department may need to be repre-
sented or collectively by Finance; in services or government
contracting – operations. The line of business stakeholder is
responsible for providing direction on the following:
• Productivity measures and performance factors. What
operational measures are meaningful to the business
and what data is available at the employee or team
level?
• What data would help them be more effective in
managing talent? For example, what do they need to
know to build more effective schedules, staff projects
more efficiently, and isolate workforce performance
issues more rapidly?
• The relative urgency/impact of potential technology
investments.
Process: Integrating Your People Functions. At the
core of a robust talent supply chain is a comprehensive
Measure
asure Workforce and Business
usiness Performance
Knowledge Infusion Proprietary and Confidential, Copyright 2007
1
Exhibit A.
Quantity:
• Type – How much capacity is needed for a certain type
of work or worker? This includes the type of resource
that is optimal to fill the demand: Full-time, Part-time,
Contingent, Offshore, Outsourced resource;
• Head Count and Budget – Cost and allocation of
resources across the business; and,
• Geography – Where the talent should be located.
Quality:
• Capability – Skills, Competencies and Knowledge;
• Experience – Industry, Product,
Global/Regional/Local, Leadership; and,
• Behavior – Culture, Motivation, Values, Preference.
Time Frame:
• Long-term – Business goals (revenue, quality meas-
ures), industry trends, growth strategy (M&A versus
organic);
• Mid-term – Operational plans including capacity
expansion (retail store, health care wing/building/beds,
manufacturing – plant, etc.), new product or service
development, new market (country, region, city), regu-
latory changes, etc.; and,
• Short-term – Business events, seasonal patterns,
promotions, etc.

www.ihrim.org • IHRIM.link • OCTOBER/NOVEMBER 2009 15

 *Note: Workforce planning should be deeply involved in Conclusion
the creation of talent plans. The Workforce Planning team
If we as HR and IT professionals are committed to
should provide direction and insights into the business
driving measurable business results through the more effec-
planning process about the availability, cost, and location of
tive management of talent, it is time that we begin to build
talent that is needed to execute business strategies. More
an integrated framework to truly manage the supply and
and more businesses are incorporating this information into
demand of talent. Like in the manufacturing supply chain,
their business plans. The availability of internal and exter-
long-, mid- and short-term planning and management
nal talent is now beginning to influence whether, when, and
requires integrated processes built on common goals and
where an organization enters a new market.
leveraging common talent attributes. Whether you are
In addition to a holistic talent plan to truly manage the
analyzing available talent to execute your five-year business
talent supply chain, organizations need a common language
plan or scheduling your team to ensure maximum produc-
or “currency” to describe what talent consists of. This
tivity on a shift, you are, in essence, managing the supply
common currency is used by all talent processes to plan,
and demand of talent. To execute any aspect of the talent
source, mobilize, assess, develop and reward talent. This
supply chain in a vacuum is to plan with only half of the
currency is comprised of an agreed upon set of talent
picture.
attributes which, together, represent the otherwise nebu-
Workforce planning, talent management and workforce
lous concept of “talent.” Unlike machines, parts and
management, while historically treated as processes and
numbers fail to do justice to the value represented by an
systems in silos by HR professionals and vendors alike,
individual employee. As such, organizations need to define
together form a whole that is larger than the sum of their
what matters to them and consistently track and manage
parts. Companies can successfully manage the supply and
talent using this common set of attributes. (See sidebar on
demand for talent – and become stronger than ever – if
page 17 for a sample set of talent attributes.)
they are willing to think and act in new ways and strive for
A robust talent plan in place describing talent demand
a new human capital model for the 21st century.
and a common set of talent attributes describing supply,
workforce planning, talent management and workforce
management work in tandem to execute and optimize the About the Author
talent supply chain. Heidi Spirgi is president and co-founder of
Knowledge Infusion, a strategic consulting
Technology: Transforming Data to Insights organization that works collaboratively with
clients to help them achieve true business
Managing talent according to this unified approach
results from technology solutions that manage
requires an enormous amount of data and information – far
and drive the workforce. As one of the foremost thought
too much to be handled in a manual environment. Managing
leaders around leveraging technology to transform talent
the talent supply chain requires companies to automate
management processes, Spirgi is responsible for Knowl-
their workforce planning, talent management and workforce
edge Infusion global services and service delivery. The
management processes, as well as develop an integrated
innovative and business-results focused services have
reporting and analytics strategy. Just as with the manufac-
grown the firm into the recognized leader in delivering
turing supply chain, collecting talent and operational data
talent management services to over 150 global clients. She
and using it to drive business decisions is an essential part
has more than10 years experience in HR and talent
of managing the supply chain.
management including leadership roles in verticals for
However, in today’s vendor landscape, few vendors, if
financial services, manufacturing and retail industries, and
any, are able to deliver effective solutions across all three
launching performance and learning products at People-
functions. As such, most companies are forced to imple-
Soft. In addition, she worked globally as senior HRMS busi-
ment separate solutions for each of the three areas and look
ness analyst for Seagate Technology and Swiss Bank
for alternate ways to generate reports and insights that
Corporation in Zurich. She is a frequent author and
require data from all three platforms. Solutions that should
speaker on the topics of learning and development trends
be considered as part of your integrated strategy include:
and talent management strategies and technologies. She is
1. Data warehouse and reporting toolsets,
an active member of ASTD, IHRIM, and eLearning Guild
2. Service providers who derive workforce analytics and
and holds a Bachelor of Arts degree from the University of
insights from multiple data sources provided by the
Michigan and a master’s degree from UCLA. She can be
customer,
reached at heidi.spirgi@knowledge-infusion.com.
3. Visualization tools to display and aggregate data from
different sources in a single dashboard or scorecard,
and
4. Portals to present information from diverse sources in
a unified way with a consistent look and feel.

16 OCTOBER/NOVEMBER 2009 • IHRIM.link • www.ihrim.org

Talent Attributes Companies that are most and can take awhile to
successful with talent attributes develop. Tracking experiences
Although workforce planning,
practice the following behaviors: and preferences can often
talent management and workforce
1. Establish standard attributes yield more value to the busi-
management have historically oper-
and values that are used in all ness.
ated as discrete processes within an
talent processes and stay the 3. Keep it simple. Do not track
organization, they each benefit
course. Do not change the an attribute unless you can
when a common currency of talent
attributes frequently. Consis- define a business decision that
attributes is defined for the organi-
tency will yield value over the attribute is needed for.
zation. Talent attributes are the
time as the business grows in 4. View the attributes as a busi-
dimensions of talent that an organi-
its understanding and usage of ness vocabulary for talent.
zation considers important and
the attributes. Success is defined by
together represent the talent assets
2. Expand the notion of talent managers using the attributes
of the organization. They describe
attributes beyond competen- when they describe talent on
that asset in ways that are mean-
cies. Competencies are hard their team.
ingful to the business.
Workforce planning evaluates
what the future demand for the
attributes will be, and where the
organization stands in relation to
that now. Talent management hires,
develops, assesses and rewards
talent based on these attributes.
Workforce management uses them
as criteria for deploying the right
workforce to shifts, customers,
projects and locations. The follow-
ing is a list of common talent attrib-
utes:
• Competencies
• Skills
• Critical experiences
• Languages
• Customer, product, industry
and geographic exposure
• Potential
• Flight Risk
• Performance ratings
• Education
• Work history
• Ability to relocate
• Desired location, shift and next
job
• Leadership abilities
• Knowledge
• Certifications and licenses
• Training
• Behavioral and personality
attributes
• Learning style
• Preferences: shift, location,
position

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