Decision Models for Workforce and Technology Planning in Services

Abstract

Today's service companies operate in a technology-oriented and knowledge-intensive environment while recruiting and training individuals from an increasingly diverse population. One of the resulting challenges is ensuring strategic alignment between their two key resourcestechnology and workforcethrough the resource planning and allocation processes. The traditional hierarchical decision approach to resource planning and allocation considers only technology planning as a strategic-level decision, with workforce recruiting and training planning as a subsequent tactical-level decision. However, two other decision approachesjoint and integrated -elevate workforce planning to the same strategic level as technology planning. Thus, we investigate the impact of strategically aligning technology and workforce decisions through the comparison of joint and integrated models to each other and to a baseline hierarchical model in terms of total cost. Numerical experiments are conducted to characterize key features of solutions provided by these approaches under conditions typically found in this type of service company. Our results show that the integrated model is lowest cost across all conditions. This is because the integrated approach maintains a small but skilled workforce that can operate new and more advanced technology with higher capacity. However, the cost performance of the joint model is very close to the integrated model under a number of conditions and is easier to implement computationally and managerially, making it a good choice in many environments. Managerial insights derived from this study can serve as a valuable guide for choosing the proper decision approach for technology-oriented and knowledge-intensive service companies. capacity, this advantage is offset by the fact that the technology is often more expensive and requires specially trained employees to operate it. Conversely, older technology is often cheaper but less efficient.Determining the right types and quantities of technology to purchase, as well as the right time to purchase, are critical decisions for a company in securing the capacity sufficient to meet demand at all times.Meanwhile, different types of technology require different skill sets; only employees equipped with the appropriate skill set can operate a particular technology. Therefore, service companies must make workforce decisions to hire and/or train employees for the desired skill sets.A company builds a portfolio of the employee skill sets in three different ways: by hiring new employees with the required skills; by training current employees; or by hiring and training, which is to first hire new and unskilled employees and then train them to the desired skills. To distinguish the latter two, we call the training of current employees as cross-training, and the training of new and unskilled employees as initial-training. Hiring new employees who hold the exact required skills brings immediate benefits to the company, although the cost associated with the new hiring can be expe...

Organizational Learning and Management of Technology

“…Such systems can be helpful when the alignment of both technology and workforce planning is critical (Gaimon et al 2011). Consider service contexts that are knowledge-intensive where making capacity decisions is influenced by both individual skills and the type of technology assigned (Li et al 2015). For example, in software development projects, through transactive memory systems, teams can effectively allocate tasks and coordinate specialized roles (Staats 2012).…”

Workforce management in operations: what enterprising communities can learn from this?

“…One notes a need to convert the mathematical models into practical applications, test them and eventually improve them so that they can be generically applied by companies in WFM in operations (Lee et al , 1997; Stolletz, 2010; Smilowitz et al , 2013; Hewitt et al , 2015; Hopp, 2018; Turan et al , 2021). On the other hand, themes within vocational behavior and the development of practical human resource management strategies (Wirojanagud et al , 2007; Liou and Lin, 2008; Cools et al , 2009; Berber et al , 2012; Valeva et al , 2017; Martinson and Leon, 2018) or the use of information technology in workforce planning processes (Mundschenk and Drexl, 2007; Sanchez-Rodriguez et al , 2011; Li et al , 2015) have received greater attention from researchers. However, here too, a modest number of starting points can be identified, such as lean thinking.…”

“…Several studies have been developed workforce planning operation models (Stolletz, 2010; Campbell, 2012) and human resource cost minimization models (Judice et al , 2005; Huang et al , 2012; Li et al , 2015). We see a need for further research to verify how achieving economies of scale requires multiple skilled operators.…”

“…To this end, we position our proposals at the level of the specific subfields identified. These gapscategorized and highlighted in Table 3 provide a path for future research to assist in managerial decision-making on WFM in operations 4.4 Need for research at the workforce management and costs level Several studies have been developed workforce planning operation models (Stolletz, 2010;Campbell, 2012) and human resource cost minimization models (Judice et al, 2005;Huang et al, 2012;Li et al, 2015). We see a need for further research to verify how achieving economies of scale requires multiple skilled operators.…”

“…On the other hand, we find that research in this field of study relies heavily on proposing mathematical models in an attempt to assist companies in forecasting their workforce (Lee et al, 1997;Stolletz, 2010;Smilowitz et al, 2013;Hewitt et al, 2015;Hopp, 2018;Turan et al, 2021). However, this is a field of study that is also related to human resource management itself and the characteristics of individuals (Cools et al, 2009;Huang et al, 2012;Li et al, 2015;Calzavara et al, 2020).…”