OnTheMark: Integrated Stochastic Resource Planning of Human Capital Supply Chains

Abstract

In this paper, we present a suite of innovative operations research models and methods called OnTheMark (OTM). This suite supports the effective management of human capital supply chains by addressing distinct features of human talent that cannot be handled via traditional supply chain management. OTM consists of novel solutions for (1) statistical forecasting of demand and human capital requirements, (2) risk-based stochastic human-talent capacity planning, (3) stochastic modeling and optimization (control) of human capital supply evolutionary dynamics over time, (4) optimal multiskill supply-demand matching, and (5) stochastic optimization of business decisions and investments to manage human capital shortages and overages. The OTM suite was developed and deployed as an important part of the human capital management and planning process within IBM, providing support for decision making to drive better business performance. This is achieved through important contributions in the areas of stochastic models and optimization (control), and the innovative application and integration of these models and methods in human capital management applications.

Workforce management: Risk-based financial planning and capacity provisioning

“…To address this set of challenges, we first observe that by definition the mode n à of the stationary distribution PðÁÞ corresponds to a solution of the optimization problem max n X K k¼1 n k log k À log n k ! subject to n 2 SðCÞ: (2) Recall that the mode of a probability distribution is a point of maximal probability. Next we define a natural continuous P relaxation of the state space n 2 SðCÞ and subsets of this relaxation SðCÞ ¼ fx 2 R K þ : Ax Cg and S l;k ðCÞ ¼ SðCÞ \ fx : x k ¼ lg, respectively, for which we first obtain the following optimization problem corresponding to (2):…”

“…As a core component of a larger suite of human capital management solutions [2], our risk-based stochastic capacity planning models and optimization methods, presented above, have been implemented and applied within various human capital management settings, including worldwide deployment within an IBM business unit. In this section, we present a number of results from different case studies and discuss our experiences with these methods over the past several years.…”

“…(We note further that accurate demand forecasting is an important research topic in its own right, but this is outside the scope of the present paper; most often, the inherent uncertainty in the demand process is captured through a statistical forecasting step within a larger human capital management process [2], the outputs of which, including trends and basic summary statistics, are used as input to the work described in this paper.) It is important to understand why knowledge of the precise timing of demand realization is such a critical issue in capacity provisioning and financial planning: in order to operate efficiently yet drive revenue or other business objectives, it is vital that an organization have the right number of people.…”

“…It is also noteworthy that the development of our framework is firmly grounded and motivated by several real-world workforce planning projects within IBM; for more details the reader is encouraged to peruse [2].…”

Efficient multifaceted screening of job applicants

“…With the information overload caused by the large number of applicants in large organizations, however, the use of automatic decision support through data mining and business analytics [3,17,8] is necessary. Fully automatic analytics-only talent management methods, however, have not yet been found useful in any organization [16], and so we do not consider this further step of automation.…”