Decision Models for Workforce and Technology Planning in Services

TL;DR

This paper compares hierarchical, joint, and integrated decision models for aligning technology and workforce planning in service companies, finding the integrated model offers the lowest cost and the joint model is a practical alternative.

Contribution

It introduces and evaluates joint and integrated models for strategic workforce and technology planning, highlighting their cost benefits over traditional hierarchical approaches.

Findings

Integrated model achieves the lowest total cost.

Joint model is nearly as effective and easier to implement.

Strategic alignment improves resource utilization and reduces costs.

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 resources - technology and workforce - through 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 approaches - joint 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 the 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 the 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 many 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.