Talent Pooling and the 'Newsboy Model'
The Newsboy Model is a mathematical model used in operations management and economics to determine optimal inventory levels, typically characterized by fixed prices and uncertain demand for a perishable product.
I think the Newsboy Model can be directly applied to Talent Pooling.
Talent Pooling is always a hot topic, especially for Recruitment Process Outsourcing (RPO) organisations. Conceptually talent pools are simple, yet in reality, are rarely successful.
The few successful examples I’ve seen, have been for high volume roles, and usually within a contained geographical area. To coin a new phrase, I see these as ‘Fast Moving Talent Pools’ (FMTP). Explaining the success of FMTPs is simple.
- Demand is either constant or well defined
- Supply of the ‘perishable product’ (available talent) usually meets demand
In contrast, the talent pools I’ve seen fail, are typically for non-volume roles, and less constrained by geography. These are what I call ‘Slow Moving Talent Pools’ (SMTP), and explaining why they fail is equally simple:
- Demand is usually uncertain or unknown
- Supply of the ‘perishable product’ (available talent) rarely meets demand
Based on my experience, the key to successful Talent Pooling is understanding “demand”, yet the majority of effort I see expended is on “sourcing”.
I also think this focus is simple thing to explain—it’s just harder to understand demand and gain forecasts, than it is to understand the next big sourcing channel and simply apply it to pooling for talent that has traditionally had a high time to fill (the most typical measure used to point to a role being “hard to fill”)—regardless of understanding likely demand.
So how does the Newsboy Model apply?
The Newsboy Model was developed to help predict demand for perishable products (such as newspapers), to enable a vendor to stack its shelves to meet demand and reduce waste.
In Talent Acquisition, the perishable product is ‘candidate availability’ (the window of time a suitable candidate is available), and Talent Pools are our ‘shelves’. The unknown is usually ‘demand’, yet it’s the key to success.
With the rise and rise of econometric approaches in Talent Acquisition (made possible through increasingly sophisticated data sets), its highly likely the organisation you recruit for already has all the data needed to implement the Newsboy Model, to produce demand forecast predictions to help drive improved results for SMTPs, including reduced waste and cost.
To learn more about Single Period inventory models, search Google for "Newsvendor Model" or "Newsboy Model".
Let me know your thoughts, could this approach help you?
Language in this article switching from "available talent" to terminology "perishable product" for human beings had me questioning what I was reading, The model is definitely interesting but I couldn't get past the tone which was reminding me of the the Sci Fi "Cloud atlas" where particular classes of less than humans are refereed to as "manufactured" and therefor diminished for 19 hr day servitude. Bring some humanity into the math.
Global HUB Leadership | Shared Services Centres | Centre of Excellence (COE) | Enabling Functions | People Operations
8 年Spot on Paul! This is exactly what we try and influence our clients on to merely pipeline instead of SMTP and define higher volume, business critical roles to talent pool (FMTP). The only place I see fit for SMTP is for high demand roles that are always in low supply, like pharmaceutical roles which require a medical degree (like a Medical Director). Although these roles rarely come up, simply going to market when they do or looking in your predefined talent pipelines is not a successful strategy. These SMTP allow you to build credibility and an employer brand with candidates who rarely move giving you the best chance of success when these hard to fill role do become available, essentially giving you warm leads to tap into when the time arises.
Leadership | Ironist | Misbehaviourist
8 年Interesting model, Paul. I do, however, have one reservation. As you'll see, it's quite a big one. The moment a model starts to use terms such as "perishable product", "waste" and "shelves" to describe human activity, it is dehumanising. People are far, far more than groceries to be packed and stored on supermarket shelves. Any model using language that describes them in such ways risks unfortunate to terrible consequences. So, while the concept may be useful, I think the linguistic execution would be harmful. As it currently stands anyway.
Senior Info/Data Management Professional - Experienced Senior Leader in multiple Data Management disciplines - Data Strategy | Data Governance | Data Protection | Data Privacy
8 年Interesting when I mentally apply this to the IT industry and the desire to go Agile or DevOps whereby the number of resources, in this case people, is difficult to predict and is constantly fluid. SMTP as you call them will be burdensome for the talent supplier if they need to maintain the talent pool but no projects to put them on. A byproduct of these two IT approaches results in companies having to maintain the talent pools themselves and play funny money between projects to have these people capitalized whilst effectively doing operational activities. Waterfall tried to solve this problem, agile and DevOps don't talk about it, but I'm sure more thought inspiring articles like this will start the conversation. Thanks Paul.