In April of 1860, the Pony Express made its first delivery from St. Joseph,
MO to San Francisco, CA. It took ten days to make the trip and cost $5—in
current day dollars more than $225—to mail half an ounce. More than 115 years
later, a series of deregulations allowed private carriers to ship packages by
air and for the first time deliver them to and from all of the 48 contiguous
states. In 1981, FedEx introduced Overnight Letters throughout the U.S. and in
1985 UPS followed suite with its Next Day Air service.
This new speed of delivery came about at the same time as Toyota Motor
Company’s new supply chain philosophy was coming to the attention of Western
manufacturers. Just-in-Time supply chains eliminated waste by only receiving the
product that was immediately needed, saving warehousing costs and other waste
related to buying product before it was needed. Reliable express shipping was
critical to keep Just-in-Time systems working though since one critical shipment
being a day late could bring an assembly line to a standstill and defeat all of
the process’s benefits.
Reducing waste is an ongoing battle in every organization. In the past
several years, reducing human capital costs specifically has gotten a renewed
level of scrutiny. The recession prompted many organizations to move once manual
tasks into automated systems providing long-term cost savings. Other
organizations added more contract staffing to their employee mix adding
flexibility and reduced scaling costs. Still other organizations have taken
another tack and whether consciously or only in effect, have moved their
staffing strategies to a Just-in-Time philosophy.
“In this economy, companies continue to focus on cost containment, and one of
the easiest way to keep costs low is to leave vacant positions unfilled and
limit the creation of new positions until there is no other option,” says Rob
Romaine, president of
MRINetwork. “They feel that they are
saving money as long as these positions are left open. But, when the need is
truly urgent, there is no overnight option.”
In February, there were 3.9 million job openings in the U.S., the highest
number openings since May 2008, but in March only 88,000 new jobs were filled.
Whereas it is easy to predict when a part or component will arrive—all
package carriers today have detailed tracking features—when a new vice president
of sales or director of operations will be hired, on boarded, and begin
operating at full speed is a much looser science.
“Working with an industry expert recruiter will both reduce the time to hire
and help find people who will be up to full speed faster. But, that time is
still at minimum several weeks and potentially several months,” says Romaine.
“If the employee is already needed, those weeks and months are going to turn
into a time when either customers are underserved, existing staff is overworked,
or both, which costs far more than is saved.”
The shift is that employers by and large stopped looking at their business
and their pipelines to project the need for more staff several months down the
line. Instead they wait until the growth has already materialized to hire the
staff needed to service that growth. Deciding in May that more staff will be
needed in August creates enough time for top candidates to be recruited and
onboarded before the additional capacity is needed.
“Using solutions like contract staffing adds agility to workforce management
and we have seen it being used increasingly in recent years,” notes Romaine.
“But workforce planning isn’t a short term endeavor. In the big picture, hiring
someone a few weeks or even months before they are needed is a small price to
pay to ensure you have the talent when you need it. Business leaders need to be
able act on what they see on the horizon even when they know their vision isn’t
perfect."
