The Origins of
Workforce Planning

James W. Walker

AS EARLY AS 1890, in Principles of Economics, economist Alfred Marshall was calling for the analysis and planning for labor needs in organizations. As a founder of neoclassic economics, he brought supply and demand, marginal utility, and costs of production into a coherent whole.

However, while I was conducting research as a graduate student in the 1960s, I found few advances in research or practice in what was then called manpower planning over the decades that followed the publication of Marshall’s book. Military organizations, defense contractors, and oil companies managed their high talent staffing rigorously, but most business organizations focused on their talent requirements in a limited way (e.g., management replacement planning, short-term recruitment needs forecasting, productivity analysis driving staffing requirements). Few academicians were interested.

I was drawn to the subject through my consulting-research relationship with American Oil Company (Amoco) from 1966 to 1969. I worked with the company’s organization and manpower development division on a series of projects. What fascinated me most was the company’s desire to implement more effective, more creative manpower planning and development processes.

EARLY STATE OF THE ART

While an assistant professor at Indiana University, I focused on manpower planning. I wrote a series of articles and papers, which in turn opened new doors to corporations for research. In 1969, I authored an article in the Harvard Business Review entitled “Forecasting Manpower Needs,” in which I described steps that researchers had taken toward improved models for manpower forecasting and planning, and made a call for advances. I wrote, “Although many managers are trying to do something about manpower planning, few of them are talking about it.”

The article aimed to increase awareness of research and practices at the time, when—of course—forecasts had to be created on mainframe computers. Models typically relied upon historical data, but some experimented with simulations where more realistic parameters could be used. Also, models focused on particular organizational units or functions where greater specificity was possible. Examples were described that:

Created projections of manpower needs for a company for each of ten years in the future (a manufacturing company)

Focused on particular questions such as recruiting needs (State Farm Insurance, Schaefer Brewing)

Projected talent requirements taking into account productivity patterns (Professor Eric Vetter)

At American Oil and many other companies at the time, manpower plans were limited to staffing levels and costs, projected in three-year rolling plans, with adjustments each year. Longer-term business plans focused on financials and capital requirements.

On the supply side, I wrote that “computers have come of age.” The Air Force, Army, and Navy all were using “automated personnel data systems” for planning, assignments, and development. These were large systems tracking demographics, assignments, training, and other variables, as well as analysis of retention, progression, and cost-effectiveness of alternative staffing patterns. Because of the large scale and unique characteristics, these models did not transfer easily to the private sector. Aerospace companies were among those that designed systems along the same principles. AT&T developed its famed Interactive Flow Simulator (IFS), which permitted analysis of movement and an ability to guide future planning for its million-plus employee base. In many companies, modeling was spurred by affirmative action planning needs.

In the article, I also discussed replacement and succession plans—essentially plans for the top talent segment of an organization. I called for more emphasis on succession planning in order to facilitate development planning for individuals rather than merely naming replacements for specific managerial positions. An example given was a leadership program at Xerox covering 1,200 employees with a focus on a top talent subset of fifty with executive potential.

EARLY RESEARCH AND PRACTICES

In 1967, Eric Vetter, professor at Tulane University, published Manpower Planning for High Talent Personnel, the first book-length discussion of manpower planning techniques for business organizations. He reported the results of his doctoral dissertation research, surveying practices in a variety of companies, many of them aerospace and engineering-focused organizations. Vetter identified four steps in a process of manpower planning: (1) data collection and analysis resulting in manpower inventories and forecasts, (2) determination of goals and problem solutions, (3) implementation of plans and programs, and (4) program control and evaluation.

Once I moved to San Diego in 1969, I learned more about industry practices as a guest at meetings of the Southern California Aerospace Manpower Council, an informal consortium of the major organizations including McDonnell Douglas, Lockheed, North American Rockwell, TRW Systems Group, and the Jet Propulsion Laboratory. Some of those in the council represented the personnel function; others were from program planning functions with workforce planning responsibilities. For example, Rockwell’s B-1 bomber program required complex manpower plans with different skills moving onto and off the program

In 1972, Elmer H. Burack and I edited a book, Manpower Planning and Programming, that contained thirty-two reprinted articles and original papers on manpower forecasting and models, information systems, and programming, with authors from GE, Standard Oil Indiana, North American Rockwell, TRW, Inland Steel, McKinsey, and such universities as Harvard, MIT, the University of Minnesota, and schools in the United Kingdom.

A year before the book appeared, I had joined Towers Perrin as practice leader of the firm’s manpower planning and development practice. We conducted surveys on manpower planning practices and worked to advance the state of the art and practice. Some of the more interesting projects included development of:

Early processes for defining and addressing the human resources implications of business unit plans, including staffing gaps and changes required for business success.

A quantitative process for optimizing officer staffing in a major bank, within retail, corporate, international, and other divisions. It featured a sophisticated process of matching time devoted to particular activities and related results achieved, yielding guidelines for deploying officer talent to achieve business outcomes.

An occupational taxonomy in a forest products company to provide a relevant framework for manpower forecasting and planning and for facilitating deployment of talent among jobs within families with similar characteristics. This is a precursor to today’s workforce segmentation initiatives.

A process in a pharmaceutical company requiring unit-by-unit planning of staffing levels based on managers’ estimates of time devoted by staff and its relation to business outcomes (past and desired future).

Rationalization of staffing in each and every division of a major international development bank, entailing detailed self-reporting of time allocation to functional tasks and unit-level analysis justification of proposed future staffing based on the findings related to unit mission/objectives.

Not all of these approaches evolved into practices common in business organizations, but they addressed the organizations’ needs and often introduced new approaches to the challenges posed.

ORIGINS OF THE HUMAN RESOURCE PLANNING SOCIETY

By 1976, a few colleagues and I thought it would be fruitful to formalize a network of professionals in academia, business, and government to share experiences and insights on the subject and, more specifically, to host an annual conference, conduct workshops, and publish a journal. These colleagues were from such companies as Weyerhaeuser, Bankers Trust, International Paper, J.C. Penney, Mobil Oil, General Motors, Lockheed, Gulf Oil, and AT&T; academicians who had contributed to the subject area; and leaders of the Manpower Analysis and Planning Society (MAPS) in Washington, D.C., a group of federal agency representatives doing manpower planning. Following a charter conference in 1978 in Atlanta (attracting 225 attendees), the Human Resource Planning Society (HRPS) became a prominent “niche” organization appealing to the more “strategic thinkers” in the human resources profession. “Human resources” and “workforce” replaced “manpower” or “personnel” as the preferred terms of reference. Recently, HRPS redefined what its letters mean, becoming HR People & Strategy. The world turns.

HR PLANNING AND STRATEGY

In 1980, McGraw-Hill published my textbook Human Resource Planning. The second edition was renamed Human Resource Strategy to reflect the increasing emphasis on alignment with business strategy and priorities.

In the 1980s, we experienced a variety of emphases, including environmental scanning, benchmarking/best practice surveys, career (and career path) planning, succession planning (“executive workforce planning”), and metrics (which moved to center stage for a number of years). At the high talent level, companies emulated the General Electric (Jack Welch) practice of planning by sorting employees into ABC categories and focusing attention on the persons with the highest performance and potential. McKinsey declared a war for talent and pressed for more diligent talent management by employers.

With the advancing of computer applications, more sophisticated and more customized forecasting and planning became common. Tom Bechet, my colleague at Towers Perrin and later a partner in The Walker Group, worked with many companies in developing forecasting models within organizations. He championed a focus on issues that models need to address rather than large-scale, broad-based approaches. He championed simple desktop spreadsheet applications, using data downloaded from mainframe systems.

HRPS invested funds in sponsored research for many years and hosted an annual research consortium each summer, with research papers presented by both academicians and practitioners. They were fruitful and enjoyable networking events. My colleague Karl Price edited the papers for publication as a book each year. This helped engage academicians and encouraged research in the field. Also, HRPS published many journal articles and a book on manpower planning (edited by Tom Bechet, Rob Tripp, and Dan Ward).

REFLECTIONS

In a field where the primary professional association in the 1960s was the American Society of Personnel Administration, our endeavors were strikingly different from the norm. During these early years, large companies created staff positions to create and lead the planning efforts—within HR or elsewhere (sales, finance, manufacturing). Human resource planning was an emerging professional niche. Over time, however, responsibility for planning shifted to unit line and HR executives, enabled by new online analytic tools and databases and supported (even nudged) by staff or consultants.

One thing I’ve learned, however, is that best practices rarely stick. All too often, new generations of talent rediscover human resource planning and reinvent tools to meet their particular needs. As a consultant, I worked with some companies several times in my career, each time with different clients on the team. When organizations restructure or merge with others, past practices or systems often do not survive, and needs are perceived to be new and different. Nearly half of the many companies I consulted for over the decades no longer exist today (e.g., Gulf Oil, Digital Equipment, Texaco, Manufacturers Hanover) or have the same names but are entirely different entities with new management (e.g., IBM, AT&T, John Hancock, Chase).

Such organizational change, together with new generations in management, helps stimulate consideration of new, better approaches and innovation. However, progress is uneven. Consulting firms and software vendors help provide continuity and gradually advance the state of the art and practice. However, they often keep their approaches proprietary, making it difficult to build the professional body of knowledge and, in turn, peer evaluation and improvement. Their clients instead are more prone to sharing their experience and knowledge in their own forums and interest groups. Knowledge is shared more through networking and less through the seminars, conferences, and publications relied on in the early years.

My good fortune was being invited to work with American Oil long ago, and I embraced a field just waiting to develop. Those early years and decades following were very exciting.

James W. Walker is a consultant, speaker, and author on human resource strategy and contemporary workforce management issues. Jim and his colleagues worked together for fifteen years as The Walker Group, a management consulting firm based in Phoenix and later in San Diego. Before that, for fifteen years, he was a vice president and director of the human resources consulting practice at Towers Perrin, based in New York, for fifteen years.

Jim is author of the award-winning text Human Resource Planning, regarded as seminal in the field of strategic human resources management. He is an author or editor of nine other books and many professional articles. He was founder of the Human Resource Planning Society and has been active in many professional activities. His most recent book is Work Wanted, a book on the choices that baby boomer professionals and managers face as they challenge myths of aging, work, and retirement (2009).

He earned a B.S. in accounting from Millikin University, then an M.A. in labor and management and a Ph.D. in business administration from The University of Iowa. Upon graduation, Jim was an assistant professor of management at Indiana University and San Diego State University. From 1979 to 1981, on leave from Towers Perrin, he was associate professor of management at Arizona State University.

Jim currently lives in La Jolla, California, and enjoys occasional consulting and speaking, tempered with local community activities. He is president of 939 Coast Management Association, a role that challenges the best skills he acquired in his many years of consulting. He welcomes contacts at [email protected], Facebook, or Linkedin.