Maximising profitability of quaternary sector organisations through workforce optimisation

Abstract

Purpose – The purpose of this paper is to develop a workforce optimisation model that maximises the profitability of a knowledge-based service organisation in the quaternary sector. Design/methodology/approach – An optimisation model that allocates resources from different skillsets and seniority to projects that are delivered from several geographies has been developed in this paper. With the objective of maximising the profitability of a pipeline of projects, the model selects which projects to accept and which not to and indicates how many resources to hire for (or layoff from) each skillset-seniority-geography combination. Findings – The paper discusses the model and its scalable nature. Through hypothetical scenarios, it is shown that the model, using a simple non-linear algorithm, converges to optimal solutions. Research limitations/implications – The model depends on inputs that are exogenously supplied by the organisation. The applicability of the outcome is dependent on them. However, on the other hand, it allows for the alignment of the outcomes with the strategic objective of the organisation. Practical implications – The paper discusses the multi-dimensional nature of effective human resource allocation problem. It not only maximises profitability but also allows organisations to strategically screen projects. With proper calibration and minor modifications, the model may be used to allocate resources across the knowledge-based industry. Originality/value – The paper integrates the demand and supply-side problems of workforce allocation to projects in a novel way to form a tractable model that is pragmatic and applicable.