Structures, water, computers, languages and people (not necessarily in this order)

Dynamics resources for Human Resources managers

Social systems are more difficult to understand than common engineering systems. Although the NASA would never send a space ship to the moon without first testing prototype models and making lots of computer simulations, HR managers still prefear to use intuition, limited mental reasoning, assumptions, etc...

In one of my assignments in the IT engineering course at the Spanish Open University I wanted to use the knowledge of system dynamics to simulate recruitment strategies in a common consultancy office. The image below shows the basic elements of a system dynamics loop: levels (state variables or integrals), flows (rates or derivatives) and information.
And this is the full model of the company in VenSim. Click on the pic to enlarge.
Two main policies are compared here,

  • In dark red: People are recruited based on the people that goes out of the enterprise (man out, man in) and the evolution of projects (this is, depending on the ratio between sales and production).
  • In blue: People are hired based on the evolution of projects that need to be developed and taking into account the productivity of the manpower.
A continuous growth of the sales was supposed for fifteen years of simulation.

As you can see from the figures above, the amplitude of the oscillations in the junior consultant population are always bigger than in the senior people (juniors always pay the bill!). The first strategy (recruitment based on production information) is the most usual and it behaves quite well in the beginning but dramatic delays appear after a couple of years; the second strategy (recruitment based on orders information) requires an investment period to train fresh graduates but gives better results after four years. Any resemblance to reality is pure coincidence.


  1. So what does the last figure mean? If it represents profits, then the figure indicates that the strategy that produces the most project orders (the red line) yields a smaller profit, which in principle sounds rather counterintuitive.

  2. Oh, are the "project orders" the orders that are pending to be completed?

  3. Yes, you are right. Project orders box represents the value of the pending tasks (Spanish: cartera de proyectos). In maths language
    Sales - Production = d(Project Orders)/dt

    Maybe I should have used "pending projects" instead of "project orders".

    The red strategy is greedy and it implies delays. This is the reason why the stock of projects is bigger .

    If you are interested, the equations used were

    Dark red strategy:

    Recruitment Rate= (Sales/Production)*SMOOTH(Juniors Out+Seniors Out,Adjustment time)

    Blue strategy:

    Recruitment Rate =(Project Orders/((Max Production*Adjustment Time)/(Junior Resources+(Senior Productivity/Junior Productivity)
    *Senior Resources))-(Junior Resources+(Senior Productivity/Junior Productivity)*Senior Resources))/Adjustment Time)

  4. Makes sense now, thanks!

    PS: It was fun that the link brought me to such a familiar place =)