Workforce Analytics: the Key to Improving Business Results
How the evolution of HR into an analytically driven profession has made way for workforce analytics.
In the past three decades, HR has evolved into an analytically driven profession with people at the core. Technology has amplified what once used to be a back-office task. It has put HR at the fore front of not only collecting data and analyzing insights but also predicting business trends. With time HR leaders have upgraded themselves to understand the language of the business. According to a recent CIPD report talent accounts for 80 per cent of the business value. So, business leaders are not expecting more than just a headcount report from HR executives. This informs us the need to understand workforce analytics and how it can be used to improve business results.
What is Workforce Analytics
Talent has never been more critical to business performance than today. Organizations now have the need to comprehend with precision what it takes to recruit, retain and motivate their workforce. Until recently, most businesses based their strategic workforce decisions purely on hunches and intuitions, setting them up for future disappointments. The introduction of workforce analytics has brought insights by introducing a more data-driven approach to strategic decision making. Workforce analytics offers a systematic process to drive business decisions about people. The book 'Power of People' defines workforce analytics as the discovery, interpretation and communication of meaningful patters in workforce-related data to inform decision making and improve performance. This definition brings attention towards the fact that workforce analytics cuts across the business and encompasses a data-driven solution for HR leaders to gain insights into the whole business. However, for this to succeed, there is a strong need to encompass a data-driven culture at the organization level.
Workforce Analytics - A journey, not a destination
Even before we begin to encompass a data-driven culture, it is important to understand that the field of workforce analytics is typically new and is still evolving. So, it is safe to say that the terms HR analytics, talent analytics, people analytics and workforce analytics are often used as synonyms referring to statistical analysis of employee data. However, each of the terms has different connotations when addressed. HR analytics is usually used among HR consultants that address challenges to clients in the HR departments and thus creates an aura of confinement from the overall business. Whereas, workforce analytics addresses the overal business. Thus, capturing insights from employee performance data from areas such as marketing, logistics, accounting and presenting its overall business impact. It is therefore important for organizations to first develop a culture of trust by openly sharing employee performance data and insights readily across the business, building on a progressive data culture.
Workforce Analytics - Moving forward
- For HR to evolve into a data-driven function, it must counter the following: It's ability to gathering and connect relevant workforce and performance data.
- Select a relevant analytics software that can integrate the whole organization.
- Develop expertise to analyze the mounds of workforce data available.
Unfortunately, the variety of HR software solutions available primarily focus on what has already happened rather than what will happen; and are disparate from workforce data across multiple, disconnected systems. This is usually depicted via ad-hoc and rigid reporting dashboards that such software encompass, enabling HR professionals to only use data reactively rather than proactively. Such systems are unable to integrate workforce data from the whole organization. Therefore, most of the time of HR professionals is spent on manually downloading this data and processing spreadsheets into individual reports. Each department submits its own report and predicts the fate of the workforce without integrating the multitude of this data into one whole system. What we need now is a workforce analytics software solution that can integrate all this data from disparate systems and present it in a simplified and meaningful manner. This will enable every department to align their workforce with the business objectives and ultimately improve organizational performance.
Today CEOs, CFOs and CHROs alike understand that data-driven tools are essential to improve decisions about talent, such as tools that can provide insights into revenue and profits. Therefore, corporate leaders and boards are now embracing workforce analytics as a strategic tools that can directly impact financial results. It is estimated that within the next two years, 57 per cent of all business will employ workforce analytics using data integrated across multiple systems. The challenge now for business leaders is to select the right analytical tool that can integrate all the magnitude of workforce data and provide meaningful explanations. Thus enabling them to make strategic workforce decisions and ultimately improve business performance. As, without a clear insight, accurate workforce decisions will always be at risk.
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