Talent has become a scarce commodity and organizations are now applying analytics to understand their employees better. The essence of effective analytics in any segment of an organization is the distillation of dizzying amounts of data into actionable information. An effective analytics system must act as the conduit to information that is otherwise hidden from view. Workforce analytics makes the data-driven decision making possible and moves businesses beyond guesswork, intuition, and ad-hoc spreadsheets.
Market demand for workforce analytics is on the rise as business leaders increasingly recognize that the right talent is critical to bringing business strategies to life. Equally important is the ability to access and analyse the right information to support talent-related business decisions. For delivering analytics that provides right insights at the right time, companies have started to recognize that there is need to the end in mind while designing any analytical framework. Workforce analytics has aided the HR industry in four broad aspects.
Workforce analytics to unlock the hidden patterns of employee behaviour
Historically, IT has had access to business data and HR relied on them to create workforce reports. But as HR technology has advanced, workforce analytics tools have become increasingly easy to use. These tools deliver actionable insights about the flow of talent into, through and out of organizations over time, to help organizations make informed decisions about how to better manage its people and evolve its culture. With the power of new technology, business leaders can now easily analyse the business impact of most HR processes, including sourcing and selection, recruitment, on boarding and training, career development, leadership development, supervision, performance measurement and management, recognition and rewards.
Talent data helps accelerating the business impact of analytics efforts
As companies navigate today’s dynamic economy, many have only a partial understanding of their current and future workforce needs. Too often, the data required for people analytics is found in a range of workforce systems, from various HR systems that address recruiting, compensation, performance and learning to those that are geared towards sales and operations. And, because organizations struggle to integrate data from these disparate sources, they are slow to move from tracking basic transactional data to turning that big data into actionable intelligence that can drive strategic decisions.
To be truly valuable to the business, HR data should be combined with business performance data to generate trends and correlations that push towards the ‘why’ rather than the ‘what’. Once the organizations begin to answer the ‘why’ and ‘how’ questions, they should start focusing on deploying and maintaining predictive analytic solutions into their reporting dashboards to better prepare business leaders for rapidly-evolving business challenges.
Identifying and Measuring Right Metrics to Provide Strategic Impact
Analytics enable HR professionals to analyse, interpret, and make the best possible decisions and recommendations based on workforce data. This ability to inform and optimize workforce decisions can enable HR professionals to develop business cases and assess trade-offs in much the same way as their colleagues in other functional areas.
The first thing an organization must do is determine what workforce-related problems it needs to solve and how addressing those workforce challenges will impact organizational effectiveness. During this phase, organizations should ask questions such as:
- Does my organization have a sufficient number of individuals with the right skills to support a new product launch?
- What training interventions would be most useful to increase the productivity of my offshore contact center?
- Which recruiting channels are providing me with the most effective sales leaders after three years at the organization?
- What are the factors that differentiate higher-performing managers in my most productive branches?
- What percentage of my engineering workforce is eligible for retirement in the next three years, and what is the propensity of eligible engineers to actually retire?
- Without clearly identifying problems that have a direct impact on business performance, organizations run the risk of investing time and energy in areas that are not a priority.
The purpose of measuring any business process is to obtain actionable information for improvement. Key Performance Indicators (KPIs) offer a measure of the performance of your business. The following are common KPIs covering talent management:
- Overall talent retention rate
- Cost to hire talent
- Time it takes to hire talent
- Average tenure of new hires
- Time to full productivity per full-time employee
- Revenue per full-time employee
- Impact of voluntary and involuntary employee loss rates on revenue
- Diversity statistics
- Number of senior positions and the depth of bench strength
Making decisions with strategic workforce analytics
Analytics represents the discipline of correlating and analysing large quantities of data that may originate from diverse and divergent locations, in order to identify trends and opportunities for innovation and mission critical strategic improvement. In other words, with strategic workforce analytics, leading organizations can create causal relationships between the efforts they make toward objectives and the results they produce.
With the right analytics technology, you can know that you are up to the task and ready to deliver. Organizations that implement an analytics platform which can provide actionable information that influences the effectiveness of decision making and operations are the ones that address challenges effectively and stay ahead of the competition by making most of the latest industry innovations.
The use of analytics has been seen most in retail industry to learn and understand the purchase history data and predict a customer’s buying behaviour based on trend observed. In addition to retail industry, predictive methods are often seen in marketing, finance, and logistics. The need for analytics has transformed. The adoption of analytics has started gaining significance also in HR departments to attain a sustainable competitive advantage for their organizations. The use of these advanced methods for workforce analytics can influence talent selection, sourcing, training, development, planning and optimization. The intersection of data and human behaviour has enabled better decision making. This has built a strong case for HR professionals to adapt new workforce analytical tools.