Article: Workforce Analytics Key to Corporate Profitability

Technology

Workforce Analytics Key to Corporate Profitability

Workforce Analytics enables the HR to play a strategic role in achieving corporate profitability providing insights to drive growth, says Dick Cahill, VP & GM International, Kronos Incorporated
 

If HR is able to align workforce performance data with business objectives, they can provide the insights needed to drive anticipated margins and associated profitability

 

Workforce analytics can answer critical questions for an organization facing lower productivity

 

Workforce Analytics enables the HR to play a strategic role in achieving corporate profitability providing insights to drive growth, says Dick Cahill, VP & GM International, Kronos Incorporated

What is the strategic value of your time, attendance, leave, schedule data? Is your organization sitting on a gold mine of untapped workforce performance information that could deliver huge performance improvements without dramatically disrupting your workplace?
It is a truth universally acknowledged that HR plays a critical role in the success of a company. After all, labour represents a significant cost for every firm. And, given the right tools, HR is in the best position to develop an understanding and provide the input to maximize the value of this investment.

Providing a deeper understanding
If HR is able to align workforce performance data with business objectives, they can provide the insights needed to drive anticipated margins and associated profitability. Consider the following examples from the worlds of manufacturing and retail that show how HR can drive strategic value:

A manufacturing company found that its third shift was producing lower quality goods than other shifts. After ruling out mechanical issues, the company analyzed the workforce analytics data and realized that the root cause may be that there is no senior supervisor on that shift. By matching payroll and production data, the company identified the problem and enhanced operational efficiency.
Customer conversion rates in a sporting goods department were consistently lower than the average, prompting a store visit by the Director. The Director discovered that the store was not adequately staffed to meet customer demands at peak hours, leading to customer abandonment. By aligning customer data with payroll data, the Director gained the insights needed to adjust staff schedules to store traffic, leading to higher conversion rates.

Failing to interpret the results
These examples make a compelling case for deploying a workforce analytics solution because they illustrate how connecting labour to volume and workforce performance to business performance can have such a profound impact on the success of the organization. Unfortunately, many organizations have yet to understand the significance of workforce analytics solution.
Investing in workforce analytics certainly takes a serious commitment but it is well worth the effort because the insight it provides can result in a sustainable competitive advantage. Workforce analytic tools would help you accomplish the following four challenges:

Align labour to volume
A workforce analytics solution enables the organization to combine business performance data with workforce performance data by compiling information from across multiple systems into a data set that can enable detailed comparisons, trends, and root cause analysis.

Expand measurements of workforce performance
Workforce analytics provide organizations with extensive means to assess workforce performance, including labour cost as a percentage of sales; hours per patient day; overall labour effectiveness; budgeted labour cost, et al. It also enables the company to establish KPIs, empowering it to find unique ways to measure, monitor, and improve workforce performance across dimensions. For instance, an HR professional providing a production manager with the labour cost contribution to margin for Product A as compared to Product B for Week 41 this year, compared to Week 41 last year.

Identify root causes of performance issues
Workforce analytics enable the organization to take the combined set of data and gain the insight to identify root causes of performance issues and establish appropriate corrective actions. For instance, workforce analytics can answer critical questions for an organization facing lower productivity, such as ‘Are enough workers scheduled?’, ‘Are the current workers appropriately trained?’, ‘Will volume increase in this period?’, et al. Using this, managers can determine appropriate corrective action versus relying on anecdotal evidence or experience.

Monitor performance
Workforce analytics enable the organization to use KPIs for setting thresholds for organizational performance and managing those thresholds. Organizations can configure dashboards showing that KPIs are most important for effective management of a line of business, providing managers with immediate visibility to performance (cost, output, quality, et al) failing to meet expectations.

HR positioned to play a strategic role
Clearly, when HR uses workforce analytics, it makes an organization incredibly nimble with the ability to preemptively address workforce performance issues before they have a negative impact on results. This represents a huge competitive advantage!
 

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Topics: Technology, Performance Management

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