For far too long, HR has been viewed as a monitoring and reporting function. While HR professionals continue to look for ways to become ‘strategic,’ they have a great tool to enable the transition―workforce analytics. Workforce analytics piece together one critical component of business decision-enablement― information!

The Need for Business-Inflecting Information

Many challenges hinder HR professionals to perform like true strategic partners to the business. The first and foremost challenge that HR professionals face is the lack of real-time operational view of the business. HR lacks the tools necessary to understand the true pulse of people on the ground. Most of the traditional tools available to HR fail to provide active intelligence on the issues and challenges that people encounter. As a result, most organizations grapple with undesirable attrition that stems from factors that arise more out of internal inefficiencies rather than external market pulls. Traditional macro-level workforce metrics fail to capture differences between different operational constituencies within the business. Absence of advanced analytics results in HR failing to capture critical insights on how to attract, engage, and retain talent in the organization. Another key issue for HR professionals is the absence of organizational mechanisms for increasing process efficiency. While it is important for the different components of a process to collectively function effectively, oftentimes the lack of a consolidated view hinders efficiency. Additionally, HR professionals also lack mechanisms to collect useful data for increasing efficiency and improving productivity.

The Complexity of Information Gathering

Executing against a plan targeted to achieve greater efficiencies starts with planning to place the right people, at the right place at the right time. Planning based on best-fit decisions by relying on historical data is proving ineffective with increasing complexity of business operations. The workforce is getting more and more diverse owing to various elements―gender, age, and ethnicity. To augment the complexity of diversity, product lifecycles are shrinking rapidly. Additionally, the rapidly changing nature of consumer habits makes tracking and analysis of consumer behavior complex and challenging. While this puts added pressure on modern-day businesses to alter course and business direction, an organization cannot react to these changing business demands without accounting for the people residing within. Without proper information around how these changes will affect the different segments within the workforce it becomes difficult for an organization to align business operations rapidly and efficiently in response to market demands.

HR’s Need for High Quality Information

To meet the dynamic and challenging needs of the market, the business needs to upgrade workforce skills to realign with the product and service expectations of consumers. This is necessary because the measures of business success continue to evolve and along with them, the KPIs and productivity expectations of the workforce. Without adequate workforce planning, it is impossible to achieve incremental performance improvements. Skill upgrade is not just a function of hiring the right talent at the right place; it is also about hiring at the right time. For example, despite an organization achieving the industry standard resource baselines, service standards can still be undesirable. A senior executive in the healthcare industry remarks, ‘in our industry, doctors, nurses, paramedical staff make up almost 60-70% of our workforce. In order to have service excellence, the industry standard ratio of nurses to beds is approximately 1:3 or 1:4. Though there are a huge number of colleges which are churning out nurses to join the hospitals the fact is that to get a nurse as a readymade product to be in the hospital and to be in charge of the patient takes as good as 7 months to 1 year to be fully ready for the job. What comes out from the college is a product which we cannot fit near the patient; it leads to too many other complications and too many other issues. Without adequate workforce planning, that ensures an adequate supply of service-ready personnel at any point of time, it will be impossible for us to maintain our reputation in the market,’ HR has an important role to play in planning the optimal organizational workforce through inventive and new analysis techniques.

Workforce Analytics―The Key to Organizational Performance

Oftentimes the key to making good business decisions relies on good information. More and more HR professionals are turning toward workforce analytics tools to gain insights on workforce metrics that traditional systems fail to capture. Workforce analytics provide HR professionals with the tools to enable four key organizational decisions― recruitment forecasting, compensation rationalization, skill prediction and forecasting, and role and talent alignment. To inflect critical decisions workforce analytics sources enterprise information from different management information and enterprise resource planning systems to identify key trends in engagement, compensation, and skills. It allows predictive analysis of future business situations and simulates the operational and resource requirements based on them. This enables decision-makers to view and forecast current and future workforce plans and adjust their talent management strategy accordingly.

With business conditions demanding greater involvement, HR professionals need to move away from the reactive logging and reporting mindset toward truly contributing to building business capabilities. Workforce analytics provide the ideal platform to prepare HR to truly contribute toward business for the future.