Workforce analytics — HR’s strategic asset
In its Global Human Capital Trends 2016 report, Deloitte remarked: “As technology makes data-driven HR decision-making a possibility, 77 percent of executives now rate people analytics as a key priority.” Interest in workforce analytics is accelerating rapidly as more companies acknowledge the vital importance of human talent and its link to productivity, profitability, and top organizational performance.
Research has shown that top-performing organizations are three times more likely to be sophisticated users of analytics in human capital management than lower performing organizations. According to Forbes, more than 60% of companies are investing in Big Data and analytics tools to help advance the data-driven culture within their HR departments.
Workforce analytics is real-time data and not guesswork. With a data-driven view of the organization and its workforce, decision makers no longer have to rely on gut-feel or intuition.
More and more businesses recognize the need for data in all aspects of HR. Dr. Jac Fitz-enz emphasizes the five most important things to measure: mission-critical turnover — who is leaving and what is it costing; the cost of staff to generate the organization’s revenue; learning and development costs; engagement and how it and other performance indicators are tied to productivity; and employees' view of leadership.
Workforce analytics helps leaders understand the root cause of issues and what needs to be addressed: for example, why overtime is happening and how it can be stopped; where the talent gaps are; what particular skills and capabilities the organization needs to get the work done; what is causing absenteeism; and what percentage of the workforce has a defined career path. All of this can be directly informed by people analytics.
HR has to be a strategic asset. It must provide management with insightful evidence to improve business performance. By applying workforce analytics, HR can generate the intelligence the business needs to manage the workforce to support the organization’s strategic goals.
A McKinsey study found that organizations that adopt data analytics generate 5 to 6% higher productivity and profitability. Yet, compared to such functions as finance and supply-chain management, organizations have been slower to apply the same rigor to workforce analytics as a critical asset and embedding it into the fabric of the company.
With a defined human capital strategy and advanced metrics to measure success, organizations can build a lean and highly productive workforce that is prepared to quickly outperform competitors. In the Society of Human Resource Management’s (SHRM) June 2016 report on the Use of Workforce Analytics for Competitive Advantage, Mark Schmit, Ph.D., SHRM-SCP, executive director of the SHRM Foundation commented, “Workforce analytics are transforming human capital strategy. That’s why it’s more important than ever for employers to understand how analytics and data will drive recruiting and hiring decisions.”
HR and other key divisions have the same corporate strategy — achieving a competitive advantage for the organization. Workforce analytics is a key decision-support mechanism leading to competitive advantage. Human judgment will always come into play. However, the decision-making process will be enhanced and sped up through the application of analytics to help ensure the right decisions are made. It enables a company to create new ways to compete based on how they organize and deploy their workforce.
Drake Synergizer Workforce Analytics leverages critical data within your company to provide the very best in predictive and value-driven analytics for your workforce management. Integrate data from all corners of your business in a user-friendly, easy-to-understand way. To learn more on how it can help you effectively calculate the ROI on your human capital investments and connect the critical data points throughout your company, contact the Drake Management Solutions Team at 416 216-1074 [email protected]