If your business wants to remain competitive with other industry giants, it’s important to start culling and analyzing both HR and business data. Failure to do so will only slow growth and productivity, as older paper-based analytics systems often result in poor decision-making rooted in guesswork. The benefits associated with adopting workforce analytics are well documented. In fact, according to a 2013 study by the Harvard Business Review group, the businesses that most effectively managed their workforce by using analytics improved their business profit by as much as 65%. (Source) Bottom line, it’s essential for your HR team to gain insights on important workforce data that they can easily understand and access in order to maximize profits.
How Workforce Analytics Influence Business Decisions
These are some of the top reasons why workforce analytics are worth the extra effort and resource allocation:
Understanding Shifts In Historical Patterns: Workforce analytics software can allow you to search for patterns, so that you can understand which trends will remain steady, and which trends will no longer continue. For example, you can view scheduling trends from past years to understand how to best approach current situations. Ultimately, this information can help decision makers understand which programs are currently working. Workforce analytics not only focuses on gathering relevant employee data, it also aims to provide fresh perspectives into each process by using data to inform decisions, improve your processes and performance.
Eliminating Guess Work: With workforce analytics, your HR department won’t have to rely on “top of mind” guesses; rather, they will be able to consistently make educated decisions about what is likely to happen in the future (in regards to HR trends). Analyzing workforce metrics can help determine the “cause” for a specific problem, often suggesting possible solutions. For instance, is an increasing turnover rate symptomatic of a wider issue? Or can metrics be used to discover that higher turnover is occurring only in one particular division? Using this information, analytics can review whether this is an issue that needs to be addressed company wide, or only in a specific department.
Time To Prepare Plans & Mitigate Problematic Situations: With the current fast-moving business climate, there are numerous opportunities to be caught off-guard by unforeseen events. With workforce analytics, you can alert managers of upcoming trends in advance, giving them time to prepare a plan to appropriately handle any upcoming issues. Also, you can warn decision makers about upcoming talent opportunities in the recruiting marketplace, making it easier to fill your jobs with top talent. You will have the ability to dramatically decrease costs because you mitigate problems before they get out of hand.
Important Analytics To Measure To Improve Profits
Whether your company is just beginning to use workforce analytics, or has used some form of workforce analytics but are looking to expand the usefulness of your data, it is strongly recommended that you focus on three fundamental HR areas-- Turnover, Recruiting, and Employee Performance-- before moving on to more advanced workforce metrics.
Turnover: Identify who is leaving your company voluntarily and why. Is it related to onboarding, training or management issues? Do particular functions account for a large portion of your overall turnover rate? Use your findings to address performance or training gaps.A recent ERE Media post details the high cost associated with employee turnover.
Recruiting: Identify the top talent common characteristic traits for each position in your organization-- especially those that drive business performance-- and map them to your internal and external recruiting strategies. Use this data to help determine the type of skills and abilities that you need to actively recruit for both immediate and long-term success.
Performance: Take some time to identify who the underperformers are and attempt to determine why they may be underperforming. It's important to understand when and where productivity fluctuates, as well as the main reasons why. Align compensation and incentive programs with performance. Use this information to improve performance by implementing better management, training, incentives, etc.