The answer is Workforce Analytics! For many organisations the workforce is not only the largest expense, but it is also the biggest asset and the largest contributor to organisational value. So, how does an organization measure the value of talent, and efforts to manage that talent? How is Productivity quantified and measured against organisational value? And, in a world of scarce resources, on which workforce areas should we focus our efforts and attention?
This is what Workforce Analytics is about. Workforce Analytics makes the connection between human capital, business, and financial data and drives data driven, fact-based business decisions. Workforce Analytics involves using statistical models that integrate internal and external data to predict future workforce and talent-related behaviour and events. These models help companies focus limited resources on critical talent decisions.
As organisations are shifting business models and searching for new revenues in the wake of the recession, many business leaders are adjusting their strategies to meet the shifting demands, resulting in major shifts in human capital management and deployment. At the same time, the pressures to quantify the true cost of human capital and better understand the human capital management levers that produce superior results have increased.
As the business environment changes, so are the decisions necessary to drive organisational performance and growth into the future. Critical business decisions today are:
- Is the ROI on Human Capital higher than the ROI for other business capital (i.e., on working capital, invested capital)?
- Is workforce productivity increasing, decreasing or static? How are we performing versus peers?
- Is internal mobility a source of value creation or of turnover and cost at the organization?
- Are leaders effectively managing human capital? Is there a correlation between manager effectiveness and workforce engagement, performance and retention?
- Do we have a leading indicator of employee turnover? What is the percentage of employees at risk?
- Is there a link between employee performance and total pay/rewards? If so, do we know the optimal pay for performance mix?
- How can our workforce be modelled to optimize for productivity and profitability?
- What is the statistical link between training and organisational profitability? If so, where could investments in training improve productivity and profitability?
- Is there a link between employee engagement, customer satisfaction and increased revenue and profits? If so, what are the value drivers?
If you can’t answer these questions right now, you are not yet part of the new era of HR.
The following quote comes from IBMs Getting Smart About Your Workforce: – Why Analytics Matter. “Our findings indicate that HR professionals, just like executives in finance and other corporate functions, need a consistent analytical point of reference to make human capital decisions that impact business results. Along with the necessary resources to transform data into insights, workforce analytics enable HR professionals to be more engaged in the formulation of corporate strategy. The result is better fact-based decision-making capability that is aligned with the long-term business imperatives of their organizations.”
So – our question is, what are YOU doing about it? What are YOU doing to ensure that you are part of this new field of HR?
To learn more about Workforce Analytics, contact us,, or better still, attend our Workforce Analytics and Workforce Planning Workshops.