Workforce analytics can help HR teams reclaim time and resources, spend more time thinking and acting strategically, and raise their profiles by equipping them with the means to speak the language of the executives.
But what’s the value of workforce analytics outside of HR… that is, what can workforce analytics contribute to the business-at-large? This is where things really get exciting. There are so many areas where comprehensive analytics can provide insight into how things are working/not within the business and drive improved performance.
However, in order to make sure HR analytics are leveraged in the most appropriate way, it’s essential to situate analytics within the context of business objectives and outcomes. Workforce analytics can be overwhelming and it can be easy to get lost in all the numbers and data. It’s critical to have a focus. Analytics for the sake of analytics is just numbers – you need to have a plan and that means using your solution wisely to tackle your defined business objectives.
We like to think of analytics within a broader context, flanked by business objectives at the one end and business outcomes at the other. When you think of it this way and act accordingly, your application of analytics can have significant value to both HR and the organization as a whole.
Within this view there are 5 major buckets:
1. Objectives & Business Goals – To be most effective you need to link workforce analytics to your business goals. This means spending a bit of time articulating and prioritizing your business objectives, goals and desired outcomes. Your objectives may be related to reducing turnover and gaining a precise understanding of turnover by segment, the costs associated with this, etc. You may have succession planning on the agenda. Whatever your top objectives, you need to keep them at the forefront and use your analytics solution to bring insight to these areas.
The next 3 fall under the umbrella of Analytics:
2. Metrics – Identify the metrics you need to capture that align to the objectives. Depending on your objectives, this may require seeking data outside of HR as well as inside.
3. Segmentation – This is where the meat of the process takes place. Once you have all the metrics and data relevant to your objective, you can start to slice and dice the data across the variables. With connected data, you can dig deeply into turnover. No longer do you have to rely on broad numbers such as a company-wide turnover rate of 12%, but you can start dissecting this with precision. You can look at turnover by demographics, tenure, performance, engagement, learning, location, job/role… really any area where you capture data. This turns a generic understanding of turnover into a very specific one. Imagine being able to identify that top performer turnover for a particular job role is 33% and the impact of this is $1.5M in lost revenue per year. Instead of talking about one number with little context (12%), now you have the ability to understand turnover by performance and role PLUS the cost of this to the business. And… you have a targeted place to start making decisions and taking action.
4. Insight – Once you have segmented the data, it’s time to start drawing insights from it. This means looking for patterns that support business objectives as well as looking for anomalies, hotspots and areas out of alignments with business objectives.
And last but certainly not least:
5. Action – Armed with deep analytics and insight into business problems, HR teams are equipped with the knowledge to take action and drive towards improving business performance.
With very targeted insight into your business objectives (whether that is reducing turnover, increasing engagement, succession planning, understanding Quality of Hire, etc.) you can start tackling these issues head-on and in the most efficient and effective ways. Taking our example above – if, through segmentation, you can pinpoint that turnover is a particular problem among three specific groups of employees and you know that the negative impact to the business is higher in one than the others, you know where to place your focus on driving improvements.
The world of applying workforce analytics to HR data can be very exciting but it’s easy to get lost in all the data. That’s why it’s essential to approach workforce analytics within the context of defined business objectives. Take the time to articulate your objectives in HR and use your analytics solution to powerfully segment and gain deep understanding of your priority areas. From here, you’ll develop a data-driven view, be able to tell a compelling story of what’s happening, and the insight to chart the way forward. Schedule a demo and learn more.
