Workforce analytics occupies a unique space within the HR realm. Once thought of as a specialist function populated by data scientists and technicians of every variety, it’s slowly morphed into a domain inseparable from business. As it has become more widely practiced and accepted, workforce analytics has become a staple of the new digital era for many business professionals. With high-quality data at a premium, companies are looking towards analytics as a means to create value, reduce costs, and improve their overall organizational experience.
Jonathan Ferrar is the co-founder and CEO of Insight222 Limited and co-author of the book, The Power of People: Learn How Successful Organizations Use Workforce Analytics to Improve Business Performance. He spoke recently at the CHRO Virtual Summit Reloaded on a topic close to his heart, transforming people and business success through the adoption and maturation of workforce analytics. He will be the Chairman of The HR Congress in Brussels, and will also co-present a Masterclass on Excellence in People Analytics along with David Green.
What is workforce analytics and why is it important?
Workforce analytics is essentially a set of processes that enables evidence based insights to be developed from the collection of various types of workforce and business data. It has become an indispensable part of HR over the last few years, as it has demonstrated its value by delivering a high return on investment. By enabling HR to provide business leaders and executives with detailed predictive data on employee retention, attrition, performance, engagement and much more, workforce analytics delivers value by taking some of the guesswork out of workforce optimization.
There are a number of different names that workforce analytics is associated with, each with a similar but distinct purpose. The two most common are HR analytics, and People analytics. HR Analytics has more of an internal organizational focus, predominately on optimizing HR’s own processes, policies, and procedures. People analytics tends to be externally focused, with a particular view to how people operate within the organization and their impact on the business. People analytics also looks in from an outside perspective on how HR delivers value to the business. Along with similar analytics functions (such as; marketing, consumer, etc), the combination of these functions can generally be termed under holistic workforce analytics umbrella.
How does analytics drive business improvement?
Ferrar demonstrates the value of workforce analytics through a selection of three case studies. Each case (from very different organizations) shows that workforce analytics has a definite impact on the process that leads to decisions that improve business performance. These improvements can be observed through quantitative measures like increasing retention rates, attrition reduction, financial performance, and through qualitative measures such as employee engagement and overall workforce happiness.
In an case study from IBM, analytics was instrumental in identifying top talent at risk of leaving the company by predicting the cyclical nature of attrition. It was also able to predict the types of skill sets more likely to leave. In accordance with these findings, IBM were able to carefully intervene and provide compensation packages in order to reduce attrition and secure talent for longer terms. At Clarks (a shoe retailer), employee engagement and financial performance was boosted by combining people, consumer, and marketing analytics, to show how the impact that good individual managers of retail stores had on sales. At an English Telecommunications company, a qualitative textual analysis of an employee survey provided a salient insight on a variable that was making employees unhappy and less likely to be engaged at work. This discovery led to a specific remedial action, and subsequently an increase in employee happiness and financial performance.
These cases demonstrate Ferrar’s main thesis; that workforce analytics is a specialized function HR leaders must be aware of and involved with, as it gives them both the qualitative and quantitative evidence to turn data into insights, actions, and financial returns. Analytics also gives HR the means to make the best decisions possible for the people of the organization, and for the financial success of the business. With this, HR leaders can therefore surely feel more confident in taking a seat at the executive table.
The 3rd HR Congress Brussels, November 27-28 will feature a selection of sessions that will explore this topic and much more! Make sure you follow The HR Congress Blog and #HRCongress18 to stay posted on all the latest news, updates and content from the world of work!