Analytics Contribute to Workforce Strategies

CUNA's Escan
November 28, 2011 | COMMENTS

In most firms, human resource (HR) professionals work with the finance and operational areas, and analytics are helping to make decisions related to workforce planning, compensation, development, and deployment.

A range of new technologies and changes to business processes—and a host of new challenges for HR—are profiled in Deloitte’s Human Capital Trends 2011, beginning with workforce analytics.

The latest analytic tools involve statistical models that integrate internal and external data to predict future workforce and talent-related behavior and events. These models help companies focus limited resources on critical talent decisions.

What’s driving this trend?

The need for foresight. Leading HR operations are moving from filing reports to harnessing the power of workforce analytics to make more effective decisions in hiring, training, assignments, and trend projections.

Falling costs, new tools. Software-as-a-Service (SaaS) technology and cloud computing are driving down the cost of data management and analytics, making sophisticated workforce analyses faster, cheaper, and more broadly available. New solutions are easily scalable, creating accessible options for companies of almost any size.

Data-savvy leaders. There has been a significant shift in HR leadership, with a new breed of executive coming into HR from finance and operations. The new leaders bring data-driven techniques along with them —they’re quickly changing how HR does business, and they’re challenging their HR organizations to focus on higher returns on HR investments.

Richer and deeper data. Companies have amassed large quantities of workforce data over the past 10 years from their enterprise resource planning and HR management systems. More companies now have timely access to higher-quality workforce information than ever before.

Practical implications

When it comes to workforce analytics, most companies already have the data they need. If your company is paying people with a payroll system, it has enough data to get started.

Deloitte’s advice is to view workforce analytics efforts as a multiphase transformation:

Start with real business problems. Begin with an assessment of current challenges, and realize that predictive analytics takes time and investment.

Focus on building capabilities. Moving from a reporting culture to an analytics culture requires companies to define analytic goals precisely and provide concrete examples of benefits.

Keep the end in mind. You’re moving to an operating environment where you’ll use predictive modeling to make more effective workforce decisions. Don’t lose sight of that.

On the front lines

The most effective workforce analytics programs strike a balance between building capability and solving immediate business problems. The combination should be both sustainable and scalable. Possible entry points include:

• Workforce planning and optimization. What types of business talent do you need? Are demographic shifts creating gaps in your supply-demand forecast?
• Recruiting analytics. To meet near-term and future needs, what are your most effective strategies for attracting critical talent?
• Organizational design. What structures can help you manage growth in the “new normal?”
• Leadership development. Who will replace your current leaders and when? What’s their probability of success?
• Deployment decisions. How can you make more effective workforce deployment decisions related to mergers, realignments, market opportunities, and competitive threats?
• Health and productivity. How can you effectively correlate benefits and related investments in wellness with productivity?

Consider also the building blocks of a successful workforce analytics program:

• People. What kinds of skills are needed to support an analytics capability?
• Process. What’s the best way to improve the impact of decision-support tools?
• Technology. What tools and systems are necessary for data-driven decisions?
• Data. How do you get the most value out of internal and external data?
• Governance. How will data guide decisions, and who’s accountable for implementing them?

In many firms, workforce analytical tools are already proving their value. The new models and new tools have the potential to become predictive and highly strategic. Be sure to stay focused on building capabilities and solving real business problems.