Today, more and more business organizations start to rely on data and related insights in their operations and decision-making. It allows them to improve their performance and stay competitive in the present-day challenging and uncertain business environment.
In particular, analyzing and gaining insights from workforce data can improve both people’s and the whole organization’s performance, which has a significant impact on business success.
What workforce data should be analyzed, and how does it improve business performance? Let’s discuss workforce analytics in the article.
What is workforce analytics?
Workforce analytics is the use of workforce-related data to improve decision-making and management of a company’s employees. Workforce-related data refers to people’s performance, productivity, competences, attendance, engagement, and more. The main purpose of workforce analytics is to measure, analyze, and find ways to improve performance and decision-making.
There are four types of analytics that can be used:
- Descriptive analytics (for describing the current state of things),
- Diagnostic analytics (identifies the reasons for the current state of things),
- Predictive analytics (forecasts outcomes based on real-time and historical data),
- Prescriptive analytics (provides suggestions on possible solutions).
In project-based organizations, resource managers also deal with employee-related data to make sure that all projects running in a company are staffed with necessary employees. They allocate resources using the data on people’ skills, availability, capacity; forecast future resource needs and find ways to meet them; analyze resources performance, etc.. A resource management tool like Epicflow can become a resource manager’s right hand: e.g., Epicflow not only provides visibility of resource-related data across the organization, but can also suggest resource allocation options, forecast resource demand and capacity, helps detect resource bottlenecks and their causes, and more.
Now let’s explore how the analysis of workforce data helps companies improve their business performance.
The impact of workforce analytics on business performance
Applying workforce analytics provides organizations with the following benefits.
1. More effective workforce planning and recruitment
Hiring the right talent is the basic step in achieving a company’s business goals. Thanks to workforce data analytics, organizations can review the current workforce needs and forecast how these needs will evolve in the future; identify employees’ skill gaps and plan their professional development (e.g., upskilling and/or reskilling in response to changing skill demands). When workforce planning and recruitment are data-driven, companies have an opportunity to hire the right talent at the right time, i.e. recruit the people whose competencies will help an organization achieve its business goals. In addition, this will contribute to hiring cost optimization and increasing people’ productivity, which will also have a positive impact on a company’s business success.
2. Retaining talent
Retaining talent is one of the signs of a company’s prosperity. If an organization has high turnover rates, they lose a lot of time and money: hiring new people and training them is costly and causes a decline in overall performance – it can take several months before a newcomer can do their job at the required level. Finally, if employees come and go regularly, it will negatively affect the workplace atmosphere and teamwork, which also won’t add to their productivity and engagement.
Therefore, companies should seek ways to retain their employees, and workforce analytics can be used for this purpose – organizations can collect and analyze data and find out the reasons why people leave or stay. For example, they can interview those who leave and use these insights to choose the right retention strategy.
3. Improved performance
Hiring the right talent and taking efforts to retain them is a prerequisite for high levels of productivity and performance. But this isn’t enough. Workforce analytics makes it possible to track and review employee performance indicators. This can help organizations in the following ways.
- First of all, it helps identify inefficiencies in the workflow and areas for improvement.
- Secondly, it gives an idea of employees’ strengths and weaknesses: e.g., you can identify your high performers and think of ways to reward them, which will make them feel valued and increase their engagement. Alternatively, employees who haven’t done so well may require additional training.
- Finally, it contributes to increasing the overall performance level, which also has a direct impact on a company’s business success.
4. Better decision-making
Improving decision-making is one of the primary purposes of using the data. It provides organizations with opportunities to gain real-time insights and make forecasts that can optimize their performance. Thanks to collecting and analyzing the data, workforce analytics will provide valuable insights for a variety of employee management decisions, for example: what talent to look for in the upcoming year? What talent retaining strategy will be most efficient? What will increase employee efficiency?
What’s also important is that data-driven decisions can eliminate the negative impact of office politics – when someone misuses their authority to gain their own benefits. For example, managers can face such phenomena as cronyism and nepotism in the hiring process, when they are pushed to recruit people based on their relationships with someone influential in a company. Instead, they can use data-driven insights to stand against office politics and find solutions that will be most beneficial for an organization, not someone’s interests.
5. Cost optimization
Workforce analytics contributes to more reasonable use of an organization’s financial resources. Relying on data in talent and human resource management contributes to better predictability: e.g., you can use the data-driven insights to plan recruitment needs beforehand, which will allow you to plan the hiring costs as well and reduce the risks of unplanned expenses. Also, workforce analytics contributes to more effective cost management when it comes to payroll, benefits, and compensations. Finally, if employees are efficient and engaged, and the quality of their work is high, it will increase customer satisfaction. In turn, this can result in more orders, which will create opportunities for a company’s business growth.
- Workforce analytics involves the use of workforce-related data (performance, productivity, competences, attendance, engagement, etc.) to measure, analyze, and find ways to improve performance and increase the efficiency of decision-making.
- Workforce analytics has a positive impact on both each employee’s and the whole organization’s performance.
- The insights derived from workforce-related data contribute to:
- increasing the effectiveness of workforce planning and recruitment;
- retaining talent;
- improving employee’s performance;
- informed and effective decision-making;
- cost optimization.
Therefore, the application of workforce analytics is a powerful tool enabling companies to improve their business performance and achieve success.