What is workforce analytics?
Gartner describes workforce analytics as “An advanced set of data analysis tools and metrics for comprehensive workforce performance measurement and improvement”. These tools enable HR practitioners to evaluate and measure HR activities (specifically related to their workforce) as well as human capabilities and behaviours. You can then use the data insights gathered to effectively inform your HR and people strategy.
From my experience working with numerous HR professionals across a number of industries, the importance of having workplace analysis tools is becoming increasingly evident. In short, understanding your people analytics helps you identify insights to formulate a data-driven approach to decision-making and no longer rely on just a ‘gut feel’.
Which workforce analytics impact ROI?
Let’s talk about where to start with workforce analytics and how to maximize your organization’s return on investment (ROI).
If I had to narrow it down to just a few predictive workforce analytics that have been repeatedly proven to directly impact ROI, I would start with the following:
- Retention – Understanding the insights from predictive workforce analytics helps you to better understand if and when you are losing employees, and whether those losses are preventable.
- Performance – Tracking performance through tools such as goals and a continuous feedback model allows you to properly measure performance and identify any disengagement points.
- Productivity – Using workforce data analysis will highlight how employees are engaging with their tasks and responsibilities.
The following outline will show you where you can start to populate the insights you already have at your fingertips, drive business growth and provide you with data to create targeted business initiatives.
Where are your opportunities to achieve optimum ROI?
Now that we’ve identified the three types of workforce analytics we believe you should be focusing on to increase ROI and make effective decisions about your organization’s people, we can look more closely at how this might work in practice.
This is where you can make a huge impact in uncovering the true cost of hiring and churn of your employees.
To measure retention, we can start reviewing analytics based on tenure, headcount and new hire turnover, as well as the cost of hire. This gives you hard data around the hiring events that have taken place in your organisation.
However, if you’re truly looking for a powerful solution, being on the front foot and using AI to generate predictive insights will help turn your approach from reactive to proactive when it comes to keeping your people.
Using analytics such as survival analysis will help you determine the likelihood of your employees’ retention and keep you one step ahead of potential flight risks. Your executive group is likely to be very interested in this predictive data.
The below example, from the intelliHR platform, shows that 97.16% of current employees are expected to stay longer than three years from their commencement date.
RELATED: The ultimate guide to HR analytics
When it comes to understanding the drivers for creating ROI from people, we must first map out the typical employee lifecycle across the performance curve.
How quickly can you get your new hires up to speed and have them delivering a return on your investment?
Here’s a simple example of the breakeven performance curve from new hire to profit. Watch this short explanation video to learn more.
Measuring performance within your business gives employees a goal post to aim towards. Employees are then more likely to understand what’s expected of them, and know what they need to do to be successful in their role. It also gives them an opportunity for growth and development, whether that be aligned with one particular skill or their future career direction.
When reviewing performance in your business, we suggest a collaborative and frequent approach where both the employee and leader can give open and constructive feedback during this process. These responses can be aligned with key metrics within your business providing you a snapshot of all levels of achievement within your organisation.*
*The below is an example of business performance analytics measuring key metrics based on responses by both the employee and their supervisors.
Creating a workforce strategy using feedback gathered from your employees can directly result in happier employees and immediately benefit your business.
The value here is that not only can you highlight process improvements, but your employees will feel valued and heard, often resulting in increased productivity. That’s instant value to the bottom line!
Happier employees are more productive employees. Although the jury is still out on exactly how happy employees “should” be for maximum productivity, efficiency and health, we’ve learned a few things about the effects of a happy workforce. We know that, overall, using a continuous feedback model and investing in professional development are two ways in which employees can start to feel valued at work.
*The below example displays employee satisfaction data, showing sentiment results over time in relation to job satisfaction.
You can also measure productivity through workforce analytics such as task compliance and completion rates, overall business sentiment, training investment hours and monetary cost. You could also view productivity based on how your employees are engaging with their goals.
When setting goals in your business, it’s important to ensure these goals are aligned with the overall business strategy and you’re working towards a common objective. People want to know they’re a part of something bigger than themselves.
Start to ask yourself questions like:
- How many goals are employees setting?
- Are these being completed by the due date or forgotten about?
- Do employees know what our core business strategies are or know how they can contribute to these?
*In general, a happier organization is a more productive and successful organization (Fisher, 2010).
Get started using workforce analytics
Impactful predictive workforce analytics is easily accessible to businesses that use an informed approach, and the right platform to collate and analyze their people data. Your HR software should allow you to visualize this data to drive informed decisions for your organization, teams, and individual employees.
intelliHR’s predictive HR analytics tools have helped numerous organizations identify insights and trends to measure key cultural, engagement or performance changes. For more information on getting started and maximizing your workforce analytics, take a read of the resources below or request a demo with our team.