Many organizations leverage data to motivate their employees and boost productivity levels.However, metrics alone might not be effective without proper context and understanding.For employers looking to transform data into actionable insights, considering a workforce analytics or HR analytics solution could be beneficial.
Table of Contents
What are workforce analytics?
Workforce analytics is collecting and analyzing HR-related data, interpreting its significance in alignment with business objectives, and leveraging this information to enhance data-driven decision-making and operational efficiency.Where it once took multiple teams and considerable time to process, advancements in analytics technologies have helped employers quickly generate, analyze and apply valuable insights.
Why are workforce analytics important?
Through workforce analytics, employers can highlight underlying factors contributing to performance issues and address them in a manner that capitalizes on opportunities while reducing risks. Without these insights, employers might have insufficient or no means to back up strategic decisions.
How are workforce analytics used?
The application of workforce analytics is more than the mere improvement of existing procedures. Employers who deeply analyze and act upon their workforce data can potentially bolster their company's value in several key aspects, including:
- Decreasing employee turnover
- Curbing excessive overtime that hasn't been approved
- Setting performance standards
- Cutting down on labour cost
- Elevating the flexibility and responsiveness of the organization
- Ensuring compliance and managing risks effectively
- Supporting diversity, equity, and inclusion efforts
An example of workforce analytics
For employers looking to decrease overtime expenses caused by unexpected absences, leveraging sophisticated analytics to analyze the correlation between overtime occurrences and absences to identify patterns is a strategic approach. Additionally, a root cause analysis can help determine whether these unplanned absences relate to particular teams or supervisors.
With this insight, employers can devise a suitable corrective strategy. Initiatives such as training for managers and employees could enhance attendance, manage schedules more effectively, and improve engagement.
What are some types of workforce analytics?
Workforce analytics include four primary categories, with businesses advancing through each stage as they enhance their data interpretation skills:
- Reporting:
This category involves gathering transactional data related to the workforce, which enables employers to spot potential trends and issues. - Descriptive:
Through descriptive analytics, employers can track significant trends and decipher their meanings. This insight can help identify and address various issues. - Predictive:
Analyzing past data can assist employers in predicting future outcomes such as employee turnover, customer buying behaviour, call-centre traffic, and more. These predictions can help with decision-making in these areas. - Prescriptive:
Prescriptive analytics allows employers to assess the likelihood of specific outcomes by analyzing historical data. This can help determine the necessary steps to achieve particular objectives.
What are the benefits of workforce analytics?
Workforce analytics that are simple to use and apply can significantly assist businesses in reaching their strategic goals. Specifically, it can enable employers to:
Make informed decisions quickly
Using internal and external data sources can allow employers to foresee potential scenarios for their organization and take prompt action to prevent or minimize risks.
Attract and retain talent
Advanced analytics can help HR professionals identify the necessary talent for specific roles. Additionally, it can help keep employees engaged and aligned with the company's objectives, thereby reducing employee turnover.
Improve productivity
Access to real-time, centralized workforce metrics enables employers to track and improve employee productivity.
Reduce costs
Access to industry and location benchmarks can help businesses offer competitive salaries, while analytics can assist in managing schedules and reducing overtime expenses.
Enhance data security
Cloud-based workforce analytics provide a robust and flexible system that helps safeguard sensitive employee information and minimize security risks.
Challenges addressed by workforce analytics
Organizations relying on manual processing or outdated technology for workforce data analysis may struggle with data accessibility and simplicity, causing a hindrance in taking quick and effective action. Furthermore, integrating external data like industry surveys can be challenging and quickly become obsolete. These issues are addressable through real-time, automated, cloud-based solutions, which deliver easy-to-understand and actionable insights for decision-makers at all levels.
Workforce analytics software and tools
Employers looking for workforce or HR analytics solutions typically face two choices:
Build
Developing custom analytics solutions demands significant internal IT efforts for both creation and maintenance, along with navigating data permission and security concerns. This route best suits companies with unique analytical needs or incompatible systems.
Buy
For organizations lacking the time, finances, or resources to create an in-house solution, purchasing from a trusted vendor is an option. Many providers offer integration of workforce data with essential human capital management (HCM) functions, enriching dashboards and reports.
How to implement workforce analytics
Employers aiming to translate people data into practical insights can follow these steps for effective implementation:
- Define business objectives and identify areas where analytics can make a tangible difference.
- Engage critical stakeholders from HR, finance, IT, and other sectors early to foster communication.
- Map out the organization's data collection and reporting mechanisms and establish a quality control model for data scoring.
- Determine the specific data required for workforce analysis.
- Incorporate external HR data to assess the impact of workforce programs in the broader organization.
- Partner with a benchmarking provider that offers access to a broad and current database of transactional data.
- Assume responsibility for data governance, ensuring team adherence to privacy regulations.
- Acquire the expertise needed for analyzing complex data and presenting it in an accessible, impactful manner to leadership.
- Apply insights from workforce analytics to inspire effective real-world changes.
Frequently asked questions
What is a workforce analysis?
A workforce analysis involves gathering HR-related data and interpreting what it signifies for the organization's goals. This analysis provides valuable insights that can lead to strategic decision-making and enhanced business processes.
How do you do a workforce analysis?
The approach to analyzing workforce data varies from one organization to another. However, a fundamental way to perform a workforce analysis includes:
- Deciding on the objectives that the HR data should fulfill.
- Gathering data from both internal and external sources.
- Applying technology to analyze the data and identify trends.
What is the difference between workforce analytics and HR analytics?
While HR analytics and workforce analytics may intersect and sometimes serve similar purposes, the primary distinction lies in their focus areas. HR analytics typically deals with aspects related to HR activities, such as hiring processes, whereas workforce analytics examines employee-specific data like performance, attendance, pay levels, etc.
What is the role of workforce analytics in talent management?
Workforce analytics play an essential role in forming strategies for compensation and identifying potential employee turnover. By leveraging these analytics, companies can enhance their talent attraction and retention efforts while reducing turnover rates.
Learn More
Suffering from high employee turnover? Can't find the best way to attract the right talent? You can benefit from ADP's talent solutions by getting help with talent management strategies, employee experience, and much more!
Talk to us about your workforce challenges, and we'll walk you through our solutions — including how companies like yours use them. Call 866-622-8153 or start a quote.
This guide is intended to be used as a starting point in analyzing workforce analytics and is not a comprehensive resource of requirements. It offers practical information concerning the subject matter and is provided with the understanding that ADP is not rendering legal or tax advice or other professional services.
