Today’s businesses are more data-conscious than ever. Decision-makers crunch numbers before launching a new product, planning marketing campaigns, and considering budget cuts.
However, another area of business can benefit from some number crunching: Businesses are now using analytics to gain insights into their workforce. For instance, a retail company might use analytics to identify the most productive shifts and adjust staffing accordingly. A tech company might use analytics to identify skill gaps and develop targeted training programs. These are just a few examples of how analytics can be used to optimize workforce management.
What is Workforce Analytics?
Workforce analytics is the process of collecting human resources information to gain actionable insights. Employers often use analytics software to measure how HR efforts are helping meet their overall business goals.
Workforce analytics differs from people analytics in that it looks at the overall HR structure rather than the employees and management team. It typically focuses on worker performance, employee turnover, recruitment and staffing efforts, training, and worker compensation.
Why Use Workforce Analytics?
Your workforce is an integral part of day-to-day business operations. A strong team can help boost productivity and keep you on track to meet your goals. With the power of workforce analytics in your hands, you can optimize your talent management processes, identifying ways to attract and retain the best professionals for each position. This empowerment lets you make informed decisions that drive your organization’s success.
Workforce analytics software can take this even further, monitoring trends continuously. Here are some reasons to put workforce analytics to use in your organization:
1. Improve Employee Engagement
Data collection is a great way to measure your employee engagement levels. Why does that matter? An engaged employee is more productive, calls out sick less often, and contributes to higher profits. By using workforce analytics to measure engagement, you can identify areas where your employees are most engaged and areas where they may need more support.
This can help you develop targeted strategies to improve engagement and your bottom line. You’ll also spend less time hiring since happy employees are less likely to leave for a different job.
Workforce analytics looks at the overall employee experience. You might gather enough information to measure burnout risk, for instance, or pinpoint redundancies in your staffing.
2. Track Employee Performance
Most employees don’t constantly work under the watchful eye of a direct supervisor. That can make tracking performance challenging. However, with the efficiency of workforce analytics, you can gather employee data to see where improvements can be made. This streamlined process allows you to focus on other aspects of your HR practices, making you feel more productive and efficient.
One of the best things about gathering people’s data is that it helps you create benchmarks. As your organization grows and changes, you can reflect on those data points to measure workforce performance.
3. Track Employee Productivity
Many businesses track productivity by noting how much idle time employees have. The move to remote work has made it clear that data-driven productivity analysis can be far more accurate than gut instinct.
The right workforce management tools can help you with your business’s overall strategic planning. By reviewing the data, you can accurately assess your team’s performance and see where changes are needed. For example, if you notice that a certain team is consistently underperforming, you can investigate the reasons why and develop a plan to address this.
You can then set goals to maximize each team member’s talents to get peak productivity. By using workforce analytics in your strategic planning, you can ensure that your business is making data-driven decisions and is well-prepared for future changes in your workforce.
4. Prevent Employee Turnover
Although estimates vary, replacing a departing employee isn’t free. You’ll spend money and valuable time recruiting and training a new hire, and that doesn’t include the decline in morale for the employees who take on the departing employee’s workload.
Workforce analysis can help you identify high turnover areas in your business and make adjustments. This proactive approach can provide a sense of relief, knowing that you have the tools to address potential issues before they escalate. You can also gain valuable information that can help with succession planning, further ensuring the stability of your workforce.
5. Increase Employee Retention
Employee retention is an ongoing issue for businesses in an era of decreasing job tenures. Finding a long-term employee can be challenging even for companies that create a positive work culture and engage workers.
Finding long-term employees starts during the hiring process, and that’s where workforce data can help. By using analytics, you can enable predictive decision-making to identify potential candidates most likely to be in a job role with your company for over a few years that keeps them engaged.
For example, you can use data on past employee performance and engagement to identify the characteristics of employees who are likely to stay with your company long-term. This can help you make more informed hiring decisions and increase your chances of finding employees who fit your company culture and long-term goals.
What’s the Main Difference Between Workforce Analytics and HR Analytics?
Human resources analytics, also known as people analytics, focuses on an organization’s employees to improve internal HR practices. Workforce analytics, on the other hand, focuses on the workforce as a whole, looking at worker output and efficiency. Workforce analytics aims to help a business reach its overall goals.
What are the Main Types of Workforce Analytics?
There are many types of workforce analytics. Here are four that are common in most organizations.
- Descriptive Analytics: Focuses on understanding what happened in the past. It involves collecting and analyzing historical data about your workforce, such as employee demographics, performance metrics, absenteeism rates, and turnover statistics. The goal is to paint a picture of your current workforce makeup and performance.
- Diagnostic Analytics: Delves deeper into understanding why things happen. It analyzes past data to identify trends, correlations, and root causes of issues like high turnover or low productivity. By uncovering the “why,” organizations can start developing solutions for improvement.
- Predictive Analytics: Forecasts future trends and outcomes. It uses historical data, machine learning, and statistical models to predict employee turnover, skill gaps, and potential performance issues. This allows organizations to proactively address challenges and make informed decisions about talent acquisition and development.
- Prescriptive Analytics: This is the most advanced type, going beyond prediction to suggest specific actions. It uses various analytical techniques to recommend solutions based on predictive analytics insights. For example, it could suggest targeted training programs, performance improvement plans, or adjustments to recruitment strategies.
In addition to these four main types, workforce analytics can be further categorized based on the specific focus areas, such as:
- Talent Acquisition Analytics: Analyzing data to optimize hiring processes, identify top talent, and improve the candidate experience.
- Talent Development Analytics: Analyzing data to track the effectiveness of training programs, measure skill development, and identify high-potential employees.
- Compensation & Benefits Analytics: Analyzing data to optimize compensation packages, assess the effectiveness of benefits programs, and ensure pay equity.
- Employee Engagement Analytics: Analyzing data to understand employee sentiment, identify drivers of engagement, improve employee retention rates, and improve employee morale.
Understanding Workforce Analytics Metrics
Before you can put analytics solutions to use, you’ll need to know exactly what to measure. Below are some of the most critical metrics.
Employee Turnover Rates
What’s your average employee tenure? This information can be crucial to understanding worker morale.
- To calculate your turnover rate, divide the total number of departing employees by your average employee numbers.
- Multiply the result by 100 to express it as a percentage.
- If you have 1,000 employees and 34 separations, the calculation would be: 34 ÷ 1,000 = .034 x 100 = 3.4%.
Diversity Ratios: Are you meeting your diversity, equity, and inclusion (DE&I) goals? Workforce analytics is a solid method of keeping an eye on your ratios. Data analysis can help you ensure your recruiting efforts are creating a diverse workforce.
Employee Engagement Scores: Human capital management (HCM) uses tools like employee engagement surveys to discover how engaged each employee is. You can add this metric to your set of workforce analytics tools. If the employee surveys are anonymous, employees will feel free to be open with complaints and praise.
Typical Career Path: Ideally, some of your current employees will be your future management team. This metric looks at the typical career path of a worker in your organization. Are managers often promoted from within or hired from outside? What opportunities for advancement does an individual employee have?
Training Opportunities: Education and training also serve as investments in your team. With this metric, you see whether employees have learning opportunities through on-the-job training or outside courses. More importantly, they can determine whether employees take advantage of your opportunities.
Salary Distribution: Pay equity can be a big factor in employee engagement. You can easily crunch the numbers to determine how pay is distributed among your workforce and whether compensation is based on years worked, skill level, job difficulty, or other factors.
The Benefits of Workforce Analytics for Business Leaders
Whether you’re a small business with a few employees or a large corporation with a full HR department, workforce analytics can help your leadership team. Here are a few ways workforce analytics benefits a business’s top stakeholders.
Supporting Business Performance and Goal Achievement
Your workforce is key to achieving your goals year after year. The more buy-in you can get from your teams, the more cohesively you’ll work together to move your business forward.
Automation can help maximize your workforce analytics efforts. With the right tools, your leadership team can monitor your metrics and ensure that any changes you make move you in the right direction.
Providing Real-Time Dashboards for Monitoring Key Metrics
Things can change quickly. The data you gathered last year might be outdated by the time you schedule another workforce study. That’s where real-time analytics can help.
You can continuously monitor the most important metrics with the right workforce analytics dashboards. Up-to-date numbers will be displayed when you log into the system daily, equipping you to react quickly to sudden shifts.
Making Data-Driven Decisions to Drive Organizational Success
In a data-driven business world, relying on cold, hard facts is more important than ever. Analytics gives you the information you need to make objective decisions.
Today’s analytics don’t just help you study past and present behavior. Using the information it gathers, solutions with built-in predictive analytics can show you what’s ahead for your business. This can help you prepare to build a future workforce that will hit all the right metrics.
What to look for When Evaluating Workforce Analytics Software
In recent years, workforce analytics software has evolved to meet the needs of HR leaders. Here are some of the features to look for when evaluating a potential solution.
- Data integration: Can it connect with multiple data sources and external sources in your tech stack like HRIS, payroll, time and attendance, and performance management systems?
- Data security & privacy: Does it offer robust data security features and comply with privacy regulations?
- Data visualization & reporting: Does it provide user-friendly dashboards, reports, and visualizations for easy data exploration?
- Analytical tools: Does it offer all the analytics types you need, such as descriptive, diagnostic, predictive, and prescriptive?
- Pre-built dashboards & reports: Does it offer pre-built dashboards and reports for common workforce metrics or allow for custom creation?
- Advanced features: Does it include AI-driven insights, scenario modeling, and workforce planning tools?
- User interface: Is it intuitive and user-friendly for people with different levels of technical expertise?
- Accessibility: Does it offer accessibility features for users with disabilities?
- Scalability: Can it handle your organization’s growing data volume and user base?
- Integration with existing systems: Can it integrate seamlessly with your existing HR and other software systems?
- Vendor support & training: Does the vendor offer adequate support, training, and documentation?
- Cost: Does the pricing model align with your budget and needs?
FAQs
What is workplace analytics?
Workforce analytics, also known as workplace analytics, refers to the use of data and statistical analysis to gain insights into various aspects of the workforce. It helps organizations make informed decisions about workforce planning, talent acquisition, performance management, and employee engagement.
What are the four types of HR analytics?
The four types of HR analytics are descriptive, diagnostic, predictive, and prescriptive. Descriptive analytics involves analyzing historical data to understand past trends, while diagnostic analytics identifies the reasons behind specific trends. Predictive analytics uses statistical models to forecast future outcomes and prescriptive analytics provides actionable recommendations based on the insights gained from the data analysis.
How can workforce analytics be useful in HR management?
Workforce analytics is helpful in HR management as it provides data-driven insights into workforce planning, talent acquisition, performance management, and employee engagement. Organizations can make informed decisions and implement effective strategies to optimize their workforce by analyzing historical data and using statistical models.
What is the role of HR people analytics?
HR people analytics plays a crucial role in leveraging data and statistical analysis to gain insights into various aspects of the workforce. This enables HR professionals to make informed decisions in areas such as workforce planning, talent acquisition, performance management, and employee engagement. By utilizing data-driven insights, HR people analytics helps optimize HR management strategies and drive positive organizational outcomes.
Implement Workforce Analytics with Teramind
Managing business outcomes is an ongoing challenge, but technology can help. Workforce analytics can give businesses and HR professionals the tools they need to manage the lifecycle of each employee’s tenure from start to finish and increase employee satisfaction, productivity, and morale.
Teramind offers workforce analytics tools that help businesses thrive.
