While almost every successful company collects tremendous amounts of information regarding their financial and marketing activities, only the most forward-looking use analytics to drive the effectiveness of their human capital management (HCM). The use of analytics is integral to the success of the most outstanding companies. Not only do the resulting workforce management strategies help in the near-term with the current lagging economy but also position the company for the inevitable recovery when it arrives.
Many companies make the mistake of viewing HCM analytics as a luxury rather than a necessity in down economies. More prudent companies realize that these analytics can help them lower costs when top line growth is stagnant by identifying redundancies and inefficiencies in the work force. More generally, analytics can help with worker turnover, benefits, succession and training.
The Power of Workforce Analytics
While it’s been said that statistics can be molded to support any position, careful consideration of key performance indicators (KPIs) and other business metrics can give a decided edge to decision makers in any company. Whether your aim is to identify key business relationships or anticipate certain outcomes, the use of analytical tools such as descriptive statistics and predictive modeling in the HR realm can make a significant contribution towards achieving your company’s goals.
A second benefit that analytics lends to the HR directors and their staff is increased credibility. Backed by facts, figures and credible projections, HR personnel can contribute on an equal level with the finance and marketing departments to more confidently affect executive decisions and company objectives. It’s a win-win situation for HR and for the company.
Implementing HCM Analytics
There are several schools of thought as to the best way to implement an HR analytics system but most advocate using a staged approach. In most cases, it makes sense to obtain buy-in from all departments and stakeholders by consolidating all data sources onto a unified platform. An immediate benefit is that authorized employees can access a wealth of information in focused and easy-to-use reports.
Secondly, the implementation HCM department and the executive suite should define metrics that are meaningful to the company so that the provider can develop the resources to deliver them. Lastly, a “dashboard” with all relevant info and reports can be provided to the main decision makers. Eventually, HR can consider and develop more sophisticated tools for analyzing a greater variety of information.
Making Informed Decisions Today and Tomorrow
Workforce analytics can be incredibly powerful in the current recession as it helps determine program cuts, workforce reductions and talent re-allocations. Similarly, the users of these systems can model scenarios when the economy begins to turn around. In many cases, these “analytics pioneers” will have a better understanding of the variables involved as they will be the ones including them in the models and the studies.
Having accurate analytical studies and models at your fingertips places one in a powerful and influential position. Not only can you explain why some business occurrence happened but you can also make some very good predictions as to what will follow. It is indeed a powerful place to be.
Are You Ready for Analytics?
Forward looking, HCM directors have already changed their attitudes towards analytics and embraced a culture of modeling and predictive study. Instead of merely documenting and evaluating past behaviors, they are actively dissecting the current trends and behaviors in their organizations through the use of analytics. The trend is only gaining ground and any company that hopes to remain competitive should consider implementing an HCM analytics system.
