Tuesday, April 28, 2009

Workforce Analytics

When I was actively working in the Marketing Research domain, I designed and programmed a lot of surveys on employee satisfaction/morale/happiness for US companies. That was around 2004, I guess a lot has changed then.

I came across this article on Workforce Analytics by Becca Goren on the SAS website. It sounds very promising and it seems to be THE RIGHT THING TO DO. I have summarized the article and edited it a bit for my blog.


Most organizations today do not track who is critical, who will likely leave, or why they will leave, so there’s no opportunity to develop effective strategies to retain critical employees.

Workforce analytics is the missing link in today’s business strategy. It is imperative for organizations to know how to attract, grow and retain these employees, as well as sustain the already seasoned professionals that bring depth and value to the organization.

Everyone across an organization can play a role:
• Business managers need to identify pending skill gaps and a pipeline for tomorrow’s leaders.
• Finance managers need to determine costs related to vacancies, overtime, outsourcing, recruitment and loss of critical skills, and then model strategies to address these issues.
• HR needs to spot trends and develop strategies to support changing workforce demands while partnering with business and finance managers to determine the best organizational structure/restructuring to address change.

Five ways to optimize the organization through its work force

1. Align work force with business goals:
• Forecast the amount and types of talent required to execute business strategy.
• Gain full information needed to make decisions for tomorrow.
• Manage the work force to drive the organization to meet its goals.
• Identify specific talent gaps.

2. Address workforce demands at every stage of the talent life cycle:
• Acquisition: Match the right employee with the right skills at the right time at the right cost.
• Growth: Develop skills for today’s star performers and tomorrow’s leaders.
• Retention: Proactively respond to changing workforce demographics and trends.

3. Identify and mitigate risks:
• Analyze the past and look forward to spot trends in key factors related to voluntary termination, absences and other sources of risk.
• Determine the impacts of organizational change on employee performance.
• Predict where vacancies and leadership needs are likely to occur.
• Understand workforce supply-and-demand patterns, and create strategies with additional labor sources to meet that demand.

4. Plan for business change, such as mergers, acquisitions and downsizing:
• Model what-if scenarios of potential effects across divisions and geographies.
• Make strategic decisions to reduce the risk of losing good employees and keeping redundant or underperforming ones.

5. Synchronize financial and operational workforce strategies:
• Expand background for each employee to look beyond salaries and general workforce costs for a more granular understanding: absences, overtimes, training costs, headcount, salaries and other compensation.
• Develop a defensible position on how costs drive value for the organization.

But my biggest question is how many organizations actually put these into practice?


Nikesh Srivastava said...

I would like to thanks author for this blog. I feel most of companies will adhere to all best practices mention in this blog to getting right talent and retaining them for a long time.

Mike said...

GREAT post! Organizations should absolutely follow the five optimization suggestions outlined in this post to best leverage their talent analytics to achieve what's best for the business. Great stuff.

Jesse said...

I am an HR intern at an oil company in Texas, and I think that there are companies that are large enough that to be effective and sustainable, they have to be doing this to some degree, but most often it would be in the HR department, with someone working on workforce analytics in collaboration with recruiting or talent management.