For some time now, analytics has been a hot topic within the HCM world.
Everyone talks about it, but what does analytics really mean, and how does it tie-in to the actual planning processes your organization undertakes every day?
At its core, analytics is about the ability to take data, apply insight, and turn it into actionable information. It’s not just throwing data over the wall, it’s translating raw data into something that can be used. And it’s clear that organizations are hungry for analytical data to drive their workforce planning processes.
Early findings from Aberdeen’s latest survey on Core HR and Workforce Management shows that after controlling labor spend, the need to improve workforce planning is the number one driver of their total workforce management efforts.
Despite this need, however, about a third of organizations still described their workforce planning process as merely an exercise in headcount planning.
In order to truly create responsive, effective operational workforce plans, organizations need to take into account not just headcount needs, but the skills and capabilities required by these workers and an understanding of the associated labor costs and financial performance of these workers.
So what should organizations do to strengthen the links between analytics and planning?
First of all, organizations need to link their data sources.
The same early findings data cited above also found that only about half of organizations integrate workforce data with financial data. Without this linkage, organizations operate in the dark when it comes to understanding the impact their workforce has on their financial performance. And they will not be able to quantify the financial impact of workforce performance.
Aberdeen’s previous research on HCM analytics found that Best-in-Class organizations were more than twice as likely to provide workforce data dashboards to executives and line-of-business leaders.
This is the essential second step that turns data into analytics – putting information into a format that the people who need it can use. It’s not enough to simply say to a business leader “here’s the data.” It’s important to provide them context and an easily digestible way to incorporate analytics into their ongoing decision-making.
Perhaps most telling, the new Core HR and Workforce Management survey has found that about half of respondents so far say labor budgets are set annually based on headcount, while the other half say they are updated more frequently based on business performance data.
As our analysis of this data concludes, it will be interesting to see how business performance is impacted by this ability to be more dynamic with labor budgeting. This kind of integration not only helps organizations create their workforce plans, but it monitors and improves them as marketplace realities unfold – the ultimate goal for linking analytics and planning.