Workforce Analytics: What It Is and How It Drives Business Value
Improve workforce planning, employee management, and business outcomes through workforce analytics. Learn how to use data from internal and external sources to track key HR metrics and improve HR strategy.Get a demo
Table of contentsWhat is workforce analytics?Workforce analytics benefits and challengesHow to implement workforce analyticsExamples of workforce analytics in practiceMaximize your people impact with workforce analytics
What is workforce analytics?
Workforce analytics means using a combination of data-informed methods to measure, analyze and improve human resource management. The data is gathered from both internal and external sources and includes a range of applicable HR metrics.
After careful analysis, the results are turned into actionable insights aimed at improving workforce planning and management.
Workforce analytics vs. HR analytics vs. people analytics
While workforce analytics, HR analytics, and people analytics are often used interchangeably, they are not the same thing.
People analytics works with data regarding people, both internal (e.g. employees), and external (e.g. customers).
Workforce analytics works with data related to employees too, but it takes a broader look at work information, rather than focusing solely on people. It also includes data regarding gig workers, freelancers, and part-time workers.
Finally, HR analytics looks at all the metrics related to human resources. It uses people and workforce-related data, but it also includes other processes, such as recruitment, onboarding, or training.
What is workforce analytics used for?
There are several areas in which you can apply workforce analytics.
Retention. Measuring turnover rates and other metrics can help improve retention programs and decrease attrition.
Recruitment. While this isn’t the primary focus of workforce analytics, it is an area that can be improved by using it. The HR team can track the company’s ability to recruit top talent and make suggestions for creating better recruitment programs.
Absenteeism. High absenteeism rates almost always signal a problem within the company. You can use workforce analytics to see how many employees miss work and why, and plan accordingly.
Performance. Workforce analytics will inevitably help you look at employee performance. Use it to gain a better understanding of what motivates people, what helps them perform better, but also what they dislike.
Learning and development. A key component of a positive employee experience, your learning and development programs should keep employees interested and give them plenty of opportunities for growth. By using workforce analytics, you can assess which of your programs are helpful and what you can improve.
Workforce analytics benefits and challenges
Workforce analytics can help you improve business processes and keep employees motivated and happy. But it can come with challenges, especially when your expectations are too high or the process isn’t correctly executed.
Workforce analytics benefits
Using workforce analytics will support you on your business journey and help ensure you reach your goals. Benefits include:
Predict hiring needs
Identify candidates who are aligned with the company’s culture
Decrease attrition rates
Have a clear view of your current workforce that allows you to address talent gaps and needs quickly
Control costs and create a better compensation management plan
Improve your onboarding and offboarding programs
Create better learning and development opportunities, along with upskilling and reskilling when possible
Gauge employee well-being and create a safe environment for everyone
See how you compare to similar companies
Workforce analytics challenges
While it has many benefits, sometimes using workforce analytics can be challenging. Issues that may arise when using workforce analytics include:
Incorrect or incomplete data. Poor or incomplete data will lead to inaccurate results and will derail even the best workforce analytics methodology. Things get even worse when you don’t realize soon enough that the data you have is incorrect. You may base a lot of business decisions on your findings, which will set you up for failure. Always make sure the data you have is correct. Refine and clean data sources periodically, not just when starting your analytics process. Stress test specific data points against other sources and inputs from your colleagues to ensure that you are getting the full, accurate picture behind those metrics.
Keeping up-to-date data silos. Making sure data is always correct is an ongoing effort. That may sound easy at first, but it can take a lot of time and resources depending on your company and the number and size of your data silos. Unfortunately, this is not a step you can skip, or you’ll end up basing your decisions on outdated information. Where possible, it’s also a good idea to ensure that your data sources can connect to one another. Incomplete data, or metrics split across numerous disjointed platforms, can make it much harder to grasp the full picture of an issue or opportunity.
Low budget. Workforce analytics requires some investment. You need to work on convincing executive buy-ins and stakeholders to allocate a sufficient budget to this area.
Outdated technology. Workforce analytics requires up-to-date technology. Without it, you may not see its full benefits in action. The more data you have on your hands, the greater the need for a powerful solution that can help you in your analytics process.
How to implement workforce analytics
Now that you know what workforce analytics is, why you should use it, its benefits, and its challenges, it’s time to move to the implementation phase. You can approach this in several ways.
The most important things are knowing your goals, having the correct data, and reporting the results in a way that’s easy to understand for everyone. Here are a few steps to help you get started on your journey.
1. Establish your goals
Why do you want to use workforce analytics? What are your goals?
Be as specific as possible. Well-defined goals increase your chances of success. You’ll know exactly what to look for and what questions need answering, and you’ll avoid wasting time with useless information.
Plus, well-defined goals make it easier to convince managers, stakeholders, and investors to allocate more budget towards workforce analytics.
2. Gather data
With your goals in mind, you can begin gathering data. Look at both internal and external sources. You want to benchmark against the competition. Of course, you shouldn’t forget about legal factors such as data privacy and security.
3. Analyze the data
Once you have all your data, it is time to move to the analysis phase. How do your results compare to the KPIs? What about your goals? Are you reaching them? What can you improve? Is there any unexpected information? Your answers will help define your future strategies.
4. Report the results
Interpreting, creating recommendations, and reporting your findings is an essential step to the success of your workforce analytics efforts. Use clear and concise language that everyone can understand, regardless of their background.
Examples of workforce analytics in practice
Workforce analytics can support you in reaching various business goals. Here are a few examples of how you can use it in practice.
1. Reducing turnover
When an employee resigns, the company inevitably loses some revenue. The offboarding process requires time and money. Then you’ll need to allocate resources to recruiting someone new, onboarding them, and so on. Wanting to reduce attrition is only natural.
Workforce analytics allows you to analyze data relating to:
Over time, all this will help you see patterns that may help you predict the risk of resignation. By doing that, you can focus your efforts on areas that matter and can make a difference in the employee’s decision.
2. Employee experience
Employee experience is, without a doubt, a key factor to business success. Companies in which employees report having a positive experience are more likely to attract and retain top talent. People are happier and perform better.
Workforce analytics supports you in understanding what can improve someone’s experience in your company, and what might be causing a poor experience. When looking at data, try to find patterns that can help you uncover problems. Perhaps you notice a decrease in engagement or an increase in absenteeism. Can you look at more data until you find out what went wrong?
Workforce analytics won’t always give you the answers on a silver platter. But it will lead you in the right direction and help you get closer to the answers you’re seeking.
3. Employee management
Have you ever wondered what drives sales and customer satisfaction? Would it surprise you to hear that your employees play a huge role in all of it? Their performance, engagement, and satisfaction all impact how well your business is doing overall.
How does workforce analytics fit into all this? It’s simple. By looking at various data metrics, such as personality traits, especially of those employees who interact with customers directly, productivity, time management, and more, you’ll be able to spot patterns that influence business success.
You can make sure employees have all the tools they need to do their job. This will improve customer satisfaction, thus driving more sales, and helping your business grow.
Maximize your people impact with workforce analytics
Workforce analytics takes a broad look at all work-related data. That means people are a huge part of it. People analytics enables you to find answers to mission-critical questions so you can easily make better decisions.
Using analytics, you can identify key leaders in your organization so you can leverage their power and help them grow their career and skills. Tackle workforce planning strategically to make data-informed decisions and create plans that are adaptable, realistic, and will drive success. See what’s working in your talent acquisition process and where you can make improvements to attract high performers.