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Workforce analytics enable smarter decisions
 

Workforce analytics enable smarter decisions

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The whitepaper talks about how your organisation can implement and use Workforce Analytics to enable smarter workforce decisions.

The whitepaper talks about how your organisation can implement and use Workforce Analytics to enable smarter workforce decisions.

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    Workforce analytics enable smarter decisions Workforce analytics enable smarter decisions Document Transcript

    • Ventana Research: Workforce Analytics Enable Smarter Decisions Workforce Analytics Enable Smarter Decisions Finding the Right Tool for Human Capital Management White Paper Sponsored by 1 © Ventana Research 2013
    • Ventana Research: Workforce Analytics Enable Smarter Decisions Table of Contents The Scattered State of Information 3 The Value of Workforce Analytics 4 New Technologies for Workforce Analytics 6 Exploiting the Potential of Analytics 7 The Risks of Spreadsheets 8 Arriving at Smarter Decisions 10 About Ventana Research 11 2 © Ventana Research 2013
    • Ventana Research: Workforce Analytics Enable Smarter Decisions The Scattered State of Information To achieve success in today’s intensely competitive market environment, businesses must take all steps possible to enable their employees to perform at their best and must allocate their workforce as effectively as possible. In Ventana Research’s view, maximizing the efficiency of the workforce is best done by applying analytics to the broadest possible range of data to create the best available information. When this is done, executives and managers will have available complete and accurate workforce information that will guide them in providing the assistance and motivation their people need today to perform and compete effectively. However, acquiring this information often is complicated. Businesses’ employee-related information typically is stored in a heterogeneous array of formats and systems, among them human resources management systems, dispersed across the enterprise. Global companies may for example have several of these systems as well as multiple talent management systems. The need to use data from multiple, often dispersed systems can make the goal of working with complete and accurate information more difficult to attain since the leading source for workforce ana- lytics is a human resources manage- ment system (for 69% of all organi- zations), and this is even more the case (83%) in large businesses with more than 1,000 employees, as our benchmark research on work- force analytics shows. Before an organization can begin to analyze its array of data, it must first collect, integrate and standardize it, which often is a complex and time-consuming process. It’s also potentially an expensive process, particularly in that it can require valuable resources who should instead be analyzing the resulting information and using it to provide recommendations for improvement. 3 © Ventana Research 2013
    • Ventana Research: Workforce Analytics Enable Smarter Decisions Faced with this challenge, busy HR and business managers may choose instead to rely on ready-at-hand sets of data that are incomplete or even incorrect and will lead them to mistaken conclusions. The likelihood that expediency will lead to errors and partial data is increased by reliance on technology that is not designed to deliver the outcomes expected from the investments in analytics. The Value of Workforce Analytics Although the use of analytics is not new in the field of human capital management, most organizations have not taken them sufficiently seriously to develop and use a dedicated approach. They fail to do so at a cost – a cost that forward-thinking organizations recognize: Of the five innovative technologies we investigated in our business technology innovation benchmark research, 39 percent of organizations ranked analytics as their first priority, more than any of the others. The ultimate purpose of workforce analytics is to guide business in using its workforce optimally, so that it is efficient and delivers the best possible performance. To achieve this large goal, businesses must conduct analyses that connect specific workforce metrics, such as employee engagement or employee retention, to their core business information. This should include their specific goals and objectives, such as customer service scores or sales metrics. When this is done – and, in the modern world, increasingly only when this is done – leaders can see the global business effects of HR decisions – the effects of using collaborative onboarding tools on retention rates for new employees or customer service ratings, or how same-store sales are impacted by programs that increase employee retention and the effectiveness of training. Our research on workforce analytics shows that performance matters to businesses: The top three goals that drive businesses to make changes informed by workforce analytics all have to do with optimizing overall workforce performance. These goals are to improve their business processes, improve their decision-making and improve the productivity of their workforce. The ultimate purpose of workforce analytics is to guide business in using its workforce optimally, so that it is efficient and delivers the best possible performance. 4 © Ventana Research 2013
    • Ventana Research: Workforce Analytics Enable Smarter Decisions Merely deriving workforce analytics from what has happened in the past, though, is not sufficient to deliver future competitive advantage. The relatively new technology of predictive analytics can help maximize the potential of future workforce performance. It can do so by determining the probability of retaining valuable contributors as a factor influencing workforce performance, for example, or the achieving of specific performance targets. Such analyses are invaluable in enabling HR to make better-informed decisions about probable future staffing needs and lower workforce costs over time by predicting ebbs and flows. For example, using predictive analytics retailers could better manage staffing requirements to avoid long checkout lines or carrying excess personnel capacity at off-hours. For the business to build effective workforce analytics, managers must identify, track and measure the information that is most relevant and most important. Our benchmark research on social collaboration and human capital management finds that the five most important work- force metrics are employee satisfac- tion and engagement, retention rates, leadership development, length of employment, and training and development. These metrics, combined with other business infor- mation, will enable HR to act more knowledgeably and more deftly to deliver value to the organization and fulfill on the promise of human capital management. On the other hand, failing to measure employee satisfaction and engagement can result in unwelcome surprises regarding turnover and subpar performance – areas in which surprise is hardly desirable and into which every organization serious about the quality of its performance would like to have insight. 5 © Ventana Research 2013
    • Ventana Research: Workforce Analytics Enable Smarter Decisions New Technologies for Workforce Analytics As the workforce evolves, so does the nature of the processes that will enable the most effective management of an organization’s human capital. One notable change is the evolution of the technologies supporting the analytics being discussed here. Systems now available offer powerful capabilities that enhance insights, broaden access to those insights and lower costs for their use anywhere in an organization. More sophisticated big data technologies provide the means to store and analyze larger data sets combining data from various human resources and talent management systems and other enterprise systems – an array of systems that previously were inaccessible or too expensive to explore. As well, predictive analytics can make it possible to reliably predict future opportunities and challenges that should be addressed now rather than later. Cloud computing can reduce infrastructure complexity and improve access to systems and the ability of the business to manage their use. Like other cloud-based systems, workforce analytics in the cloud typically are managed by the vendor, relieving in- house IT staff of that burden and its associated costs. The rise of business mobility also is having a pervasive impact on human capital management. Nearly every modern human capital management application – human resources management systems, talent management, workforce management and workforce analytics – has been configured for and deployed on one or more mobile platforms today. As a result, workforce analytics users are now able to access and work with ana- lytics on their mobile platforms. Our research on next-generation business intelligence research shows that already three in five companies have deployed analytics to employee smartphones, and 30 percent have deployed it to tablets; more plan to do both in the future. Using mobile technology to provide secured access to workforce analytics at any time and any place can increase usage and thus the potential resulting value. As the workforce evolves, so does the nature of the processes that will enable the most effective management of an organization’s human capital. 6 © Ventana Research 2013
    • Ventana Research: Workforce Analytics Enable Smarter Decisions Social collaboration, another of the business technology innovations we track, will become increasingly important to HR’s role in the business. Empowering managers and workers to see and interact on information from workforce metrics can help expedite the resolution of issues and lead to the discovery of new opportunities for improvement. Social collaboration vastly improves the capability of members of the workforce to engage with one another and makes it far easier to work collaboratively towards specific goals and objectives. As social technology becomes a standard tool used for a range of workforce processes and concerns, from recruiting to employee satisfaction, businesses should be able to measure their impacts in HR- related areas like recruiting by tracking key metrics that report the effect social media is having. In our benchmark research on social collaboration and human capital management, the metrics that par- ticipants said they rely on most to measure the value of external social media sites have to do with the recruiting process; the top three are quality of hire (cited by 79%), cultural fit (66%) and the candidate’s experience (59%). We believe that organizations that embrace these new technologies that support workforce analytics will be more able to leverage the resources and potential of a workforce and empower its members to be maximally productive. Exploiting the Potential of Analytics The array of today’s in-depth analytics may not be familiar to all HR professionals, but they will readily recognize the value of the purposes they can be put to. For example, finding expertise fast is increasingly important in today’s competitive environment. Competing effectively often means gaining access to particular skills on short notice; thus, knowing all the skills in the workforce is an asset. As teams form quickly for new projects, insights from workforce analytics can help 7 © Ventana Research 2013
    • Ventana Research: Workforce Analytics Enable Smarter Decisions leaders find the employees whose skills match developing needs. For example, someone with a hands-on accounting background might be the best person to have on a client call with an accounting firm. But simply choosing that person by job title or department is as likely to miss as hit. Analytics can enable the company to find the right skill on short notice as needed to start a new project, approach a new market or establish rapport with a specific customer. Similarly, workforce analytics aids knowledge sharing by locating people who can provide advice to other employees when they need it. Due to the complexity of modern organizations, many knowledge management exercises have fallen short of connecting experts to those who can benefit from the connection. As numbers of experienced members of the workforce near retirement, companies face unprecedented losses of knowledge if it is not identified and shared. Workforce analytics can help identify pockets of skills and help manage knowledge within an enterprise before it is lost, as well as identify the skills and knowledge that will be needed for the future. An organization’s ability to tap into its collective insights is now an ingredient to stay abreast of market changes and perform effectively. The Risks of Spreadsheets To collect and analyze information about their workforces, many businesses depend on software that is conveniently available and familiar, particularly spreadsheets. But individual spreadsheets and reports are cumbersome to correlate and may contain inconsistent data. Using them in analysis is risky, and the results can lead managers to make mistaken decisions about the workforce. Nonetheless, spreadsheets are wide- ly used in business, a situation that has significant implications to business. In our workforce analytics research nearly all (96%) participants said they use spreadsheets for analytics universally or regularly. In our next-generation workforce 8 © Ventana Research 2013
    • Ventana Research: Workforce Analytics Enable Smarter Decisions management research, nearly all (92%) organizations reported using spreadsheets at some level to manage their core workforce management information. Yet almost half of those said that the use of spreadsheets makes it difficult to manage their workforce. It has become increasingly clear that the convenience and versatility of spreadsheets is more than offset by the frequency of errors resulting from manual data entry and lack of data integrity. Our research repeatedly bears this out. In one instance, our benchmark research on performance management for talent management found that fully 61 percent of organizations using spreadsheets uncovered errors in the spreadsheets, and more than one in three (37%) said those errors led to incorrect performance reviews. Correcting such errors requires managers and HR staff to repeat work, contribute to wasting the time of valuable resources, and increases the legal and reputational risk to the business. In our research, one in three organizations that use spreadsheets for compensation management reported occasional errors that led to incorrect payments, and 5 percent reported many errors in payments. All of these problems using spreadsheets can damage a business’s reputation among partners, suppliers and employees as well as undermine its cash flow and general efficiency. To minimize such risks, a business needs a centralized approach that avoids the pitfalls of spreadsheets. Ventana Research recommends use of a dedicated analytics system that can eliminate the risks detailed above as well as offering access and security controls. Such a system also includes key capabilities that can address the needs of HR and business while providing the manageability and adaptability needed by the enterprise as well as critical audit controls, validation of business rules and effective backup procedures. All of these requirements are available in enterprise-class analytics systems that can leverage existing human resources and talent management applications. 9 © Ventana Research 2013
    • Ventana Research: Workforce Analytics Enable Smarter Decisions Arriving at Smarter Decisions Using workforce analytics can provide all levels of an organization with improved visibility of information to make critical business decisions in a timely way. Moreover, using the array of analytics available will improve the ability of managers and executives as well as employees to act in the organization’s best interests. With sharper insights into how their teams are functioning, managers become better coaches and guide better engagement and performance. By adopting an approach to analytics that combines employee information with business data, HR and executives can establish meaningful metrics that will enable them to evaluate more usefully the impact of HR investments for the entire workforce. Using behavioral and predictive analytics, line-of-business managers and HR can anticipate future workforce gaps and identify investments needed to achieve their unit’s and the business’s goals. The use of mobile and social collaborative technologies adds a new dimension to the potential of workforce analytics. These mobile and collaborative capabilities enable much broader access to workforce analytics as well as their more effective use. Identifying and using these tools can enable everyone to be more effective and make effective decisions for achieving the goals of human capital management. 10 © Ventana Research 2013
    • Ventana Research: Workforce Analytics Enable Smarter Decisions About Ventana Research Ventana Research is the most authoritative and respected benchmark business technology research and advisory services firm. We provide insight and expert guidance on mainstream and disruptive technologies through a unique set of research-based offerings including benchmark research and technology evaluation assessments, education workshops and our research and advisory services, Ventana On-Demand. Our unparalleled understanding of the role of technology in optimizing business processes and performance and our best practices guidance are rooted in our rigorous research-based benchmarking of people, processes, information and technology across business and IT functions in every industry. This benchmark research plus our market coverage and in-depth knowledge of hundreds of technology providers means we can deliver education and expertise to our clients to increase the value they derive from technology investments while reducing time, cost and risk. Ventana Research provides the most comprehensive analyst and research coverage in the industry; business and IT professionals worldwide are members of our community and benefit from Ventana Research’s insights, as do highly regarded media and association partners around the globe. Our views and analyses are distributed daily through blogs and social media channels including Twitter, Facebook, LinkedIn and Google+. To learn how Ventana Research advances the maturity of organizations’ use of information and technology through benchmark research, education and advisory services, visit www.ventanaresearch.com. 11 © Ventana Research 2013