Shari would like to thank Mishell Meyer for her contribution to this column.
Although customers are number one, employees are a close second. Without customers, there is no business. Without employees, there is no one to serve the customer. Satisfied employees keep your customers satisfied. That is why workforce (i.e., human resources) insight is important. This column, the first of a two-part series, discusses why workforce insight and analytics are relevant to 360-degree insight.
Employee data such as demographics, training history, compensation and performance is commonly captured and reported for business management. Employee-data averages, costs and summaries are also often captured and reported. The awareness of this type of data can ensure diversity, maintain competitive compensation and retain a market-relevant workforce. However, what if you want to increase your workforce diversity, capitalize on core competencies or focus on hiring specific skills? Suppose you want to reduce replacement costs by retaining more employees for longer periods of time. During a crunch, how do you motivate employees to work longer hours or go the extra mile? These are examples of strategic questions an organization should continually ask about its workforce and human resource processes.
Determining answers to these strategic questions goes beyond reporting and simple analysis of trends, ratios and exceptions. Analytic applications tailored for workforce analysis can enrich existing statistics and facts via a data warehouse and provide insight that is forward-looking and actionable. Comparisons, benchmarks, what-if analysis and scorecarding are common workforce analysis techniques. Closing the workforce insight loop and leveraging workforce analytics to set hiring goals, determine compensation levels or develop training plans enable an organization to account for, satisfy and shape its workforce.
Workforce insight tends to focus on several key areas:
Recruiting: An organization wants to hire the "best" candidates. Awareness of the required recruiting mix and skills can increase hiring effectiveness and decrease recruiting costs. During the interview, it is critical for the right recruiter to ask the right questions in the right order. Does a specific recruiter statistically advance more candidates? What is the average tenure of the candidates hired? Are you paying signing bonuses for all types of candidates in all locations? To improve the recruiting process and your recruiters' skills, you must leverage workforce data and ask strategic questions.
Compensation and Benefits: After you hire employees, you must retain them. If they are the "best," they are worth keeping. However, how much is too much? What are position salary ranges? What percent of compensation is benefits-related? How much does healthcare cost? Although compensation and benefits are popular topics among employees and employers alike, these metrics are usually a second priority for workforce insight behind common workforce demographics and headcount.
Competencies and Training: Skilled and motivated employees are more efficient, yet training costs need to be weighed against the benefits. How many resources at each level have specific competencies and which level tends to use that skill more frequently? What is the average number of training days per position and how does that compare to the budget? Should an existing resource be retrained rather than adding headcount? Can group-training discounts be leveraged? If providing upfront training, will it allow a project to be completed more quickly than waiting for employees to overcome the learning curve? Competency and training metrics are more easily tied to tangible benefits, but are often some of the first areas cut when budgeting.
Retention and Advancement: An understanding of what it takes to be successful, combined with market relevance and a strong workplace "presence," retains employees and grows leaders. Who is going to advance in your organization and who is not? Which employees hold the organization back who is absent regularly, whose performance is lackluster, which managers are causing other employees to leave? How many times has an employee been passed over for promotion and why? What is the percentage difference between voluntary and involuntary separations? Your organization's recruiting, compensation, training, retention and leadership processes can all be refined with careful analysis of these statistics.
Knowing more about your workforce and understanding options for improving, changing and creating new human resource processes can affect your 360-degree insight in two primary ways. First, understanding your employees' skills, motivations and tendencies will drive their satisfaction. An organization's insight into employee satisfaction should stimulate change. Second, knowing workforce costs and efficiencies and the effect on the bottom line should incent change. Similar to identifying and keeping the most profitable customers, an organization should focus on the motivated and most productive employees.
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