Imagine a large national telecom merging with a regional provider to create a marketplace powerhouse with resources that significantly overlap. Or, envision a global bank merging with a complementary global organization to create a financial services behemoth, resulting in vastly different workforce compensation structures and cultures. Finally, think about a start-up shoe manufacturer that just had its newest product displayed on a hit television show and now it has more orders and overtime than it has ever experienced.

Each of these organizations has an human resource challenge that must be solved. Regardless of the nature of the challenge, upfront analysis can be invaluable to providing the resolution. This column, the second of a two-part series on 360-degree workforce insight, discusses several popular workforce analytic techniques and why a deeper understanding of your employees is relevant to both your organization's human resource function and to 360-degree insight. What-if analyses, scorecards and dashboards, and surveys are some of the business intelligence techniques commonly used by organizations today to assess their workforce. Each technique has a unique purpose and can be leveraged iteratively.

Workforce Analytics Techniques

What-if analyses capitalize on a data warehouse. Rules and scenarios are defined based on data gathered in the warehouse and tested to determine a strategic/tactical action. For example, what if I keep my sales/marketing resources in Region A and centralize all other functions? Or, what is the compensation cost impact of bonuses versus overtime, dental coverage versus profit sharing or variable pay versus base salaries? Or, where do I add resources to increase orders by 200 percent? By setting limits, specifying variables or including dependencies, what-if analyses enable you to quickly assess alternative actions based on a thorough understanding of workforce impacts. What-if analyses are usually used by middle managers working with data on a frequent basis.

Scorecards and dashboards focus on workforce statistics and performance metrics. They also integrate data types (workforce, financial, customer). Scorecards typically track a few key metrics and indicate significant changes, improvements or declines. Dashboards, while similar, are more likely to summarize important news, key issues and profitability impacts. Regardless of whether the scorecard is customized or "out-of-the-box," its metrics are grouped in a hierarchy to show critical success factors, strategies and vision. It sets targets and defines metric scoring capabilities. Whether they track and measure a headcount reduction, compensation goal or inventory supply target, detailed scorecards and dashboards monitor progress over time by a variety of dimensions such as geography, business unit, product or customer. Scorecards and dashboards are typically used by executives.

Surveys help you understand how your organization is performing against internal goals, competitors or the general marketplace. Internal employee satisfaction surveys, coupled with customer satisfaction surveys, can highlight areas for improvement and actions to take. For example, is it obvious where someone calls to get technical help or is there redundancy in resources/roles? Do employees feel they are compensated fairly and exert comparable effort? Are employees frustrated when customers complain about back orders? Do not undertake internal surveys unless you are committed to act upon the findings!

External surveys, on the other hand, are usually used for compensation analysis. Benchmark data, industry averages and other filtered information can be purchased periodically. Used as input for what-if analyses, external survey data indicates whether your organization's compensation packages are competitive. If the surveys provide enough data, you can answer questions. For example, if you changed your workforce model to align with market norms, would there be financial benefits? What morale impact and satisfaction level would be acceptable? Surveys are most often used by human resources.

Closing the Workforce Loop

Economies of scale (cost/resource reduction) are often achieved through the acquisition of complementary organizations. In our telecom example, post-merger workforce overlaps must be identified to determine what skills are needed for the future. Workforce data is merged and analyzed to build the optimal organization based on merger goals such as location, compensation and competency requirements. In our financial services example, the appropriate compensation for all employees must be defined, considering both tenure from the individual companies and roles in the newly merged organization. Extensive what-if analyses are conducted to ensure that the efficiencies and benefits from the previous compensation plans are leveraged, and redundant and unnecessary costs are eliminated.

However, the new organization's headcount, skills and compensation are still only part of the analysis. What is the severance cost of the displaced workforce? In this planning process, survey data can help. For example, you could use internal survey data to target the workforce areas that may provide the most positive post-merger dispositions.

Our start-up shoe manufacturer, on the other hand, requires substantial overtime and an increased commitment from employees to ensure customers' orders are being filled. Executives want to know that employees are operating at optimum efficiency, and employees want to know that their extra efforts are noticed. Internal employee surveys can help monitor morale while scorecard productivity metrics help monitor the bottom line.

The combination of workforce and customer analytics can provide 360-degree insight into the human element of your organization. If you don't understand how morale and competency affect service, your organizational insight is limited. 360-degree insight, including workforce insight, helps you maximize corporate performance.

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