How To Use Workforce Analytics: Metrics + Workflows Explained
Workforce Analytics

How To Use Workforce Analytics: Metrics + Workflows Explained

Today’s businesses are more data-conscious than ever. Decision-makers crunch numbers before launching a new product, while planning marketing campaigns, and when considering budget cuts.

However, another area of business can benefit from some number crunching: Businesses are now using analytics to gain insights into their workforce. You’ll find a variety of reasons to use analytics to measure your workforce, but first, it can help define workforce analytics and show how it can be used.

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What is Workforce Analytics?

Workforce analytics is the process of collecting human resources information to gain actionable insights. Employers often use analytics software to measure how HR efforts are helping meet their overall business goals.

Workforce analytics is different from people analytics in that it looks at the overall HR structure rather than the employees and management team. It typically focuses on issues like worker performance, employee turnover, recruitment and staffing efforts, training, and worker compensation.

Why use Workforce Analytics?

Your workforce is an important part of day-to-day business operations. A strong team can help boost productivity and keep you on track to meet your goals. Using workforce analytics, you can optimize your talent management processes, identifying ways to attract and retain the best professionals for each position.

Workforce analytics software can take this even further, monitoring trends on an ongoing basis. Here are some reasons to put workforce analytics to use in your organization:

1. Improve employee engagement

Data collection is a great way to measure your employee engagement levels. Why does that matter? An engaged employee is more productive, calls out sick less often, and contributes to higher profits. You’ll also spend less time hiring since happy employees are less likely to leave for a different job.

Workforce analytics looks at the overall employee experience. You might gather enough information to measure burnout risk, for instance, or pinpoint redundancies in your staffing.

2. Track employee performance

Most employees don’t constantly work under the watchful eye of a direct supervisor. That can make tracking performance tough. Workforce analytics helps you gather employee data to see where improvements can be made.

One of the best things about gathering people’s data is that it helps you create benchmarks. As your organization grows and changes, you can look back on those data points to measure workforce performance.

3. Track employee productivity

Many businesses track productivity by noting how much idle time employees have. The move to remote work has made it clear, though, that data-driven productivity analysis can be far more accurate than gut instinct.

The right workforce management tools can help you with your business’s overall strategic planning. By reviewing the data, you can accurately assess your team’s performance and see where changes are needed. You can then set goals to maximize each team member’s talents to get peak productivity.

4. Prevent employee turnover

Although estimates vary, replacing a departing employee isn’t free. You’ll spend money and valuable time recruiting and training a new hire, and that doesn’t include the decline in morale for the employees who take on the departing employee’s workload.

Workforce analysis can help you identify high areas of turnover in your business and make adjustments. You can also gain valuable information that can help with succession planning.

5. Increase employee retention

Employee retention is an ongoing issue for businesses in an era of decreasing job tenures. Finding a long-term employee can be challenging even for businesses that create a positive work culture and engage workers.

Finding long-term employees starts during the hiring process, and that’s where workforce data can help. Using analytics, you can enable predictive decision-making to identify potential candidates most likely to be with your company for over a few years.

What’s the main difference between Workforce Analytics and HR Analytics?

Human resources analytics, also known as people analytics, focuses on the employees working for an organization to improve internal HR practices. Workforce analytics, on the other hand, focuses on the workforce as a whole, looking at worker output and efficiency. The goal of workforce analytics is to help a business reach its overall goals.

What are the main types of workforce analytics?

There are many types of workforce analytics. Here are four that are common in most organizations.

  1. Descriptive Analytics: Focuses on understanding what happened in the past. It involves collecting and analyzing historical data about your workforce, such as employee demographics, performance metrics, absenteeism rates, and turnover statistics. The goal is to paint a picture of your current workforce makeup and performance.
  2. Diagnostic Analytics: Delves deeper into understanding why things happen. It analyzes past data to identify trends, correlations, and root causes of issues like high turnover or low productivity. By uncovering the “why,” organizations can start developing solutions for improvement.
  3. Predictive Analytics: Forecasts future trends and outcomes. It uses historical data, combined with machine learning and statistical models, to predict things like employee turnover, skill gaps, and potential performance issues. This allows organizations to proactively address challenges and make informed decisions about talent acquisition and development.
  4. Prescriptive Analytics: This is the most advanced type, going beyond prediction to suggest specific actions. It uses various analytical techniques to recommend solutions based on predictive analytics insights. For example, it could suggest targeted training programs, performance improvement plans, or adjustments to recruitment strategies.

In addition to these four main types, workforce analytics can be further categorized based on the specific focus areas, such as:

  • Talent Acquisition Analytics: Analyzing data to optimize hiring processes, identify top talent, and improve the candidate experience.
  • Talent Development Analytics: Analyzing data to track the effectiveness of training programs, measure skill development, and identify high-potential employees.
  • Compensation & Benefits Analytics: Analyzing data to optimize compensation packages, assess the effectiveness of benefits programs, and ensure pay equity.
  • Employee Engagement Analytics: Analyzing data to understand employee sentiment, identify drivers of engagement, and improve workplace culture.

Understanding Workforce Analytics Metrics

Before you can put analytics solutions to use, you’ll need to know exactly what to measure. Below are some of the most critical metrics.

Employee Turnover Rates

What’s your average employee tenure? This information can be crucial to understanding worker morale. 

  • To calculate your turnover rate, divide the total number of departing employees by your average employee numbers. 
  • Multiply the result by 100 to express it as a percentage. 
  • If you have 1,000 employees and 34 separations, the calculation would be: 34 ÷ 1,000 = .034 x 100 = 3.4%.

Diversity Ratios: Are you meeting your diversity, equity, and inclusion (DE&I) goals? Workforce analytics is a solid method of keeping an eye on your ratios. Data analysis can help you ensure your recruiting efforts are creating a diverse workforce.

Employee Engagement Scores: Human capital management (HCM) uses tools like employee engagement surveys to discover just how engaged each employee is. You can add this metric to your set of workforce analytics tools. If the employee surveys are anonymous, employees will feel free to be open with both complaints and praise.

Typical Career Path: Ideally, some of your current employees will be your future management team. This metric looks at the typical career path of a worker in your organization. Are managers often promoted from within or hired from outside? What opportunities for advancement does an employee have?

Training Opportunities: Education and training also serve as investments in your team. With this metric, you gain visibility into whether employees have learning opportunities, either through on-the-job training or outside courses. More importantly, they can determine whether employees take advantage of any opportunities you provide.

Salary Distribution: Pay equity can be a big factor in employee engagement. You can easily crunch the numbers to determine how pay is distributed among your workforce and whether compensation is based on years worked, skill level, job difficulty, or other factors.

The Benefits of Workforce Analytics for Business Leaders

Whether you’re a small business with a few employees or a large corporation with a full HR department, workforce analytics can help your leadership team. Here are a few ways workforce analytics benefits a business’s top stakeholders.

Supporting Business Performance and Goal Achievement

Your workforce is key to achieving your goals year after year. The more buy-in you can get from your teams, the more cohesively you’ll work together to move your business forward. 

Automation can help maximize your workforce analytics efforts. With the right tools, your leadership team can monitor your metrics and ensure that any changes you make are moving you in the right direction.

Providing Real-Time Dashboards for Monitoring Key Metrics

Things can change quickly. The data you gathered last year might be out of date by the time you schedule another workforce study. That’s where real-time analytics can help.

With the right tools in place, you can monitor the most important metrics continuously. When you log into the system every day, up-to-date numbers will be displayed. This can equip you to react quickly to any sudden shifts.

Making Data-Driven Decisions to Drive Organizational Success

In a data-driven business world, it’s more important than ever to rely on cold, hard facts. Analytics gives you the information you need to make objective decisions.

Today’s analytics don’t just help you study past and present behavior. Using the information it gathers, solutions with built-in predictive analytics can show you what’s ahead for your business. This can help you prepare to build a future workforce that will hit all the right metrics.

What to look for when evaluating Workforce Analytics Software

  1. Data integration: Can it connect with multiple data sources like HRIS, payroll, time and attendance, and performance management systems?
  2. Data security & privacy: Does it offer robust data security features and comply with privacy regulations?
  3. Data visualization & reporting: Does it provide user-friendly dashboards, reports, and visualizations for easy data exploration?
  4. Types of analytics: Does it offer all the analytics types you need, such as descriptive, diagnostic, predictive, and prescriptive?
  5. Pre-built dashboards & reports: Does it offer pre-built dashboards and reports for common workforce metrics or allow for custom creation?
  6. Advanced features: Does it include features like AI-driven insights, scenario modeling, and workforce planning tools?
  7. User interface: Is it intuitive and user-friendly for people with different levels of technical expertise?
  8. Accessibility: Does it offer accessibility features for users with disabilities?
  9. Scalability: Can it handle the growing data volume and user base of your organization?
  10. Integration with existing systems: Can it integrate seamlessly with your existing HR and other software systems?
  11. Vendor support & training: Does the vendor offer adequate support, training, and documentation?
  12. Cost: Does the pricing model align with your budget and needs?

Implement Workforce Analytics with Teramind

Managing business outcomes is an ongoing challenge, but technology can help. Workforce analytics can give businesses and HR professionals the tools they need to manage the lifecycle of each employee’s tenure from start to finish and increase productivity and morale.

Teramind offers workforce analytics tools that help businesses thrive.

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