Workforce analytics has featured prominently in many discussions and trend reports, including our Nordic HR 2018 Survey and HR trends in 2020 eGuide. However, what has been lacking so far is a simple introduction to the topic. Here are three things anyone working within HR should understand when planning to embark on their own journey into workforce analytics.

1. Workforce analytics explains business phenomena using people data

Let’s begin by correcting a common misunderstanding: workforce analytics is not like traditional retrospective or legal HR reporting tools that you could get directly from your payroll system for instance.

Workforce analytics is concerned with explaining business phenomena with an analysis of one or more data sources. It’s about finding causalities and patterns as well as using statistical methods to determine how they have evolved over time.

When causalities and/or patterns are identified, it’s time to analyse the forces behind them and to make clear recommendations for action. The management team is thus able to use people data to make data-driven business decisions.

2. Workforce analytics provides tangible measures and recommendations

Usually the discoveries made from the people data are visualised and presented as a story. The last stage is to evaluate the business impact of the recommendations – this should function as the project’s ultimate key performance indicator (KPI’s.) If the recommendations create tangible business value, the project can be considered successful.

You can use workforce analytics with the data you already have and if your existing data needs improving, the process will highlight areas than may need to be improved in future. However, if your team has the necessary experience (HR or dedicated analytics team) you can build forward-looking, predictable scenarios. This allows the management team to plan ahead.

Forward planning can be useful in a range of situations; in planning a basic salary budget, for instance. You might ask: ‘What happens if we increase everybody’s salary by 2%?’ Even more advanced planning might be needed to calculate how the business might be affected if, say, one of the business units were sold to an external investor.

If the recommendations create tangible business value, the project can be considered successful.

3. Workforce analytics supports agile decision-making

Traditional HR reporting struggles to keep up with business demands, because in almost all cases traditional HR reporting bases reports on past data, i.e. ‘what was our headcount on a certain date?’ or ‘how many sick days did we have last year?’ The business landscape changes quickly, hence we need more predictive insights driven by workforce analytics.

Thus companies need more agile methods for collecting, managing and analysing people data. It’s clear that workforce analytics is here to stay – so it’s time to start shaping your own vision of it.

Analytics can be used to generate rapid results (i.e. discovering why there are reoccurring patterns of seasonal absences) as well as for building long-term strategies, such as a plan to attract talent to the organisation and retain it.

Interested in how to get started?

We have drafted an action plan for you to take WF analytics to your organisation. Have a look at our getting started with workforce analytics blog post.

Further reading

Finally, a book that I would like to recommend is “The Power of People” by Nigel Guenole, Jonathan Ferrar and Sheri Feinzig. The book covers how work is changing and how the use of data can create tangible value for the business and add credibility to HR. The book gives you concrete examples and practical recommendations to start the process yourself. In fact, many of my recommendations are based on their work.

That’s it! For any questions or comments, you can contact me. When planning your first steps with workforce analytics, have a look at my getting started with workforce analytics blog post.