In The Future of Work, we explore how companies are transforming to stay competitive as global collaboration becomes vital.
HR departments around the world are embracing digital transformation to reshape business operations and address their future needs in an ever-evolving work world. Cloud-based Human Capital Management (HCM) platforms continue to grow expansively. Every company has implemented some application designed to improve employee experience, training and development, performance, benefits and compensation, and more. This has led to an explosion of data: Organizations of all kinds have a larger number of programs and applications feeding them more information, covering a wider array of metrics, than ever before.
All this data can significantly boost your business performance, but only if you have the tools to properly analyze it to find meaningful insights. Seventy-four percent of respondents to a recent PWC survey plan to increase spending on HR tech in 2020. The right platform will empower you to correlate multiple HR and other business data systems to gain a fuller understanding of your workforce’s wellbeing, engagement, talent, and performance. It will also give you access to advanced technologies like predictive analytics, which can help you get ahead of trends, alert you to staffing issues, skill gaps, and market fluctuations, and provide guidance in an uncertain world.
Evolve to correlate data across systems
All that talk about the volume of data flooding into HR teams can sound overwhelming, but there is good news! In the last five years, the number of HR professionals with data analysis skills has increased by 242%, according to a 2020 survey by LinkedIn. That means that there’s probably someone in your HR org who can help you get more from your data right now. Or, if you know you’re missing this crucial player, odds are good you can find a new teammate who can bring HR acumen and data skills to the table.
Even with this uptick in HR experts who know how to work with data, only about 29% of professionals are taking advantage of insights from people analytics. One reason for this is that many organizations have not progressed beyond simple reporting to applying more advanced analytics of seeking trends and generating predictions. Bottom line: You need a mature people analytics program to really impact business outcomes. That’s right! We’re not just talking about making life on the HR team easier; people analytics can directly affect business growth in a variety of ways, from knowing how to staff your teams to maintain excellent customer service and maximize revenues, to identifying exactly the type of profile to hire to meet future business needs and more.
Understanding your employees
More data does not automatically guarantee a better understanding of your current employees and their needs. Combining the right HR analytics system with the right players who can make sense of it is where the magic happens. Then you can focus on what matters and what changes to make to build a better future for your colleagues and your company. HR professionals are the key to connecting human reality with key learnings from data.
Mike McQuarrie, Digital Practices Leader at Buck, a Toronto-based HR consulting firm and Sisense customer, sums it up like this: “We need to take a broader view, and that’s where analytics will be key. So by taking the feelings from the surveys and combining them with the facts from the analytics, we can make the metrics a lot more tangible and a lot less squishy for senior leadership.”
If you can understand the causes of employee attrition and where they are occurring within the company, you’ll be able to address turnover and create targeted and effective employee retention programs, turning your employee dissatisfaction into action.
People analytics can also help HR departments attract and retain the best talent. Building a better workforce with analytics means identifying who your best hires have been or will be, picking currently-favorable or up-and-coming locations, creating competitive compensation packages, and recognizing the skills needed for business growth.
Transforming the employee experience
One of the main goals of any HR department is reducing employee attrition. While even the best employees inevitably come and go, this fluctuation can be very costly for an organization, accompanied by a loss of insider knowledge and drop in morale, among other negative impacts. The right people analytics can help prevent attrition by identifying areas where employees are most engaged.
“There’s a general consensus that if you have a highly engaged workforce, you’re going to experience lower turnover,” Mike adds. “You’ve got people that are all willing to travel in that same direction and less likely to get out of the boat.”
On the employee side, engagement can look like participating in company training and activities like happy hours or workout classes (virtual or in-person). From the employer side, investing in employee training and development are important ways to drive engagement.
Higher engagement means higher levels of productivity, profitability, and output quality. At a baseline, you need analytics to even begin to understand your workforce’s level of engagement. However, as you expand the reach of your BI platform across your organization, the added value from connecting to other datasets and correlating across systems is where analytics really starts to add insights to the employee experience. From here, better decisions can be made to enhance experiences and lower attrition rates.
Remove guesswork from staffing strategies
The year 2020 will forever be remembered as one of countless ups and downs for companies of all sizes and specialties. While it’s true that the business environment changed dramatically, and rapidly, and swift pivots were needed and executed under incredibly challenging conditions, in truth, layoffs and furloughs happen cyclically in business. How companies handle these ups and downs is crucial.
The healthcare sector has been particularly affected by the unpredictable events of 2020. Some companies have had to pivot quickly to keep up with their projected goals and earnings. One of Buck Consulting’s clients runs a network of six hospitals in a major urban area. They were estimating lost revenue of upwards of $1 billion for the balance of 2020. Using Sisense to power their analytics, Buck was able to help that client, and others, save money and gain stability. The analytics infomed cost optimization by, for example, figuring out when to substitute generics for brand-name medications, predicting demographic trends and plugging in that data to optimize insurer fees, and by deciding on the best time to reschedule elective procedures that were deferred due to COVID-19. Moreover, applying people analytics to staffing capacity, training, wellbeing/burnout can have a direct impact on patient care outcomes.
People analytics: Powering better decisions
As the field of people and HR analytics evolves, it’s giving leaders better visibility into their most valuable asset: Their employees. The right analytics can show you how many employees are leaving and why. Identifying trends, for instance, that as employees reach a certain tenure, they run a higher risk of leaving the organization. This could in turn trigger an alert when a certain percent of the organization is approaching this tenure threshold.
With this knowledge at hand and notifications set, workflows can be designed to notify the relevant managers and recommend programs to counter the possibility of turnover. Based on previous success rates, certain managers may opt to engage in programs to try to retain their top talent. Or if a decision is made to cut losses on a particular worker and let them churn, the leader could open a headcount to recruit replacements, based on an ideal profile that was created using a knowledge graph.
Organizations are all at different stages on their analytics maturity journey, with a third still using ad hoc reports that point users back at what happened, instead of guiding their future actions. One way to thwart this is for companies to start their people analytics journey with the most pressing business questions and evolve their analytics maturity from there. Those that are “more mature in workforce metrics are more likely to be effective at sensing internal and external changes and trends,” according to Deloitte.
Successful companies know that this kind of investment in HR analytics will help build a more effective, empowered, and engaged workforce. When HR and people teams begin to make data-driven decisions based on employee-related data, then they will add value and transformational change that will surely impact the business.
Sharron Malaver is head of enterprise marketing at Sisense. With over 20 years of experience in B2B enterprise software, Sharron is passionate about helping organizations understand how they can solve their most pressing challenges and deliver better business outcomes with cutting-edge products.