By Jeff Carey

Ask any CEO what their greatest asset is and with very few exceptions, the answer will be “their workforce.” Employees represent the company’s brand in the market, interact with an organization’s customers on a daily basis, and develop and service the products and technologies a company produces. In short, they are the essential bridge between an organization and its consumers – and critical to business performance.

Know Your Ebb and Flow
Given their importance to business outcomes, it would be expected that HR leaders would have a clear understanding of the ongoing ebbs and flows of their workforce. However, research shows that few organizations have a good grasp of their workforce dynamics. Consider that:

• Less than 20 per cent of organizations are able to apply predictive analytics to address important people issues;
• Over 40 per cent of organizations are limited to basic HR reporting capabilities; and
• More than 50 per cent of companies report difficulty with integrating workforce data from HR and non-HR systems.

Driving Data to Human Purpose
There are many external and internal issues affecting today’s workforce, making it essential that CHROs use data-driven analytics to better understand what is going on with the people in their organization. From an external perspective there is the increased globalization of work, a desire for more workplace flexibility, perceived skill shortages, regulatory and compliance issues—as well as emerging data sources from social business and collaboration.

Internally, forces are also compelling organizations to use analytics to make smarter decisions around retaining top talent, addressing employee engagement and increasing productivity.  These internal issues become even more demanding if a company is part of a merger, acquisition or divestiture – or goes through a profound shift in its strategic direction.

Workforce Analytics at Work
According to interviews conducted as part of the 2014 IBM study of 343 CHROs, workforce analytics can and are being used by leading organizations to address key business issues. For example, a financial services company is using HR data analysis to reduce attrition in its customer services staff, which is helping lower training and turnover costs while maintaining appropriate services levels. Similarly, a retailer is using workplace analytics to ensure it staffs its stores with the right mix of associates who have deep product knowledge and can offer its customers an enhanced shopping experience. Meanwhile, a pharmaceutical firm is using analytics to optimize its R&D team mix from various disciplines across the organization in order to increase the chances of a disruptive, innovative breakthrough.

Taken a step further, forward-thinking companies are using analytics to not only assess their workplace challenges, but to predict the likelihood of certain actions occurring—such as an individual leaving the organization. These same leaders are also looking for early warning signs from a variety of emerging social data sources like internal and external social platforms, cognitive testing and recruiting sites.

Four Key Capabilities to Consider
Organizations looking to focus more on workforce analytics need to consider four key capabilities. First and most importantly, they need to have access to critical analytics skills, including data architecture skills—so they can make sense of the data they are capturing.

Second, but equally important, is having the right tools and technology to manage myriad data sources. Third is security. While workforce analytics improves decision making, it also includes the responsibility to keep employee data secure with proper protocols to prevent inadvertent disclosure.

Finally organizations need a culture that supports data-driven decisions—wherein management clearly communicates a compelling “future state” vision, supported by the appropriate processes, which all employees can buy into.

Four Tips For Success
Success will come to those who:

• Link their workforce analytics to their overall business strategy.
• Follow through and take action on insights uncovered.
• Communicate positive, tangible results using ROI and share success stories.
• Start small and grow – prioritizing projects and resources before taking on more complex tasks.

Delivering What is Needed to Succeed
Given the importance of talent in this customer-centric world, the HR function needs to be prepared to deliver the skills and capabilities a business needs to succeed—and workforce analytics are essential to any organization looking to have an engaged workforce behind them, helping them deliver customer value.

A CHRO from the 2014 IBM study sums it up well: “We need to think about human capital the same way as any other asset to achieve a return, and an analytics system can help us get to this.”

By Jeff Carey is the national business unit leader with Smarter Workforce, IBM Canada Ltd.