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Workforce Analytics: Global Currency of the Best

Workforce Analytics: Global Currency of the Best

How do the best-performing organizations know how to be the best? For starters, they tend to know who their best talent is and where best to allocate their top employees; their journey to performing best in fact starts with the possession of accurate, easily accessible, actionable workforce analytics. At these organizations, the right kind of workforce analytics and reporting tools are in place. Furthermore, a majority of these organizations say that their strategies for human capital management and overall business are fully aligned, and presumably, there's a causation stemming from that correlation. These are among the salient conclusions and findings of a recent Aberdeen report, "Workforce Analytics: Key to Aligning People to Business Strategy."

The Path to Alignment

The benefits of aligning business strategy with HR strategy have been well-documented. As noted previously, in this blog, a preponderance of research reveals the various ways in which alignment of HR's goals with overall business strategy is healthy and identifies paths that lead to this alignment.

For instance, according to another Aberdeen report, "Assessments 2011: Selecting and Developing for the Future," the degree to which employee assessments are conducted appears to be high among exceptionally well-functioning organizations. Additionally, the same research finds that the more points along the employee lifecycle that an organization integrates employee assessments, the better its performance overall tends to be. Indeed, reliance on employee assessment seems to be a particularly strong determinant of an organization's success, and successful organizations tend to adopt technologies that assist in the dynamic interpretation and broad integration of employee assessment.

Ultimately, this is all intuitive and probably why, according to NorthgateArinso's annual Talent Management Survey, nearly four-fifths (78 percent) of HR departments at once strive to align with corporate strategy and report that they don't think they adequately do so. 

Knowing Where They Stand

Gauges in the dashboard of a motor vehicle provide an accurate reflection of the engine's vital stats, the amount of fuel available, the vehicle's speed, and more—basically, all the information the driver needs. Additionally, the fuel, brake and (sometimes) clutch pedals enable the driver to modulate a vehicle's performance in highly specific ways.

To perform as optimally as possible, organizations need similar control and information. The dashboard and pedals aren't always there, but where they are, we find what Aberdeen's "Workforce Analytics" report classifies as "Best-in-Class" organizations. Companies that succeed in getting the following three areas of human capital management under control typically outperform their peers:

  • workforce optimization
  • talent planning
  • HR service delivery

Best-performing organizations, according to Aberdeen, deploy their workforces in ways that "maximize revenue while controlling workforce-related costs" (workforce optimization), use employee and business performance data to "ensure that recruiting and development efforts align with the business objectives of the organization" (talent planning), and use "data-driven service performance analysis in order to minimize the administrative costs and tactical burden on HR without diminishing employee satisfaction" (HR service and delivery). Conversely, inattention to these keeps HR departments and the organizations that rely on them unduly distracted and underperforming, Aberdeen finds.

Globalization, Added

Take the findings that say best-performing organizations are best at incorporating employee assessment into their everyday routine. Add the knowledge that the HR profession aspires to align with the rest of the organization. Now, mix a lot of globalization into the pot, and Aberdeen's research into workforce analytics takes on even more importance. To wit:

The "2010 IBM Global Chief Human Resource Officer" reveals that workforce optimization and its variants are among the top concerns of the more than 700 CHROs worldwide surveyed by the IBM Institute for Business Value in late 2009 through mid-2010. Since, globalization has only increased, and without the proper workforce analytics in place, expansion into foreign markets strains HR departments' ability to allocate the organization's workforce properly. In turn, the circumstances surely diminish alignment, and unsurprisingly, organizations are endeavoring to combat the trend: Workforce management (e.g. time, attendance and absence) and workforce planning (e.g. allocation and reallocation of talent companywide) are among the top 10 HR technology–related initiatives organizations have presently planned, according to the "CedarCrestone 2010-2011: HR Systems Survey," an annual study into HR systems and technology. Moreover, more than one-fifth of the 1,300 organizations participating in CedarCrestone's research reported an "inability to predict and plan future workforce needs," and one-third expected to use a workforce optimization–related application within the next three years.

Do All Roads Lead to Alignment?

It's a loaded question, and by the way, where's the fork? With HR technology and the variables affecting it, the mistake, often, is to conclude that all aspects of HR technologies and systems are interrelated, and to leave the conversation there. They are and aren't. Consider HR alignment with corporate strategy. Take one part employee assessment and one part workforce analytics. Mash them together. They seem interrelated, and they are, and yet they aren't. Best-in-Class performers' performance is traceable not only to robust employee assessment, but also to the proper, efficient utilization of workforce analytics, in key areas. Furthermore, analytics from employee assessments certainly feed into the kind of workforce analytics that best-performing organizations would find the most useful. But it does not automatically follow that both coexist in equal amounts wherever best-performing organizations roam. That calls for, yes, more research.