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"SAP ERP gives your executives, HR professionals, and line managers
reporting and analysis options that provide real-time insight into your workforce. They can identify
trends at an early stage and make well-informed decisions, enabling you to manage your human capital
more effectively, predict human-capital investment demands, and track workforce costs and the ROI
associated with HR projects."
HR Analytics: Gaining Insights for the Upturn
is also known as :
Human Resources Analytic
Workforce Planning Software
Workforce Analytics Software
Longer Term Workforce Plan
Workforce Analytics Tools,
Workforce Analytics Features,
Strategic Workforce Planning,
Fact-based Workforce Planning Decisions,
Workforce Analytic Software Evaluation,
Workforce Management Solution,
Human Capital Management Software System Solution,
Drive Human Capital Management Decisions.
Most enterprises have accumulated a surfeit of workforce data. Only leading-edge
companies, however, are making extensive use of data to drive human capital
management (HCM) decisions the way most companies use financial and marketing
data to make strategic business decisions. Especially now, these leading-edge
companies are making fact-based workforce planning decisions that will help them
survive the current recession and position them to quickly ramp up workforce
additions when the downturn ends. They are proving that the case for analytics is
more compelling than ever.
"I worry that in this climate of retrenchments, companies will think of workforce
planning as a nice-to-have luxury rather than being what I believe is a critical
prerequisite to planning the reduction in workforce numbers," says Peter Howes,
CEO and founder of The Infohrm Group Inc. Headquartered in Brisbane, Australia,
Infohrm is a leading provider of workforce planning, reporting and analytics
services. "The short-term increase in the available external labor pool runs the risk
of hiding the long-term demographic trends in most Western countries. No company
should be managing redundancy programs without having a longer term workforce
plan to assist in providing a strategic context."
Companies experienced with workforce analytics—essentially the mining of current
and historical employee data to identify key relationships and anticipate outcomes—
understand Howes' point and place a higher priority on analytics than others,
according to a study by Boston-based research firm Aberdeen Group.
Entitled "The 2009 HR Executive's Agenda: Driving Business Execution
and Employee Engagement," the study was based on interviews with
417 executives from around the world—about two-thirds of whom are
in human resources (HR). Among the companies deemed best in class
(the top 20 percent based on employee retention, performance and
engagement metrics), most already use workforce analytics or plan to
start in 2009.
Companies that use workforce analytics attest to their value. Wawa,
Penn.-based Wawa Inc., a food service and convenience business
with 578 stores in five mid-Atlantic states, has used analytics to make
decisions regarding worker turnover, benefits, succession and training.
"Workforce analytics helped us to make good decisions," says Ed
Iames, Wawa's senior director of HR.
" I worry that in this
climate of retrenchments,
companies will think of
workforce planning as a
- Peter Howes
The Infohrm Group Inc.
Beyond identifying key relationships and anticipating outcomes, workforce analytics
is fact-based decision-making—specifically, the use of data, metrics (also called key
performance indicators [KPIs]), statistics and scientific methods to understand the
impact of HCM practices on business objectives and to measure HCM contributions
to the achievement of business goals. Tools and processes include executive
dashboards, statistical methods, descriptive statistics, regression analysis, causal
pathway analysis and predictive modeling.
When BusinessWeek Research Services (BWRS) first studied HR analytics in 2008, it
concluded that when HR uses fact-based decision-making—instead of intuition or best
guesses—the group becomes a more credible partner to the business it serves. Factbased
decisions help HR improve HCM practices, recruit and deploy the right talent, cut
costs, contribute to business performance and provide evidence of those contributions.
Based on further interviews in early 2009 with HR executives and industry
observers, BWRS now concludes that workforce analytics is imperative in the
current economic environment—especially for workforce planning, which, as
Infohrm's Howes notes, is fraught with peril in a recession.
Even an HR organization that does not have workforce analytics could reap benefits
soon after adopting it, according to Howes, who says it is possible to attain an initial
return on investment within six months.
Not surprisingly, these benefits are more achievable
when the organization has a Center of Excellence (CoE)
dedicated to workforce analytics. In an Infohrm survey
conducted last year of more than 200 HR executives
worldwide, 41 percent said their organizations had a
CoE for workforce analytics. These executives reported
more comfort with and superior results from analytics
than the other respondents.
In the survey, 18 companies were determined to be
leading edge, based on three criteria. They are able to:
analytically identify the workforce drivers of business
success; readily translate workforce analysis and findings
into action; and employ an analytics Center of Excellence
model with a dedicated workforce analytics team. These
leading-edge companies report far greater impact from
the use of analytics than the others.
BWRS concludes that
workforce analytics is
imperative in the current
It often makes sense to take a staged approach to
adopting workforce analytics. First, an HR organization
consolidates its systems into a unified platform and
empowers employees with easy-to-use reports from various
data sources. Next, HR and its business partners define
meaningful metrics. After that, they add a dashboard of
key indicators for decision-makers. Only later does HR add
more sophisticated tools to analyze data.
A case in point is Los Angeles Community College
District (LACCD). In its earlier research, BWRS reported
that HR administrators at LACCD wanted only the most
basic metrics, with little analysis. With a total workforce
of 10,000, each of the college's nine campuses has its own HR team. All of these
teams share data and information from a central HR Information Systems platform,
which is part of LACCD's enterprise resource planning (ERP) system.
Recently, though, administrators decided to upgrade the system and then launch
a more comprehensive dashboard to about 200 managers across the district. The
dashboard will focus on budget, enrollment, personnel performance and a few other
areas. Each area will include several metrics, as agreed to by the users. "Interest in
all this data has been much higher in this economy," says Andrew Duran, manager of
the ERP system at LACCD.
Duran—who is on the IT staff, not in HR—emphasizes the importance of involving HR
and non-HR managers in deciding which metrics to provide. He held extensive talks
with managers before deciding what to include on the dashboard.
Duran's team will also begin to deliver 150 in-depth analytical reports—some
weekly, some monthly, some quarterly—to different groups. Each of these reports
will have a business sponsor and an IT sponsor. Duran says most information on the
dashboard and in the reports will be workforce related. Although the dashboard will
include budget metrics, virtually all the LACCD budget is for personnel, he says.
" When workforce
analytics are applied to
HR is thrilled because
they're not just
- Brian Kelly
Infohrm North America
Workforce analytics is being used to significant
strategic effect during this recession by helping
HR make decisions on cutting programs to lower
costs, reducing workforce and reallocating talent
to ensure strategic business goals are met. Users
of workforce analytics understand better than
others the tradeoffs among the various scenarios,
which they can model and study, when making
Infohrm North America President Brian Kelly offers
an example of how analytics can help with workforce
reallocation. To cut costs, an insurance company
considered buyouts for senior underwriters, some of
its most expensive talent. But underwriters account
for much of the company's revenue. It would need
to replace these workers, and hiring outside would
negate the cost cuts achieved by buyouts.
Using analytics, the company found that underwriters
historically had been promoted from the call
center more than other departments. Newly promoted
call center staff initially would be paid less
than departing underwriters. And the call center
could more easily absorb downsizing and/or hire
less-expensive talent. The modeling exercise also
helped the company decide on learning programs to
quickly train new underwriters.
"When workforce analytics are applied to workforce reductions," Kelly says, "HR is
thrilled because they're not just arbitrarily cutting."
Busting Long-Held Assumptions
Workforce analytics is especially powerful when used to test long-held assumptions
and conventional wisdom. Wawa, an Infohrm client, is an example.
One long-held assumption at Wawa was that overall turnover was skewed by the
higher rate among less-reliable seasonal workers, mainly high school and college
students. Using analytics, Iames says, "we were able to eliminate that assumption.
Instead, we began to understand the relationship between the amount of hours
associates worked each week and the amount of time they stay with the company."
Wawa found that workers with 30 hours or more per week were less likely to quit.
The company also had assumed the hourly wage rate was a key factor in retention.
But through workforce analytics Wawa learned that the total size of the paycheck—
reflecting more hours—was more important than hourly rates. As a result, the company
moved from a full-time (30 hours or more per week) and part-time mix of 30
percent and 70 percent, respectively, to a 50-50 split.
"The data suggests that the company is better off to have less people working more
hours, while providing more full-time opportunities for employees," Iames says. "As a
result, we've reduced the in-store turnover rate by 60 percent in the past four years."
Wawa has also used analytics to study and improve benefits, training programs and
succession planning for its 17,000 employees, all but 1,000 of whom work in its stores.
" We've found that the
more data we (HR)
produce and send to our
business partners, the
more questions we get
and the more they want."
- Ed Iames
Wa wa Inc.
In BWRS' initial report, one HR professional commented that HR organizations "have
to develop the culture of inquiry. You have to be curious. You can't be willing to
settle for the first blush of why something is happening."
Today, in the midst of the worst economy in decades, a culture of inquiry is more
relevant than ever. It can also draw HR professionals into closer collaboration with
"We do have a strong culture of inquiry here," Iames says. "We've found that the
more data we (HR) produce and send to our business partners, the more questions
we get and the more they want. They become very engaged with what we are doing,
very engaged with the solutions. Nothing beats an anecdote like firm data."