3 Areas That Workforce Analytics Create Business Value
Gartner estimates HR can boost an organization’s profit margins by 4% and drive talent outcomes by up to 23% by improving its analytical capacity. It’s not surprising then that 70% of organizations expect to increase their investment in workforce analytics in the coming years.
This renewed interest in analytics is driven by two main factors. First, our ability to collect and store vast amounts of data has dramatically increased recently with breakthroughs in computing power. Second, this increase in data collection has resulted in the rapid adoption of AI and automation tech.
The logical next step is the ability to use this data and tech to solve critical business challenges in HR and beyond.
Here are the 4 areas of HR that workforce analytics are being applied to create business value.
1. Recruiting analytics
Gartner’s data found recruiting is the area that analytics is being applied the most effectively to make talent decisions. 25% of leaders use HR data for sourcing talent and 10% use data to assess quality of hire.
Workforce analytics is especially strong in recruiting because this is the area of HR that’s also invested in AI to increase efficiency and effectiveness in their processes including automating screening and messaging (e.g., chatbot technology).
Another big area of investment in analytics for recruiting is in assessments to measure candidates’ skills and personality to quickly and accurately identify potential top performers.
Both smart automation and candidate assessment are resulting in improved quality of hire in terms of performance and retention.
2. Learning analytics
23% of leaders are using workforce analytics to develop leaders and identify high potential employees (HIPOs).
Data are being applied to the learning and development function by measuring the effectiveness of learning programs, iterate on programs to optimize investments, and communicate the business impact to stakeholders.
A growing area of learning analytics is network performance and learning, which is managing employees to deliver enterprise contribution rather than individual task performance.
3. Performance analytics
24% of leaders use analytics to improve employee performance and engagement. Data sources include performance evaluations, employee engagement surveys, and real-time behavioural data (e.g., emails).
An innovative organization using workforce analytics for performance is Infosys. They reduced their attrition by assessing what the ideal experience, tenure, and requirements were for key positions and transferring employees who were unqualified for their current roles to other internal roles.