Employees are any organization’s most important asset and labor costs can account for as much as 70% of total business costs. Understanding what’s working and key areas for improvement with your company’s talent management and HR strategy is essential to business success. This is especially important amid ongoing disruption related to shifting in-demand skills, emerging technology, and changing employee expectations.
Workforce analytics can enable you to take a data-driven approach to optimizing workforce planning, driving employee engagement, and improving overall organizational performance.
What Are Workforce Analytics?
Workforce analytics refers to using data to measure workforce performance, identify strengths, and call out areas for improvement. Also commonly known as people analytics or workforce intelligence, workforce analytics involves proactively collecting, analyzing, and interpreting data to ensure an organization’s hiring, employee engagement, retention, training and development, and other initiatives align with overall business goals and drive business performance.
According to research from the Society for Human Resource Management (SHRM), 71% of HR executives who use people analytics report say analytics are essential to their HR strategy. Leveraging workforce analytics can help uncover critical actionable insights throughout the employee lifecycle, from recruitment to talent development to retention and turnover.
Advanced workforce analytics also incorporate predictive analytics to forecast future workforce trends and outcomes, such as anticipating employee turnover, identifying high-potential employees, and mapping out emerging in-demand skills.
Benefits of Using Workforce Analytics
Integrating workforce analytics into your broader HR and talent management strategy offers a multitude of benefits for your organizations.
Here are some key advantages:
Improved Decision-Making
By leveraging data-driven insights, you can make improved decisions related to talent acquisition, development, retention, and other workforce strategies. Data-driven insights can also enable your organization to align workforce planning with business objectives to support long-term growth and better adapt to shifting business priorities.
Reduced Costs
Workforce analytics can help reduce costs by identifying bottlenecks in the hiring process, ineffective training programs, and other factors that lead to wasted time, investment, and resources.
Increased Engagement and Productivity
Workforce analytics data can identify trends about employee motivators, key drivers of turnover, and skills gaps to improve engagement, retention, and productivity over time.
Strategic Talent Management
Embracing workforce analytics enables proactive talent management, allowing your team to predict future needs, hire talent with in-demand skills, and develop future leaders.
Data-Driven Workforce Planning
The insights gleaned from workforce analytics power effective workforce planning by anticipating market shifts, workforce demographics, technological advancements, and future skill requirements.
Workforce Analytics Examples
Workforce analytics fall into a variety of categories and can be applied to support many HR and talent management functions.
Types of workforce analytics include:
Labor Market Analytics
This type of analytics can help you understand critical insights and trends related to talent availability, supply and demand, emerging skills, average compensation and benefits, and job market conditions.
Recruitment Analytics
Measure the success of your recruitment process, including cost per hire, time per hire, and the effectiveness of different recruitment channels.
Talent Acquisition Analytics
Predict short and long-term skills needs, identify high-potential candidates for internal growth opportunities, and understand what to look for in external candidates.
Performance Management Analytics
Gain insight into employee performance, areas for improvement, and skills gaps. Performance management analytics can also help you set realistic and achievable performance goals for employees.
Learning and Development Analytics
Measure the effectiveness of training and talent development programs, track employee skill development, and identify areas for improvement.
Employee Engagement Analytics
Administer surveys to understand employee satisfaction and sentiment and identify areas for improvement with the employee experience.
Retention Analytics
Identify factors driving employee turnover, predict potential turnover risks, and develop strategies to retain top talent.
Best Practices to Implement Workforce Analytics
Successfully implementing workforce analytics requires thoughtful planning and alignment across decision makers at your organization. Despite the benefits of workforce analytics, a survey from HR.com found that only 22% of HR professionals say their organizations are very or extremely effective at getting the most value out of people analytics.
Here are some best practices to take into consideration:
Understand Business Goals
Workforce analytics can only be successful when aligned with broader business goals. However, the HR.com survey also found that only 23% of HR professionals often or always integrate business and HR data. Gain an understanding of your organization’s short- and long-term business goals and which skills or roles are needed to achieve results. This process can help ensure your workforce analytics and planning efforts positively impact the broader business.
Define Key Performance Indicators (KPIs)
Identify the key metrics and areas you want to measure and improve using workforce analytics. For example, you may want to reduce hiring time by one week or increase employee retention to 90%. Make sure the KPIs you set are specific and time-bound, such as quarterly or annual goals.
Invest in Workforce Analytics Technology
Evaluate and select technology solutions that align with your business needs. Examples of technology solutions that collect and analyze workforce data include human resources information systems (HRIS), talent management systems, learning management systems, performance management software, and employee survey software.
Identify Actionable Insights
Convert data insights into actionable recommendations to improve your workforce management and drive operational efficiencies. For example, actionable insights may point to the need to expand your candidate reach using new recruitment channels or implement more in-depth training programs.
Continually Monitor and Improve
Regularly monitor your workforce metrics and track progress towards your goals to ensure data accuracy, relevance, and effectiveness. This may include updating data collection methods, investing in new technology, and integrating feedback to improve decision-making.
Workforce Analytics Impact Across Industries
Workforce analytics are beneficial to organizations of all industries and sizes. Here are a few examples of how workforce analytics can positively impact specific industries.
Education
Workforce analytics can help education institutions align academic programs with in-demand skills to drive career success for students. Here’s how:
Leverage in-demand skills and career data to develop curriculum and educational programs that will maximize success for students
Help students thrive in a competitive job market by aligning programs with labor market opportunities
Track alumni career outcomes to identify successful higher education programs and areas for improvement
Economic and Workforce Development
Workforce development leaders can embrace workforce analytics to support equitable growth and job opportunities in their communities. Here are some ways workforce analytics can help:
Improve business and talent attraction in a given community by identifying which businesses and occupations are driving the community
Review labor analytics for to make data-driven decisions about selecting new sites and enable a smarter, faster location strategy
Access meaningful trends on skills, compensation, and career pathways to equitably upskill and develop staff in the local market or region
Labor Market Analytics Case Study: Indy Chamber
The Indy Chamber had a goal to improve talent attraction and workforce development in the region, which includes the city of Indianapolis, as well as suburbs and rural areas in surrounding counties. The chamber partnered with Lightcast for a regional skills analysis leveraging Lightcast’s experts proprietary database of labor market analytics that extracts important insights from job postings, online profiles, and other relevant sources.
A key benefit of the skills analysis is that skills are now used as a common language to accurately communicate supply and demand across regions and industries. This enables the Indy Chamber to improve talent attraction, hiring, retention, and growth opportunities across the region. Companies across the diverse, nine county region now have a better understanding of the skills workers have and which skills local businesses need. Education and development groups in the region can also now help students build skills that employers will need in the future.
Power Smarter Decision-Making with Lightcast Workforce Analytics
As technology evolves and organizations continue to prioritize data-driven decision making, workforce analytics will continue to play an increasingly central role in shaping the future of work. Workforce analytics enable organizations to gain valuable insights into their workforce dynamics, optimize talent management practices, and drive business performance.
Learn more about the positive impact of workforce analytics by reading this blog post: How Dynamic Workforce Analytics Can Transform Your Talent.
Implementing workforce analytics on your own and identifying actionable insights can be complicated and time-consuming. Lightcast’s comprehensive workforce insights include global workforce data from more than 300 million resumes and social media profiles, one billion job postings and industry benchmarks, and 40 million compensation packages and salary examples.
With Lightcast workforce insights, data is gathered and analyzed based on your specific goals to help you make smarter data-driven decisions. Gary Russo, of Providence Health and Services, discussed how Lightcast data helps power the workforce analytics for their organization which is over 180 years old, has 50+ hospitals, over 1,000 medical groups, and 120,000 caregivers on staff.
Whether you’re an enterprise, higher education, or community development leader, Lightcast can help you unlock growth opportunities and sustainable change. Get in touch to learn more.
