What Is Workforce Analytics? Why Is It Important?

Human resources (HR) is a vital department in most organizations, providing direct support to workers while managing employee and company performance. People, or human capital according to business textbooks, are undoubtedly a company’s most valuable asset. Even in this age of automation and big data, very little gets done without the input and support of employees. Collecting employee feedback and reliable workplace data has long been a challenge. In the past, it relied on surveys and other qualitative assessments. As HR management continues to strive for a greater understanding of employee needs, workforce analytics provides a compelling new resource for helping to achieve this goal.

Data from a recent Deloitte industry report on human capital highlighted the fact that while 85% of businesses believe workforce data is important, only 42% are actively monitoring it or are ready to do so. This represents a large gap between knowledge and practice among many business leaders. As more companies implement new practices for collecting, reviewing, and interpreting workforce data, we are likely to see increasing levels of adoption. Increasing data processing power and software automation also make it possible to work with large datasets.

In this post, we’ll discuss what workforce analytics is used for and how it can improve engagement and employee-based decisions. Given the complexities of managing individuals and teams, the use of workforce analytics helps shift the perspective of HR management from general qualitative observations to quantitative and data-driven processes.

The Definition of Workforce Analytics

Workforce analytics, a subset of HR analytics, involves the management and interpretation of employee-related data that’s focused on the workplace environment and engagement between employees and departments. The goal of working with this data is to gain a better understanding of key dynamics that are affecting performance and decision-making within the organization. Another important component of workforce analytics is the comparison of internal data to industry benchmarks and employment data. Successful workforce analytics management can help interpret trends, manage employment risks, and increase engagement.

What Does Workforce Analytics Measure?

Workforce analytics can be broken down into three major categories: productivity, engagement, and adaptability. By measuring parameters across these areas, companies can gain a comprehensive understanding of workplace performance including how employees are reacting to their environment and each other.

  • Employee Productivity. Management and executive leadership play a significant role in enabling employee productivity. Some examples of measurable productivity dynamics are the onboarding process, data management and access, and work hours. Workforce analytics aims to understand the underlying behavior and practices that take place as a result of the company culture and expected norms.
  • Employee Engagement. Engaged employees are more productive and devoted to the company’s mission. If employees don’t feel appreciated and understood, it also can be difficult to collect candid feedback that can be used to make improvements. Some key employee engagement metrics include employee retention, development planning milestones, and interpretations of work-life balance.
  • Organizational Adaptability. The COVID-19 pandemic has stressed the resolve of even the most resourceful companies. Looking at the organizational hierarchy, work styles, and approach to change management are a few of the ways to measure a company’s ability to adapt. Another important angle that workforce analytics can assess is the use of internal and external trend analysis and how this impacts a company’s goal-setting and decision-making processes.

Why Is Workforce Analytics Important?

By using workforce analytics, a company can gain greater insights into historical employee-related trends and create its own predictive models for future behaviors, improvements, and risks. With this expanded data set, it’s also easier to evaluate potential workplace improvements and find ways to automate routine tasks and eliminate unproductive work.

It is also possible to more clearly compare different departments and understand the dynamics that affect the ability of teams to work together and collaborate to achieve shared goals. Drawing clear conclusions from complex datasets is never easy, and this is especially important when it comes to the workforce. By committing to an analytical framework, companies can make smarter, faster, data-driven decisions and develop best practices for a fully optimized workforce, resulting in an increase in employee satisfaction, improved employee experience, and increased retention. Workforce analytics can play a key role when companies are going through change, such as pandemics, mergers, and acquisitions, allowing organizations to better understand how collaboration is working (or not working) and quickly make adjustments to ensure smooth transitions such as going back to work post-pandemic, integrating teams, and the like.

Workforce analytics is becoming an increasingly important resource for companies looking to develop a truly engaging workplace. With today’s remote work cultures, employees must connect with each other in new ways that are vastly different than was possible in a traditional office environment. Gaining new insights through the use of data is a concrete way to take advantage of technology while giving employees an opportunity to thrive.

Last Updated 31 March 2021