The long-term success of a business depends, among other things, on the successful composition of its workforce. Qualifications, attitudes, motivation, and innovative strength are factors that employees bring to the company. These and many other factors ensure that it remains viable for the future and can establish itself on the market in the long term. From time to time, however, new processes, new organizational forms, or other changes are necessary. Here, forecasts in the area of workforce analytics, for example, can reveal adaptation needs and optimization potential in order to ensure long-term business success.

What is Workforce Analytics?

Workforce analytics (also known as HR or people analytics) refers to the use of various tools to measure, structure, and analyze employee-related data. With the help of various analysis tools, it is possible, for example, to determine employee performance in order to provide management and executives with a basis for important decisions. Differant HR metrics play a role in this.

The Growing Importance of People Analytics

Over the past few years, most companies have come to understand that the needs and wishes of their employees are important for their strategic orientation. Only when employees are satisfied and motivated do they perform at their best and develop long-term loyalty. In an employee-oriented labor market in particular, it is therefore extremely important to increase employee loyalty and motivation. Data-based decisions and objective evaluation options form the basis for this.

The Kienbaum study “Winning with People Analytics” examined the current level of implementation and readiness for future use of HR analytics tools in 2020. 492 participants from the HR sector shared their assessment of the benefits and impact of workforce analytics on HR work, as well as their current experiences and future plans. Three-quarters of respondents consider HR analytics to be very relevant for the future – however, very few companies are currently utilizing the full potential of people analytics. The Kienbaum study summarizes the following points:

HR reporting: Analysis of various HR data, such as staff turnover or time accounts
Descriptive analysis: descriptive presentation of the correlations resulting from the evaluation of HR key figures
Inferential statistical methods: investigation of structural correlations based on existing data, such as the effect of fair personnel deployment on staff turnover in the company
Predictive analysis: e.g., based on artificial intelligence in the HR area

At only 13 percent, the use of the complete tool palette is very low. 64 percent of study participants state that they have this topic on their agenda as a long-term goal. Workforce analytics has therefore been recognized as an important analysis tool. An increase in the use of data analysis in the HR sector is therefore to be expected.

These three steps will help you get started in the field of people analytics without any obstacles:

1. Implement Workforce Management Solution

First, it is important for companies to establish a foundation. This can be achieved by introducing workforce management software. This software should be suitable for both the industry and the size of the company. Consulting with specialized providers is an essential step in determining an accurate requirements profile and implementing the appropriate solution.

2. Continuously Record and Evaluate Data

Once the appropriate software has been introduced, data should be recorded continuously and evaluated at regular intervals. Even the best data is useless if it is not interpreted after recording. Therefore, when choosing a provider, it is important to consider the available and necessary evaluation tools as well as the possibilities offered by HR analytics dashboards.

3. Utilize HR Metrics and Workforce Analytics

When analysis tools have been correctly configured and work processes established for workforce analytics, the data must still be used in a targeted manner. This means that both HR managers and management make empirical or data-based decisions based on the collected and processed data.

Areas of Application for Workforce Analytics

Whether identifying the causes of low employee motivation, uncovering short-term or future staffing needs, or determining sick days in relation to assigned shifts or duties: these and many other possibilities are offered by the use of workforce analytics in the workplace. HR analyses can be used in the following areas, for example:

Recruiting: Both future staffing requirements and the identification of effective recruiting channels are of great importance to the HR department. The characteristics and requirements for satisfied and motivated employees can also be determined in order to improve performance in the long term.
Personnel development: Identifying skill gaps and short-term and future needs is essential for the strategic alignment of corporate goals. Goals can only be achieved if the necessary qualifications are available. The findings of data-driven analysis can be applied to establish a concept for lifelong learning in the workplace.
Staff scheduling: Planning managers must constantly focus on accurately calculating staffing requirements and ensuring targeted and motivating staff scheduling through fair duty rosters and shift schedules. Planning quality and individual motivation indicators are just some of the HR metrics that can be determined using workforce analytics to support planning tasks.

Workforce Analytics: Fundamentals for Successful Data-driven HR Decisions