Posted by John Houston on August 11, 2011
Many organizations have been actively using analytics to support areas such as finance, risk, customer relations management and supply chain optimization for years now. But over the last year, workforce analytics has become a major focus of attention.
One reason I see for the growing interest is fallout from the economic situation: Many companies have realized they aren’t well equipped to understand how quick changes in the economy, up or down, affect them from a workforce perspective or how to handle those effects. So maybe they made large, draconian cuts in their workforce during the downturn, only to be faced today with needing an additional 500 people to take advantage of a market opportunity — but by the time they could hire and train them, it would be too late. They’re looking to be much better prepared to deal with good or bad economic news, so are interested in using analytics to support workforce planning and retention.
Another driver is the knowledge that a great deal of organizational revenue and expenses are workforce related — and that percentage will likely increase as the economy becomes more and more service-based. So companies see a tremendous need and opportunity to leverage workforce analytics in the way they are using analytics in other areas of their business. Many are just getting started. They’ve invested in ERP systems, they can produce reports from those systems and they’re starting to do some trend analysis. But there’s still a large gap between where they are and where they want to be. Getting from here to there in a way that’s acceptable to the organization, given the realities of budget and resource constraints and the many options and paths they can take, is what they’re wrestling with.
We’re working with clients along a continuum of sorts — at one end are organizations focusing on implementing a point solution. They have a turnover issue, a recruiting issue, a workforce planning issue, or the like and want to use analytics to help solve that particular problem. Companies at the other end of the continuum are looking to build broad internal capabilities encompassing people, data, processes, tools and governance to enable a wide range of workforce analytics. Most organizations we see are trying to figure out where they should fall along the continuum. Here are some things to keep in mind:
|John Houston, principal, Deloitte Consulting LLP, leads the Predictive Modeling service area in the Human Capital practice and is a co-leader of Deloitte’s Workforce Intelligence service area. He is a specialist in the use of third party data, talent supply, and demand forecasting in predictive modeling.|