Workforce analytics drives data-informed workforce planning, analysis and management. This article explores the benefits and capabilities of workforce analytics. It provides resources to determine the value and impact of an integrated workforce management and HR platform for your business.

What Are Workforce Analytics?

Workforce analytics is the use of data-informed methods to improve workforce planning and management. The practice measures the impact of workforce behavior and related factors on overall business performance.

Workforce Analytics vs. People Analytics vs. HR Analytics

Broadly speaking, HR analytics would be any analysis performed by members of your HR department. It changes with advances in technology and other trends and usually encompasses analysis done to improve HR practices. For example, analyzing processes like how long it takes to fill a vacant position.

HR and people analytics are often used interchangeably. But some HR professionals would say that people analytics extends outside work with items like well-being and work-life balance — for example, examining how larger events, such as the COVID-19 pandemic, affected employees with additional stress and changing work environment and making plans to overcome barriers. Some employers took steps like reimbursing for tutoring to free up time for parents who had children studying at home.

Workforce analytics looks at the work itself in a broad sense, rather than only focusing on the people. And while workers are an important aspect, there are other organizational focuses, technology and processes that impact performance.

Regardless, the term you use is less important than the concept of using data to inform your decisions about how to improve employee-related processes and performance. You’ll often hear these terms used interchangeably and many people will have varying definitions.

Key Takeaways:

  • Workforce analytics adds value by helping align workforce management and HR strategy with business outcomes.
  • The use of workforce analytics platforms is prevalent across various industries, and demand for innovative workforce management use cases in HR continues to grow.
  • Workforce analytics optimizes and measures workforce planning and performance in areas like recruitment with key performance indicators (KPIs).
  • Use a framework to implement workforce analytics capabilities and to determine if a more advanced workforce analytics solution is right for your business.

What Are Workforce Analytics Used for?

Data analysis and software are the keys to using workforce management to answer strategy questions. Use it to spot trends, analyze performance and monitor these workforce analytics KPI examples.

  • Recruitment and talent management: The critical metrics that HR teams use to track their ability and efficacy at sourcing, recruiting and managing talent. Talent management metrics help monitor supply-and-demand trends to meet current and future hiring needs for in-demand skills.

  • Employee retention: Measuring employee retention helps determine how hiring, training and HR management strategies impact the longevity of employee tenure at your company. Low retention can have an impact on the bottom line with recruitment costs, lost productivity with vacant roles and training expenses.

  • Employee experience: This encompasses interactions from the moment candidates begin interacting with a company until the moment they leave. Positive employee experience results in more productive and engaged employees who stay with the company for longer periods. Several methods, such as employee surveys or performance reviews, can help you gauge how your workers feel about their employer.

  • Employee performance: Common metrics to help track your workforce's effectiveness based on productivity measurements and output can include sales per employee, revenue per employee and other qualitative information.

  • Employee absenteeism: Also known as habitual absenteeism, this looks beyond regularly scheduled and occasional missed days. Are there employees or units with absenteeism issues that are affecting business outcomes? This can affect productivity and morale and should be measured and addressed when necessary.

  • Training and development: These metrics are essential workforce planning indicators that reveal the efficiency and effectiveness of onboarding, training and upskilling. KPIs that are good to measure include training spend per employee, new skill acquisition and annual training hours.

Workforce management action plan template

We’ve compiled a list of questions and guidelines to help you make the most of your workforce analytics. Use this template as a starting point for your workforce analytics strategy.

Download Workforce Analytics Action Plan Template

The Importance of Workforce Analytics

Remember that workforce analytics is the practice of using data and statistical models to examine employee-related information and their effect on business performance. Analyzing and reporting on worker-related data is a key component of human capital management (HCM), a term for the set of policies and practices to help you hire, develop and optimize your workforce. This data helps you identify potential problem areas and make informed decisions on how to meet improvement goals. For example, identifying an increasing rate of employee turnover can lead to setting retention goals and creating tactics to reach those objectives.

The Benefits of Workforce Analytics

Tracking performance and other analytics is the first step toward making goals and improving. What are the benefits of workforce analytics? They include the ability to better do the following:

  • Predict and prioritize hiring needs
  • Optimize scheduling
  • Discover labor inefficiencies
  • Monitor employee engagement
  • Identify staffing problems
  • Create high-functioning teams
  • Address skill and knowledge gaps
  • Enhance onboarding and offboarding processes
  • Improve employee retention
  • Reduce absenteeism and turnover
  • Design efficient workflows
  • Control costs
  • Manage and mitigate compliance risks
  • Improve individual performance
  • Guage employee wellness
  • Increase the value of employer brand
  • Benchmark against same sized companies

How to Implement Workforce Analytics

Use the following methodology to create and implement a workforce analytics project framework.

  • Determine why: Before implementing a robust workforce analytics project, ask questions about the desired business outcomes and summarize the workforce problems the project addresses. This can help you gain support from project stakeholders and executive sponsors.

  • Write a project statement: Incorporate internal research, industry data, studies and knowledge from subject matter experts to create a testable project statement before gathering and interpreting workforce data.

  • Gather high-quality, ethical data: This step involves identifying top-quality workforce data and determining the relevance and the type of information to collect. For example, do you include existing data or new data? Address any legal concerns and align ethical standards for data privacy and security compliance with project goals. Data sources should go beyond HR sources and include accounting, customer relationship management, projects and others to get a complete view of workforce behavior.

  • Establish KPIs: Determine not only which workforce KPIs to monitor but also the target. For example, a turnover rate of less than 10% and a time to fill a position at 45 days.

  • Create workforce analytics dashboards: Organize KPIs and other visualizations in meaningful and engaging ways for your decision makers. Discover meaningful insights to workforce planning and management with HR dashboards that present relevant observations through real-time, interactive user-friendly visualizations and quality workforce data.

  • Optimize workforce reporting: Interpret data with clear project recommendations using workforce analytics reports that provide clarity to project sponsors and implementation managers. In addition, ensure everyone understands who is responsible for actionable outcomes and project conclusions.

Workforce analytics dashboard: Employee experience

Using workforce analytics dashboards, you can visualize real-time data. The employee experience dashboard in this video monitors and measures your workforce’s health and culture.

It includes data to track employee experience metrics that correlate to meaningful business outcomes:

  • Recruitment
  • Hiring
  • Onboarding
  • Performance
  • Engagement
  • Training and Development
  • Turnover
  • Absenteeism
  • Promotions
  • Recognition
  • Employee referrals

Workforce Analytics Trends and Tools

How is workforce analytics evolving? Modern workforce analytics thrives on cloud computing innovations, machine learning features and integrated human resource management systems (HRMS) that incorporate accounting, sales and CRM capabilities. Using workforce analytics technology and tools ensures accurate and real-time results.

Here are some examples of how workforce analytics is evolving through innovations such as:

  • Automated workforce analytics tools: The power to automate data collection and sorting using artificial intelligence and statistical modeling helps managers calculate accurate staffing demand, optimize project schedules and meet or beat aggressive labor and project budgets.

  • Workforce analytics in the cloud: Connecting the entire organization with a single digital space for workforce data and analytics enables real-time collaboration and reporting. The dashboards that display the results of KPIs and other reports can also be tailored for individuals or specific roles. Cloud computing and database technology empowers organizations to gather data from mobile data sources and Internet-of-Things (IoT) devices and sensors to expand workforce analytics capabilities.

  • Prescriptive and predictive workforce analytics: Advanced machine learning algorithms predict demand to create accurate employee schedules, help scope projects and reduce the cost of overtime or overstaffing. Prescriptive statistical models help interpret workforce data to identify future opportunities and risks based on actual business challenges and historical datasets.

Challenges of Workforce Analytics

Discovering and sharing insights with workforce analytics projects often requires overcoming obstacles. Some of the common hurdles include the following.

  • The data dilemma: Poor data quality leads to questions of accuracy and efficacy of workforce analytics and can derail even the best data analysis methodology and technology. Quality data defined by clear ownership and governance policies are critical to successful workforce planning and management outcomes with workforce analytics. Refine and clean data sources, and recruit qualified administrators, engineers and analysts to help manage data and build reliable workforce analytics dashboards.

  • Eliminate data silos: Once the data is clean and trustworthy, effort is needed to break down data silos and centralize all your workforce data in one place. This enables greater visibility, self-service and a comprehensive data set while improving communication amongst decision makers.

  • Silent sponsors: Workforce analytics requires sufficient top-down investment. Earn executive buy-in using data-informed evidence on how the results of your workforce planning and management efforts align with business strategy and map to desired organizational outcomes.

  • Legacy technology: Outdated and underfunded technology is a constraint to realizing the full benefits of workforce analytics. Be sure to carefully compare the capabilities and functions of a new workforce analytics solution before investing in software and infrastructure. Big data projects can quickly balloon and get derailed by technology integrations and database migrations if you go to market for a workforce analytics solution without a clear roadmap for determining your needs and long-term plans.

Invest in Your Workforce

Human capital management strategies should deliver data-informed business outcomes, and not just to HR teams. HCM software can help you develop data-savvy workforce analytics across your organization and discover real-time, meaningful workforce planning and management insights with workforce analytics dashboards and reports.

Access the Data You Need in One Place for Meaningful Insights With Workforce Analytics

Redefine workforce planning and management workflows and empower HR with an integrated HCM solution that brings clarity and context to workforce analytics projects. Eliminate the gap between business intelligence and business outcomes with real-time KPI reporting and customizable dashboards. Put all your data into action with NetSuite’s workforce analytics solution and see how workforce performance impacts the entire organization.

Your employees impact every area of your business. Quantifying performance and other human capital-related efforts helps you see where you’re at as a company, identify goals and track progress toward those objectives. This practice of using data and statistical models to examine employee-related information is sometimes known as workforce analytics. Human capital management software can be used to aggregate and accurately display real-time reports from worker-related data. This information is served up in simple-to-understand visuals displayed on dashboards that can be customized to individual users. Workforce analytics uses this information and reporting to help you make data-driven decisions that can help you cut costs and boost profitability.

HR and Payroll

Free Product Tour

Workforce Analytics FAQs

What is the difference between workforce analytics and people analytics?

Workforce analytics looks at work more broadly, rather than only focusing on the people. Employees are a vital piece of it, but there are other areas including organizational focuses and technology that are included.

Who uses workforce analytics software?

While workforce analytics software may be housed in the HR department, it can be made available to managers, executives and others throughout your company. Permission levels can be set for what data they can access, and customized dashboards can be created to match pre-determined user levels.

How can workforce analytics help organizational teams other than HR?

Most every team in your company will have employees. Workforce analytics can help them understand trends, such as turnover, productivity and training efficacy. Human capital management software can serve up customized dashboards for different teams so they can understand the employee-related data in their specific area and drill down for more details when necessary.

Why is workforce data analysis important?

Workforce analytics is more than just counting the number of employees in your company or even just measuring their output. Instead, it’s a broader look at your business’s workforce and is created to examine historic trends and design predictive models to better understand future staffing needs, current performance and much more.