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Talent Management Perspectives

Published August 2009

The Role of Workforce Analytics in Talent Management

 

  Eric Lesser and Chris Wright

In today's difficult economic climate, workforce analytics can play an important role in addressing many of the human capital challenges that companies face today.

By transforming data into insight, workforce analytics can help the HR function become more engaged in the formulation of corporate strategy. The result will be a better, fact-based workforce decision-making capability that is aligned with the long-term business imperatives of the organization.

While employees continue to bear the brunt of the worst economic recession in a generation, what's lost in the headlines is the way in which organizations are making decisions about their workforce. Many organizations lack the information insights that would enable them to make smart human capital decisions - identifying high performers, ensuring that the right employees are retained, shifting valued resources to other parts of the business in accordance with overall strategy, and seizing opportunities that could further differentiate their value in the market.

This kind of proactive human capital management is intimately linked to the ability of HR professionals to influence corporate strategy. According to a recent IBM workforce survey, only 17 percent of respondents indicated that HR is a leader in the strategy process. The reason: Most HR departments have a limited capacity to consistently measure and analyze workforce performance.

Indeed, many organizations have not invested in defining, capturing and analyzing workforce data to the same extent as in other critical business areas, such as procurement and finance. Without this capacity, companies typically find themselves with a lack of workforce analytic insight around a number of areas, such as:

• Defining the requisite knowledge and skills needed to execute the business strategy: Organizations must have a firm understanding of what skills and capabilities they have in-house, where gaps exist and the best ways to fill those gaps through external hires or internal mobility.
• Evaluating workforce performance: In these turbulent times, organizations need to differentiate high from low performers, compensate and reward these individuals accordingly and identify opportunities to close performance gaps.
• Retaining valuable talent: Organizations should have retention plans to keep high performers motivated and engaged, helping ensure the continuity of operations and enabling future growth.
• Determining strategies for redeployment, retraining and workforce reductions: Tough times mean tough decisions. However, organizations can minimize the impact of layoffs and the loss of intellectual capital through reassignment, retraining and reallocation of resources to higher-priority areas.
• Developing career paths and succession plans: Formal career path and succession planning are vital to accelerating time-to-competency and minimizing productivity losses due to departures.

Without the benefit of analytic processes and technologies that can provide a consistent method for collecting and interpreting data, HR professionals will be at a distinct disadvantage in the boardroom.