In a previous blog post, I described how artificial intelligence (AI) can help human resources (HR) in the recruiting process. It is interesting to note that almost half of the people who took our poll would use AI—but not extensively.
Besides being used for recruiting purposes, AI is used more and more in workforce management. By combining business intelligence (BI) with HR processes, business performance management (BPM) for HR is created. Vendors call it workforce analytics—and Infohrm, Aruspex, and Vemo are among the three that specialize and offer really interesting products and services in this combined area of BI and HR.
Of course, there are HR vendors (Kronos, Mercer, etc.) that offer workforce analytics, and BI vendors (IBM, Oracle, etc.) that created modules or versions of their products for this niche. No matter which vendor is offering workforce analytics, it is still used in midsized companies or large corporations.
What Can Workforce Analytics Bring to Your Company?
If you are a HR manager in a company that employs thousands of people, one of your main concerns should be reporting and analytics. Workforce analytics can help your organization determine how efficient its recruiting processes are. It can also help during the hiring process—recruiting the right people at the right costs.
Workforce analytics can give your company a general overview of the activity of the HR department. Depending on the product being used, you can drill down to the next level of detail, build interactive graphs, and export the data to different file formats.
By understanding the demand and supply in HR—as well as the gaps between the two—HR professionals can create and implement better internal procedures for talent management, retention, succession, etc.
This is done by gathering information on your workforce and putting it into a single repository. This information comes from your HR system, enterprise resource planning (ERP) solution, or other business software (e.g. time and attendance, project management, accounting software, etc.).
By using this data, your company can create forecasts and what-if scenarios in order to understand how a change in the activity of the company can impact its HR department and vice-versa. For instance, if you decide to launch a new product line, you can estimate how many people you’ll need and how much it will cost you.
Most of the vendors in this area (HR, BI, or workforce analytics) offer pre-defined key performance indicators (KPIs) that your company can use to measure the efficiency of its workforce, but they can also help build new ones and even implement best practices to improve the way people work.
Finally, these vendors offer consulting services that can be used to define the way you gather and interpret the data, create and use KPIs, define and manage internal work procedures, and review strategies for recruitment, talent management, compensation, or training.
In a future blog post I will describe what the main players in workforce analytics have to offer. In the meantime, I welcome your comments, and if you have any specific questions you would like to ask the vendors, please let me know. I will include the most interesting ones (with the answers), in my next blog post.
I agree that BI not only adds significant value to HR, but that it can revolutionize the entire industry. The challenge that many of these vendors face however is in what they measure and the methodology that connects these measures to business outcomes. The key to connecting HR decisions to corporate goals comes from analyzing worker skills versus the skills required to meet objectives. The future work of HR practitioners will be the analysis of and closure of the skills gap in organizational and the alignment of talent in the workforce. Then we will start to see some interesting things transpire…
Performance evaluation and metrics is an area that needs to mature and should bring useful tools to HR and organizations. It’s difficult for HR to tie strategies with results and provide significant KPIs for the rest of the business.
BI supporting HRIS is a must!
Good piece. Here are a few immediate thoughts…
1)Do buyers of this technology really know what they want by way of metrics?
2)Can vendors move away from dog-n-pony demos of this technology (BI mostly) and present real-scenario applications of the tool that resonate with the buyer?
3)Will buyers include in the initial purchase follow up services to configure metrics after some time of actual application use? Historically, many buy at the lowest cost (not all) and sacrifice follow up services. Then future approvals for more $ become difficult and therefore result in underutiliztion.
All this to say that technology is great, and maturing, but have we buyers and sellers matured in our buying and selling practices/habits?
Finally, aside from software technology, this economic downturn has returned to us something we often lose by relying too much on technology and that is hiring via direct referrals from trusted sources. Today, new hires are winning from referrals and not resumes. Of course, technology tools like HR/BI, LinkedIN, other social networks, etc. are technology tools being used for referrals through seeing people connections.
I look forward to learning more from your posts.
Thank you all for your comments!
@Keith Those are great questions for the vendors - i hope i can get answers from them, but for now, here’s my opinion on that:
1) it’s not only the matrics. Actually, it should never start with the metrics - that’s something you define when you already have in place processes for recruiting, retention, etc.
2) the vendors that have HR background do it, but i’m not sure about the BI vendors
3) that applies to any business software - it is true that customers more than often choose not to pay for follow up services, which can prove to be an important issue on the long term
your blog is very good i found it interesting.I am in the final semester of my MBA(HR) but i don’t know which line i should choose and from where i can get job oriented knowledge about different specializations of human resource
Thanks for posting. We’re seeing a real change in how workforce analytics are being applied to business issues.
Rather than tracking metrics/KPIs or conducting analysis of HR processes/programs, leading firms are taking business questions - such as what drives sales force productivity - and using a range of data sources (workforce, HR, operations, customer) to test hypotheses.
In this situation, workforce analytics = business analytics and is grounded in real-world application to specific decisions a senior executive must make. That is the true litmus test of workforce analytics.