Workforce Management to Crunch Data, Costs in 2015

Kachina Shaw
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Top 10 Career Resolutions for 2015

For most organizations, employees, or the human resources, account for the largest percentage of total costs. Northeastern University D’Amore-McKim School of Business Distinguished Professor of Workforce Analytics and Director of the Center for Workforce Analytics Dr. Mark Huselid says the workforce often represents fully 60 to 70 percent of all expenses. Quite clearly, the refinement of workforce management, and attempting to “connect human capital and performance with management strategy and business goals” is a keen point of interest for both HR and upper management.

The fact that a Professor of Workforce Analytics position exists is intriguing, and the sort of academic research that the Center for Workforce Analytics conducts may well result in some rather unexpected outcomes for some industries. Consider this idea, for example: “Most organizations tend to invest in talent hierarchically, where senior-level talent gets the most pay, best development opportunities and other professional perks. However, organizations should be managing vertically in who and what really matters – and in measuring and managing the outcomes associated with these processes.”

In the tech world, the idea of investing a higher percentage of pay and perks in less senior and less experienced employees is not foreign. Raising pay rates and bonuses for, say, highly in-demand developers and designers can often be easily justified in shortened time-to-market or other deliverables. In other areas, though, HR and the business would have a hard time with the concept without some solid predictive numbers.

Advanced analytics, says Professor Huselid, can help a company figure out how to do more of that type of cost management, with less uncertainty about the outcome. But that’ll work only if the data both exists and is readily useable for this purpose. As IT Business Edge’s Loraine Lawson pointed out recently, one of the unanswered questions for many companies is how to deal with the fact that 80 percent of data is unstructured. In the case of workforce data, you might even count yourself lucky if you have tons of unstructured data to painstakingly decipher. More likely, you don’t have much at all, says Anand Srinivasan, writing at Smart Data Collective. Accumulating key data points like why employees leave their positions or what they believe the failings of their departments to be can be next to impossible, in the face of fears of negative results for one’s career and the desire not to burn bridges, Srinivasan says. Until such time as that challenge is reduced (maybe when the robots replace most of the humans), aggregated data analytics like ADP’s monthly Workforce Vitality Report offer workforce metrics to benchmark against.

ADP President of Major Account Services Anish Rajparia, writing at Entrepreneur, says his firm’s 2014 Total Cost of Ownership Study found that “only one in three leaders have done a formal cost analysis of at least one of the five human capital management (HCM) pillars: payroll, employee benefits administration, talent management, human resources administration and time and labor management.” You can’t manage what you haven’t measured, so Rajparia suggests starting by using that list as a five-pillar basis for determining workforce TCO. It’s not simple, but at least it does start with data to which you likely do have access.

And Kronos’ Workforce Institute, made up of internal and external execs in HR and related areas, included data analytics in its list of five big workplace trends for 2015:

  1. Regulations Shake up the Workplace: Minimum wage law changes and looming U.S. Affordable Care Act deadlines dominated 2014 headlines, but 2015 is when organizations will feel the impact of these and many other regulations. Additionally, with continued public discourse on non-exempt workers and topics surrounding a living wage, new legislation is expected to arise in this final term of the Obama Administration. With today’s regulations administered not only at the national and state levels but down to the city, municipal, and individualized union levels, new compliance requirements will shake up processes for organizations while adding another layer of complexity for national and multinational organizations.
  2. Employees are an Asset: Despite increasing health care and labor costs expected through 2015 and beyond, profitable organizations have learned that excellent financial returns do not have to come at the expense of the employee. Research shows that employees – especially the front line, hourly workforce – should be seen as an asset, not a cost. As competition tightens, successful organizations will invest more in their workforces to increase employee engagement and create a virtuous cycle that leads to happy customers.
  3. Seismic Shift in Generational Workforce Dynamics: Baby Boomers – the largest generation to ever hit the workforce – will begin retiring in droves as their children take on more workplace responsibility. As Baby Boomers exit the workplace, many Generation Xers could see increased opportunity, including long-awaited pay raises. Millennials will take on management positions for the first time. Talent retention and career development will be key in 2015 as organizations train new managers while working to simultaneously shrink the skills gap and hold onto the knowledge assets of a retiring workforce.
  4. Analytics for Evidence-based Decision Making: Most organizations drowned in data in 2014, as few have unlocked the secret to analytical success. However, organizations that have lagged behind will take notice of winning Big Data best practices from previous years, while workforce management tools will deliver analytics for evidence-based decision making in 2015. Industry-specific solutions, visualization technology, and new applications from specialized consultation and services vendors will utilize existing workforce management data to create actionable insight.
  5. Consumer Technology Infiltrates Workforce Management: Human resources, operations, and management professionals would be wise to keep an eye on news from the 2015 Consumer Electronics Show, as consumer technologies are poised to dramatically impact workforce management. Mobile devices and social media have transformed the way employees and employers communicate, while gamification and wearable technologies are expected to win in the workplace. Workforce management software suites and mobile platforms will continue to evolve with consumer software design concepts, including increased focus on the user experience (UX), responsive design, flat OS functionality, and drag-and-drop and touchscreen performance.

Get ready for a Big Data crunching, number crunching year in all aspects of workforce management.

Kachina Shaw is managing editor for IT Business Edge and has been writing and editing about IT and the business for 15 years. She writes about IT careers, management, technology trends and managing risk. Follow Kachina on Twitter @Kachina and on Google+

Add Comment      Leave a comment on this blog post
Jan 20, 2015 6:27 AM Leo Leo  says:
Kachina, that was a fantastic article on the potential of workforce analytics, and it's great to learn that a Professor of Workforce Analytics position exists! Reply

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