There has been log been lip service to the fact that employees are the most valuable assets of any company. Yet there has not been much focus paid by companies in how to apply analytics to optimize their investments in acquiring and developing human capital. If you buy into the phrase “if you can’t measure it then you can’t manage it” then we can all agree that work force optimization has historically been a theoretical practice at best. Many
Jeff revealed five steps companies can follow to bring work force optimization from theory to practice at their companies:
- Ask the right questions:
- Which workforce metrics link to business results?
- What is our workforce productivity? Is it improving?
- Is it better to build, buy or rent talent?
- What size and cost of workforce can we afford?
- Do leaders correlate to employee engagement, retention and performance?
- Think of workforce more as a strategic asset than a cost
- When we view something as a cost our mindset is to minimize it. The mindset needs to be to right-size it and focus more on increasing output rather than minimizing inputs to reach an existing level of output.
- We need to look at productivity in terms of a portfolio of dimension encompassing profit, quality, efficiency and customer satisfaction
- Know the workforce “KPIs” that drive the business
- Human Capital ROI Ratio (i.e. Revenue based return on workforce)
- Return on Human Capital Investment (i.e. Profit based return on workforce)
- Total Cost of Workforce (i.e. Total all in cost of all employees + contingent labor)
- Use a business case for data driven workforce decisions
- Compelling Questions
- Ask the Right Questions
- Objective Measures and Facts
- Historical Data, Key Metric Indicators, Segmented Data
- Powerful Visuals Charts
- Chart(s) that Show Insight (i.e. Story) and Drive Action
- Use Qualitative Story Telling
- “Two of our Top 3 Salespeople came from other industries”
- Link to Business Impact (ROI/Cost/Profit)
- The Cost Savings is a range of $1.0 to $3.0 Million
- Compelling Questions
- Use advanced predictive analytics tools to quantify workforce productivity and talent decisions
A Jeff offered a compelling example to illustrate how this is done
#1. Question) What is our Quality of Hire? Are we hiring better talent?
#2. + #3. Clear data with trend and impactful chart
#4. Written comments with ‘critical insights’ + ‘predictions’
#5. Clear financial impact and ROI
If you want to learn more including how to develop Human Capital Financial Statements I encourage you to watch the webinar recording for Best Practices for Workforce Optimization across the Enterprise.