With the ongoing COVID-19 pandemic threatening a sharp economic slowdown, employee retention is a key objective for most organizations. For many organizations facing a record-high turnover, the cost is going to be in millions of dollars. When the direct costs of replacing talent, interim reduction in labor costs, and costs of productivity lost are taken into account, the total cost of turnover goes as high as $109,676 per employee for an average U.S. organization, according to Bersin by Deloitte research.
Even the most well-intended employee retention strategies can be limited, doing little to increase employee engagement and morale. In most organizations, retention programs are too weak, which increases costs and decreases overall effectiveness.
The answer? Spending your dollars on retention programs that’ll have the most impact. This requires organizations to make use of sophisticated tools and technologies, and adopt a more analytical approach to increase their ability to hire and retain talent.
HR, with its understanding of people analytics, is uniquely positioned in the organization to make strategic workforce decisions with data to back them up.
People analytics is the art of connecting data to dig and share insights about your workforce that will help you make better business decisions. For an organization to reduce turnover rate, leaders need to become more data-driven and seek answers from exploratory analytics and predictive analytics.
According to Paycor’s “Finance’s Guide to the HR Center of Excellence,” 66 percent of CFOs say their HR departments have an “average or worse than average” impact on the organization’s bottom line— this is because the HR department is sitting on a goldmine of data, but it often lacks the support, resources and budget needed to make sense of workforce data. With an analytics platform, HR departments can transform complex workforce data into simple and digestible visualizations to gain insight into their organizations.
Analytics can provide the competitive edge a company needs, by providing deep benchmarking capabilities, business leaders are able to look at how their business is stacking up against the competition today and where they need to be tomorrow.
A good workforce analytics program starts ahead of any platform. Companies need to spend some time understanding what really drives their business. That has to happen in conversation with key leaders around the business. These conversations should lead companies to understand what the most important analytics is that they need to understand to run their business. Once that is done, then you can move to the platform itself. The vision is key though. Without that vision, the platform will end up just being a bunch of visualizations. The key is to make the analytics matter so that people use them on a regular cadence to run their business. Otherwise, it is just a bunch of noise.*
Having a workforce analytics solution enables HR departments to transform complex workforce data into simple and digestible visualizations to gain insight into their organizations. In addition, these types of tools enable HR leaders to informatively answer important workforce questions from stakeholders including: workforce costs and how they’re changing, the risk of critical talent resignations and suggested retention strategies, how to reach diversity goals and many more.
—Ryan Bergstrom, Chief Product Officer, Paycor
EQUIP FRONTLINE WORKERS WITH ACTIONABLE INSIGHTS
Workforce analytics provide a wealth of data-not just about your employees and their performance, but also about the health of the business overall. It's important to consider that your reporting needs will change as your business changes. Having full access to your data, so that you can connect and correlate your workforce data with your existing business intelligence tools, is key to driving deeper insights. Additionally, to really capitalize on the value of workforce analytics, organizations need to equip front-line managers and field managers with actionable insights to help them make smarter decisions in real-time.
One of our retail customers is a well-known pharmacy with nearly 5,000 stores across more than 30 states. One of their key performance goals was for managers to reduce unplanned overtime. With intelligent scheduling and strategic KPIs, they were able to reduce overtime by 7%, resulting in $1.5 million in savings per year. That's a prime example of how workforce analytics can drive business performance across the entire organization.
- Leslie Tarnacki, GPHR, Senior Vice President of Human Resources for WorkForce Software
Understanding workforce analytics means having a sense of what's working and what's not when it comes to individual and group performance. Imagine walking outside to gauge the weather a week from now vs looking at metrologic data through a weather app: if an organization wants to improve performance it better rely on a scientific barometer that can measure and predict performance. An example related to a business outcome is improving employee retention. If a company doesn't have a system measuring all of the factors that we know scientifically contribute to keeping employees committed, then this company is simply watching a retention percentage shift around without any understanding of the underlying factors that could be leveraged to improve retention.
The proven way to think and do workforce analytics is to make sure all of the people in the organization understand 1) what's measured and why; and 2) how the data is generally applied to improve performance. Cultivating work culture begins with providing a safe environment. Introducing workplace analytics risks creating an environment where people feel monitored. When applied well, employees understand the purpose of measuring and analytics is to make work better, and this starts with understanding the baselines of the underlying components of performance so leadership gets a sense of what specifically needs improvement.
- Charley Miller, Founder and CEO, Unitonomy
Armed with people analytics, human resources can overcome the problem of employee turnover with a sharp focus on the need of the hour. A data-driven approach makes it easier to quantify measures that work, helping organizations garner the kind of support that is crucial to retention success.