The business world is undergoing a major transformation, and workforce data is driving it. As technology systems mature, companies are starting to harness the potential of information. Consider these statistics:
- Business analytics forecast $274.3 billion in 2022, up from $215.7 billion in 2021.1
- 50% of companies have increased their use of data analytics since 2020.2
- 75% of Fortune 500 companies will use people analytics and similar types of analytics by 2025.3
- By 2023, according to Gartner, a third of large organizations will use business intelligence technology to make decisions.4
- Lagging organizations could improve profits by 81% by advancing their data practice.5
Business analytics isn’t a new process, but it’s started to penetrate organizations like never before. One particularly dramatic effect is happening in human resources departments with workforce data.
What Is Workforce Data?
Workforce data is up-to-date information about a company’s talent base. It tells HR leaders what they need to know to make decisions that benefit employees, stakeholders, and the company as a whole.
Organizations use workforce data to learn more about everything people-related. That includes:
- Applicant tracking data
- Onboarding records
- Employee demographics
- Benefits and compensation data
- Employee experience survey data
- Promotion and termination records
By collecting, analyzing, and interpreting this kind of data, organizations can see trends as they happen. They can identify patterns in good and bad hires, find out what top performers have in common, and learn what keeps the best talent on board.
These are just a few examples of what HR thought leaders call “people analytics” — an AI-powered trend that’s changing the way companies make personnel decisions. With workforce data at its core, people analytics lets companies be proactive rather than reactive.
What Can You Do With Workforce Data?
Workforce data powers better decision-making within and outside the HR department. Instead of acting based on past patterns and assumptions, HR teams can use data to learn what employees need now. That insight powers smarter and more forward-thinking choices across the board.
Here are just a few things teams can accomplish with quality, well-managed data.
Create Better Benefits Packages
Among recently surveyed hourly workers who were considering a job change for better pay, 64% said they’d stay if their current job offered better benefits.6 More than half of the employees — whether or not they were satisfied with their pay — said they’d accept benefits instead of a pay increase.
But what benefits should an organization offer? Employers need to know how employees feel about their current benefits packages. They can gain this insight by looking at the relationship between changes to benefits and recent employee on-boards or departures.
Workforce data can also provide information on what benefits a team would appreciate, based on their demographics. For example, an organization with many young married professionals may appreciate generous family leave, while an older team might need expanded health benefits.
Build a More Diverse Workplace
Diversity, equity, and inclusion (DEI) is more than just a corporate buzzword. DEI is critical to any organization’s bottom line and reputation as an employer.
According to a recent McKinsey report, organizations with diverse executive teams are 25% more likely to drive above-average profits.7 It makes sense — diverse teams are more capable of innovation. They bring fresher ideas to the table.
More importantly for HR departments, diversity helps to retain and attract top talent.
More than three-quarters of candidates (76%) prioritize staff diversity when choosing an employer.8 That percentage is higher among Black, Hispanic, and LGBTQIA+ employees. Almost 1 in 3 candidates (32%) wouldn’t even apply to a company that lacked diversity.
Workforce data shows a company’s diversity — or lack thereof — in simple terms. HR departments can use this data to visualize workplace demographics in detail, both at an organizational level and by teams.
Companies with strong internal communications can even use workforce data to learn how employees feel about diversity levels. A simple survey can yield important insights about how diverse teams believe a company to be.
Those feelings are just as important as numbers when it comes to retention.
Improve Employee Engagement
The U.S. workforce is less engaged than ever before, and that’s bad news for employers. A 2022 Gallup survey shows that only 32% of U.S. employees are actively engaged, while the number of disengaged employees continues to increase.9
For Gallup’s Exceptional Workplace Award winners, however, the percentage of employee engagement is more than double — a whopping 70%.
Those employers share a commitment to responsiveness and employee well-being. The only way to provide that is to understand team members’ needs and motivations.
Workplace data can provide those insights. Productivity metrics can reveal whether employees are engaging or disengaging with their work. Engaged employees are more productive, according to Gallup research.10
Subjective data, including performance reviews and documentation of manager-employee check-ins, can also reveal levels of engagement. If managers ask the right questions, that data can even provide employee-generated ideas for making the workplace more engaging.
Every hire and exit has information to offer. Without a people analytics strategy, that information can be little more than surface-level — how many people left within a year versus how many came on board, for example.
With workforce data, however, companies can analyze the driving forces behind those staffing changes. For example, by tracking who leaves the company and when, organizations can identify patterns of discontent. HR departments can use people analytics to learn who else might be thinking of leaving.
Strengthen the Onboarding Process
Strong onboarding processes help employees feel more prepared and reach full productivity faster. New hires with great onboarding experiences are more than twice as likely to love their job — yet only 12% of employees think their companies have good onboarding processes.11
Workforce data helps companies deliver top-notch onboarding. With the right data, HR departments can analyze the performance of new hires. They can track retention rates and learn more about how onboarding policies affect employees in the short and long term.
New hire data also helps employers identify the best candidates and make better hiring decisions. With workforce data, HR teams can track the performance of each new hire and learn what the most successful new employees have in common.
From there, hiring departments can prioritize the qualities they want in a candidate. For example, if the data shows a connection between a candidate’s skill certification and performance in the first year, the hiring team can prioritize that certification for similar hires in the future.
Strengthen Employee Career Development
According to a recent survey, employees with access to professional development are 15% more engaged and have 34% better retention rates.12 Workforce data helps reveal what opportunities employees use most, as well as what has the greatest effect on performance.
Assume a company has the resources to offer two types of professional development. What will benefit and engage employees the most?
Survey respondents named tuition reimbursement as their second most desired professional development benefit, just below external and off-site training. Yet reimbursement is the least-offered option among employers.
Workforce data can help companies avoid this kind of disconnect. HR teams can look at what development opportunities had the most engagement. They may even be able to tell which options had the greatest effect on performance. By investing more in those popular and effective options, companies make the most of training dollars.
Prioritize HR Projects
Reactivity is the enemy of success. In today’s rapidly changing world, it’s easy for organizations to notice a trend and then begin playing catch-up. But by then, it’s too late.
There’s also the risk that by focusing too narrowly on industry trends, companies can offer benefits that are a poor fit for their team members. Training and development budgets can be very limited, and few companies can afford to invest in initiatives that won’t pay off.
Workforce data helps HR departments to break this cycle and use resources more effectively. Instead of choosing a project because it worked for another company, teams can identify the most pressing issue and prioritize accordingly.
Drive Higher Revenue
Workforce data offers benefits far beyond the HR department. Organizations can also view and analyze it alongside other business intelligence data, such as customer satisfaction surveys and revenue reports.
This kind of data de-siloing allows companies to see the relationship between workforce trends and organizational performance. For example, what were the costs of a recent hiring push, and how do those costs compare with industry averages?
Companies can also use workforce data to understand the connection between employee performance and revenue. Employee morale and attitudes can have a significant impact on customer experiences, and workforce data helps companies make those connections.
Getting Started with HR Analytics
Every benefit on this list starts with accessible and reliable workforce data. But how do companies access that data and put it to work?
It all starts with an experienced partner. Resourcing Edge helps businesses grow by providing skilled human capital management, from benefits administration to employee data processing.
For companies that are new to workforce data, Resourcing Edge can highlight what matters. Fifteen years of experience and 20,000 client employees have shown Resourcing Edge what makes a great team.
It’s time to tap into the power of your people. Team up with Resourcing Edge today, and see what insights are waiting in your data.