Putting Analytics to Work

Workforce: What is the driving force behind workforce analytics?

Barkley: Analytics has been around for some time within finance, customer relationship management, and other areas. It has a proven track record. But it has only been within the last couple of years that the area of HR and human capital has begun to receive attention. It’s a soft area, so many people haven’t tried to tackle it. But as vendors such as PeopleSoft, Oracle, SAP, and others have introduced applications, exposure and acceptance is growing.

WF: Which organizations should use workforce analytics?

Barkley: HR-related metrics can provide significant value to any organization. The more accurate questions are: who can afford it--the software is still relatively expensive--and who’s ready to implement it. The reality is that implementation tends to be more complex and time-consuming than for many other applications. That’s not because the software is inherently more complex or difficult to install. It’s because in order to make best use of that software, an organization must pull together data from many different sources. That translates into identifying data sources, data inconsistencies, and so forth.

WF: What are the key benefits of these applications?

Barkley: Organizations have an opportunity to transform basic data into intelligence and knowledge. They can find new ways to analyze business issues and make better decisions--based on specific goals and objectives.

WF: What is the leading use for workforce analytics?

Barkley: Much of the focus is on compensation. These applications can indicate the actual impact of pay increases by showing the relationship with employee performance. They can help a company model how different changes in incentive and benefits could affect productivity among different employee segments. Another question this software can help answer is, Do the employees in the top quartile of the salary range produce proportionally more than those paid in the middle or bottom of the range?

WF: What factors go into choosing a vendor and product?

Barkley: ERP vendors offer products that are most valuable for companies already using their applications. Integration can be relatively simple and, as a result, less expensive. However, companies that have disparate data sitting in an array of systems will probably require a product that can bridge all the different environments.

WF: What is the future of workforce analytics?

Barkley: It is an inevitable part of the HR business. Unless HR departments face this fact and understand and embrace the change that comes with it, some other group within the organization will take the reins and gain the resulting influence and power. This is a way for HR to get a seat at the boardroom table.