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Workforce Analytics Approach:An emerging Trend of Workforce Management

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 Workforce Analytics Approach: An Emerging Trend of
Workforce Management

Jyotiranjan Hota
Debjani Ghosh
KIIT University
(jyotiranjan_h@yahoo.com)
Volume 7, Number 3 (debjani.ghosh79@gmail.com)
September 2013, pp. 167-179

Workforce management is always a challenge for organizations of all sizes.

Proper workforce planning to evaluate ability and utilization of workforce
provides strategic intent of organizations using workforce analytics. Workforce
analytics can measure the efficiency of workforce, provide correct information
for decision making and improve the productivity of firms through
identification of the loopholes of the workforce management processes. This
paper discusses workforce analytics tools as the best of the breed practices of
workforce management. The paper also discusses the scope and benefits of
using Workforce analytics tools as an aid to workforce planning.
Keywords: workforce management, workforce analytics, workforce planning

1. Introduction
In the current context, workforce decisions should be supported by workforce data
and analytics instead of fully depending on gut feelings and instincts. Harvey (2012)
stated that the global economic crisis has brought sudden interest in the area of
Workforce analytics. During the initial application of Workforce analytics,
departments were ill prepared for the sudden need of the detailed analysis and
reporting on workforce costs and related activities. As per IBM Global Services
Report (2009), the main issue is the way in which organizations of all sizes are
taking decisions of their workforce during economic crises. Many firms have only a
partial understanding of the needs of their current and future workforce. They lack
the insights to identify the top talents and retaining them. So they are unable to
differentiate their value in the market. People are the most important asset of any
firm. Global Chief HR Officer for Ernst & Young said at a recent global workforce
meeting: “Holding onto key talent is like trying to keep frogs in a wheelbarrow”.
Deloitte Consulting treated Workforce analytics as performance analytics which is a
new class of business intelligence that ties human capital management to financial
performance. Ringo (2012) explained that the organizations that use workforce
analytics have the most engaged workforce and they thrive in difficult conditions.
Rouse (2012) stated that workforce analytics is a combination of methodology and
software that applies statistical models to worker related data, allowing enterprise
leaders to optimize human resource management. It is possible to make general and
specific hiring decisions, identify the necessity for new positions, analyze and predict
current and future technological needs and improve recruiting methods with the use
of workforce analytics.
168 AIMS International Journal of Management 7(2)

As per “100 critical human capital questions” adapted from the source of corporate
executive board at nacsonline, Workforce analytics can answer the kind of questions
given below.
a. What is the Head Count by -Grade/Job Class, Company, Location,
Ethnicity, Age Group, etc.?
b. What percentage of our workforce will retire in the next year or next 5
years?
c. What is the average age in our organization? In the last five years has it
increased, decreased or remained the same?
d. What is our ratio of managerial to non-managerial staff? In the last five
years has it increased, decreased or remained the same?
e. How many part-time, temporary or contract employees exist across our
organization? What business units rely on them heavily?
f. What is the average organization tenure? In the last five years has it
increased, decreased or remained the same?
g. What percentage of our current managerial positions is occupied by women
or minorities? How does it vary across our lines of business?
h. Are we compliant with Government regulations? What is the inference from
Affirmative Action Plan analysis?

2. Literature Review
Workforce Management
A century has passed in exploring and systematically understanding the workforce
management. In 1911, Taylor initially attempted a scientific method to develop
measures to capture the effectiveness of the workforce of organizations. Munsterberg
wrote a book relating to industrial and organizational psychology in 1913 .He wrote
in his book on fitting of right kind of workforce for a job, procuring the best
performance for a job and finding the best possible outcome. Bailey (1993) stated
that in case of programmed or structured jobs, contribution of even a highly skilled
and talented workforce will be limited .Because, in these cases, employees knows
their job very clearly .So there is no scope to user their inner ability to design new
and better way of performing the job. HR practices can influence firm performance
through provisions of structures like Quality circles, job rotation and cross functional
structures. Ware and Grantham (2003) explored that there is a great momentum
towards a radical reformation of the approach in which knowledge workers earn a
livelihood .As per the authors, in USA about 15% of the workforce is already
engaged in new way of working the basic nature of work and so also the economic
value of work is also changing. Innovation, collaboration, integration and agility are
the watchdogs of the future work. Mamaghani (2006) investigated how IT
innovations have impacted the workplace and workforce over past decades. He also
discussed the workforce trends relating to Globalization, Telecommuting and
Outsourcing. As per his study, maintaining efficient operations and competitive
advantages require motivation of the workforce to operate from remote places,
development of measures to protect integrity of data and protection of customer
information to check identity theft. Sukumadas and Sawhney (2004) developed and
empirically tested a theoretical model of the impact of many workforce management
practices on workforce agility. The paper suggests managers to adopt employee
Hota, Ghosh 169

involvement practices as a set of tools to improve agility of the workforce. As per the
Aberdeen Research (June 2012), workforce management is a big part of the core HR
portfolio which includes time and attendance, scheduling and absent management. In
this field of practice where self-service tools help individuals to be more involved
with their experience and facilitate managers in taking better decisions.

Workforce Analytics
Workforce analytics enables managers to gather information about different talents
and then develop a strategy of deploying these skills for new business events and
leadership development. It further provides information on several important factors
for the maximization of workforce analytics, which includes defined workforce
challenges, consistency in data collection and making the platform easy to use
(Bereno, 2011).As per Beeline (2012) report, the workflow and productivity of
workforce can be enhanced more efficiently and effectively if we can measure the
human dimension of a firm in a better way. The human element can be quantified
and understood as the essence of workforce analytics. Gartner (2012) explored
workforce analytics as an advanced set of data analysis tools and metrics for
comprehensive workforce performance measurement and improvement. It analyzes
recruitment, staffing, training and development, personnel, and compensation and
benefits, as well as standard ratios that consist of time to fill, cost per hire, accession
rate, retention rate, add rate, replacement rate, time to start and offer acceptance rate.
Kiron et al. (2011) stated in MITSloan management review the concept of analytics
as the use of data and related insights developed through statistical, contextual,
quantitative, predictive, cognitive and other models to drive fact-based planning,
decisions, execution, management, measurement and learning. Analytics may be
descriptive, predictive or prescriptive. Robinson (2012) stated that workforce
Analytics is a combination of methodology and software that applies mathematical
models to worker-related data, allowing leaders to optimize Human Resource
Management. Lesser and Hoffman (2012) explored that analytics does not have to be
a whip used to increase the stroke count associated with extracting more from
individuals. Rather, it can provide the opportunity to build a more effective,
empowered and engaged workforce that increased the value of the larger
organization. As per SAS (2007) report ,HR departments are in demand to shift from
description of past events and reporting towards predicting future events .Predictive
modeling is the latest IT advances.

3. Relevance of Workforce Analytics in Workforce Management

Best companies around the globe should understand the dynamics of the changing
workforce .Henson (2002) explored that employees above the age of 50s are
dedicated for sacrifice and loyalty, those in 40s believe that hard work will bring
them success, employees in age group of 30s try to bring a balance of workplace and
home and new workers in their 20s are tech savvy with realistic approach. In the
current context, the role of minorities and women is increasing and there is also an
increase in contingent workforce. Firms are also changing themselves as per the
attitudes of the workforce of different age group. The first and foremost duty of any
firm is to create flexible environment where top will be interested to be employed.
This is an effort which will facilitate the workforce to come forward and work, feel
170 AIMS International Journal of Management 7(2)

the importance of their work, enjoy the work when they are in workplace and
continue to stay as the company is taking care of them and developing them. Once
Bill Gates remarked “Take away our 20 most important people, and I tell you, we
would become an unimportant company”.

Figure 1 US Census Bureau, International Database 5-10-00

The US Census Bureau statistics signifies that the size of the workforce is
declining. For talent hunting, it is essential to fully understand the workforce. The
US Census Bureau statistics signifies that the size of the workforce is declining
(Figure 1).By 2050, there will be smaller number of people will be available to work
who will be more than 50 years of old. As size of the workforce decreases,
successful companies consistently seek top performers. Lavelle (2007) explored that
workforce planning is a neglected area of HR. There should be a strong tie between
the strategic workforce planning process and management of the ensuing
employment relationships that result when plans are brought to fruition.
Workforce Excellence comes from having the best workforce and deploying it for
advantage .The growth factor of workforce analytics is the highest as shown in
Figure 2.

Figure 2 META Group, Workforce Management Study 2001

Hota, Ghosh 171

Anderson (2004) stated that there are lots of variations in predictive power of
workforce planning metrics used by many firms involved in workforce planning.
May be, these disparities are there as firms rely on data that are convenient to gather,
or because their information systems are limited, or because critical partnerships
have not been formed in order to bring together the most robust and important
information available. All the workforce planners should be aware of the examples
of workforce metric methods and practices which are available. Decision makers
should go through their ERPs and other existing or planned information systems
which have the capacity to tell the workforce planning stories of their organizations.
Decision makers should be open for proper synthesis of workforce planning with
other information’s, directions and strategic documents.Ventana Research (2008)
explored that top performing companies use analytics to realize the full potential of
the workforce. Workforce analytics involves a mix of best practices in people,
process, information and technology for these innovative organizations .This
research found out some benchmarking questions that can help to enhance the
maturity of all four business categories (Table 1).

Table 1 Benchmarking Questions on 4 Business Categories of Workforce Analytics

People
1. Who leads your Workforce Analytics Projects?
2. Who will be the most effective sponsor for the process?
3. Who should attend top-level review meetings?
4. Which areas of the organization actively use metrics and information about the
Workforce?
5. Which functions use workforce analytics as a source for decision-making?
Process
1. What processes are used for generating and delivering workforce analytics?
2. Does your IT organization support your workforce analytics efforts?
3. Does that support include applying data quality and master data Management techniques?
4. How quickly can you generate and deliver metrics?
5. How often do you examine methods to improve your processes?
Information
1. Is easy access to information part of your workforce investment?
2. How satisfied are various groups with currently available Analytics and Metrics?
3. What types of Metrics do you use to judge performance of Workforce Activities?
4. Can people access metrics easily and deliver them to other?
Technology
1. Does workforce analytics and BI software operate across the enterprise?
2. Does it allow monitoring and tracking of workforce performance?
3. Are you using e-mails to communicate metrics?
4. Are you using spreadsheet technology to manage data and metrics?
5. Does your technology have capabilities for modeling and measuring workforce
performance?

4. HR Technology and Trends

HR technology is changing very fast in support of HR workforce practices.
Workforce planning can be traced back to prehistoric times when tribals were given
assignments of hunting and gathering. Chinese kings were identifying right kind of
172 AIMS International Journal of Management 7(2)

servants through specific recruitment tests for specific jobs (ERP Asia, 2011). By the
passage of time ,the manual HR systems were in existence and subsequently
transformed to file oriented computerized systems .To address the fragmented issues
of these systems ,centralized RDBMS systems were used which facilitated easy
reporting for decision making .ERP databases are also based on RDBMS systems
and reporting tools are integrated with these systems for decision making. Now many
medium and small companies are adopting ERP SaaS systems which are based on
subscription models and much cheaper than licensed ERP packages.
However, decisional business issues were difficult to solve in these operational
systems where data integration was difficult. Application of decisional queries to
RDBMS systems affects the day-to-day activities as operational systems are
disturbed when we apply such queries. Subsequently ,Business Intelligence systems
were evolved to address and resolve these issues of RDBMS .BI refers to
technologies, applications and practices for the collection, integration, analysis and
presentation of business information and sometimes to the information itself.BI is
closely associated with Data warehousing and Data Mining .Data warehousing
extract data from multiple sources and with the help of ETL process, the data are
loaded to the DW.BI and Data Mining techniques are applied to explore the hidden
pattern in the data .Tools of BI are MS Excel, LAP Tools, Business Performance
Management Tools and reporting tools. Data access, Analysis, Decision and
implementation time till the action is implemented is reduced in BI systems and so
also the value is saved which is the difference of the values between action
implementation time of operational and BI Systems.

Figure 3 Hackathorn, R.: Minimizing Action Distance (2003), http://www.tdan.com/view-

articles/5132/

Brobst and Rarey (2003) described five stages of Business Intelligence .Stage I is
mainly deals with pre defined batch queries .Stage II is introduced with Ad Hoc
queries .Analytical modeling grows in 3rd stage where apart from analysis
,prediction is possible which is based on analytics. 4th stage is based on continuous
update and time sensitive queries are possible .5th stage is based on event based
triggering (Figure 4).
Hota, Ghosh 173

Figure 4 Brobst, S. and J.Rarey,”Five Stages of Data Warehouse Decision Support

Evolution”, DSSResources.com

As per the SAP University Alliance set up at Victoria University, the most
important application of BI reporting is through dashboards. Dashboards are one of
the styles of BI Applications. There can be performance Dashboards, Metrics
Dashboards and dynamic Dashboards. Performance Dashboards displays a
consolidated view from across the enterprise .Here the workforce are mainly
managers and executives. Consolidation is possible from multiple sources like cubes,
data warehouses and operational databases. Metrics Dashboards are suitable for
aligning firms for common goal. These dashboards display list of metrics, represent
trends and status with graphical indicators and compares to actual goals. Dynamic
content dashboards are suitable for executing better and quicker decisions. These
dashboards allow the workforce to interactively change context of analysis,
synchronize many reports within a single dashboard and embed Analytic workflow
to assist decision making. Dynamic Visualization dashboards are ideal for conveying
more information to users. It displays more data in less space with advanced
visualization, conveys changes over time through animated graphs and provides the
control of analysis to users via interactivity. Kapur (2010) stated that many firms are
gaining insight through the use of BI in multiple areas. However, HRM area is not
completely utilizing BI methodology. Author examined leading features of BI
vendors like SAP, SAS, Oracle and IBM in HRM modules. These vendors claim to
have workforce planning, Workforce Cost Planning, Workforce Benchmarking,
Workforce Process Analytics and Measurement, Strategic Alignment and Talent
Management Analytics functions and features in their software. If firms can utilize
the features, HR will definitely become a value-adding department of organizations.
Hota (2011) states that there is a shift from BI towards Analytics which deals with
extensive use of data, statistical and quantitative analysis, explanatory and predictive
174 AIMS International Journal of Management 7(2)

modeling and fact based decision making. As per Forrester research, self service,
pervasive, social and scalable analytics will dominate the marketplace in recent
future. Pervasive analytics make analytics pervasive across all channels, touch
points, transactions, and business processes. Social analytics eases social network
analysis which collects data from multiple sources, examines and evaluates
effectiveness of relationship. Scalable analytics supports complex databases of all
kinds to scale their Enterprise data warehouse. Self service analytics focuses on
delivering personalized services, helps in quick transactions and increases customer
experience. It also facilitates customers to evaluate various options available to them
and compare the offerings of a firm with other competitors. Self service analytics is a
step ahead of the progress towards self service technology option .Self service
technology supports to build employee self service portals where many operational
activities can be accomplished by the employee. As per a prediction of Gartner and
Forrester in 2011, within few years, Business analytics will be used extensively by
hand held devices, will add scale add scale and computational power through usage
of in-memory functions.
Angie Burke, Director of HRIS and Payroll once said “Consider your
Organizational needs first. Take the time to identify and implement best practices as
opposed to continuing with current practices. While the technology is powerful, what
you are able to get out of it will only be as good as what you have put into it”. Cloud
computing and Software as a Service (SaaS) are also becoming common for medium
and small enterprises .It is also a trend to outsource HR functions and HR
technology. SaaS is based on subscription based delivery model which is cheaper
than licensed based models. Long and Ismail (2011) explored that HR Technology
plays a crucial role in transforming HR Professionals from administrators into
strategic partners of firms. Lack of expertise on HR Technology is a bottleneck for
HR Professionals to turn into a well-integrated strategic partner.
As per Aquire (2011), traditional business intelligence tools lack in the ability to
mine workforce data for trends and insight into human capital performance.
Workforce analytics helps define what to be measured and then uses information and
insight derived from those measurements to drive changes. In the current context,
Workforce Analytics is drawing on the knowledge base developed in Human
resource area and utilizing the data available in fragmented company database along
with the data available in company HRIS systems. The target is same now but the
key difference is that HR can now hold the wisdom encapsulated with the data.
Success Factors, SumTotal, Ultimate Software, Kronos Incorporated, Visier, Acquire
and DoubelStar are few of the vendors of Workforce Analytics which are dominating
the market. Most of this software are based on clouds. Cloud computing and
Software as a Service (SaaS) are becoming prominent for medium and small
enterprises .It is also a trend to outsource HR functions and HR technology. SaaS is
based on subscription based delivery model which is cheaper than licensed based
models. Schramm (2006) stated that progress of workforce analytics is facilitating to
convert HR into a decision science with a measurable impact on business result. New
roles for HR professional are also created. The continuous technological advances
and easy use of web is enabling organizations of all sizes to have access to tools like
time and attendance systems, application tracking software, automated payroll and
networks which ease communication of benefits and facilitates employee self-
Hota, Ghosh 175

service, workforce data and analytics. At the same time, organizations which are able
to make the best use of HR technology are able to save costs while maintaining the
quality of customer service by decreasing the time and resources dedicated to HR
administrative tasks. Use of HR technology is reducing HR cost and administrative
burdens .The trend will also require all HR professional to improve their skills in HR
technology in the years ahead.
Descriptive workforce analytics analyses historical trends whereas Predictive
Workforce Analytics states the happening of the events in future and the kind of
trend will occur in future .Prescriptive Workforce Analytics signifies the best
possible action for an event in a current situation. Key performance indicators and
dashboards are used in case of Descriptive Analytics and Statistical modeling is used
in case of predictive workforce analytics. Prescriptive Analytics uses simulation and
optimization techniques with proper constraints and input to generate
recommendations.

5. Benefits of Workforce Analytics Approach

Henson (2002) explained extraction from a central database of all relevant external
and internal company data, workforce analytics facilitates firms to model, simulate,
report, compare and leverage the most important metrics of HR and the firm
.Workforce analytics also measure HR effectiveness, helps processes for addressing
gaps in labor and skills, derive metrics for benchmark interpretation and trends,
provide compensation and retention planning tools for proactive analysis and support
talent development .Success factors (2012) explored that what-if scenario and
historical trends can be presented in a graphical way by integrating and comparing
raw workforce data through workforce analytics. It is easy for all the stakeholders in
the organization to visualize the impact of the movement of talent on cost hiring
decisions, cost models, career-path initiatives, risk management and succession
planning through modeling capabilities of workforce analytics. Workforce Analytics
can identify and addresses the loopholes in the firm’s talent mix and the solution to
overcome for better business results. Workforce analytics can identify and address
the loopholes in the firm’s talent mix and the solution to overcome for better
business results. As per a report of IBM Global Business Services (2009), workforce
analytics has a vital role in HR migration from a more administrative to a more
strategic area. Workforce analytics also facilitates the owners of various workforce
segments as line managers to make more informed and fact-based decisions about
the performance and compositions of their employees. Integration and analysis of
data from multiple sources requires a consistent analytics platform .Though many
firms have purchased best-of- breed point solutions which highlights metric within a
specific human capital area, they do not provide a full picture of overall
performance. This requires a single platform from which HR professionals and top
management can fetch and interpret data to make fact-based performance and
strategic decisions. Robinson (2012) explored that potential benefits of Workforce
Analytics includes shorten recruiting cycles ,avoidance of costly mistakes to largest
P&L items, Improved retentions and Better training ROI. As per the Aberdeen’s
research, organizations that utilize dashboards and analytics and combine attendance
and time data into its scheduling system are achieving huge gain in business metrics
which includes labor cost reduction and customer satisfaction.
176 AIMS International Journal of Management 7(2)

6. Research Challenges
Analytics can set the pace for business operations. However; many firms are still
unaware of the fact. Faulty realization of cost-benefit analysis and immature
knowledge of analytics of firms tend to shove away the fact driven decision making
approach. The major challenge to widespread analytics adoption in firms is due to
lack of understanding on how to utilize Analytics to improve the business. Most
challenging Analytics adoption faced by firms is cultural and managerial rather than
related to data and technology. (Lavalle et al., 2010) stated that analytics requires
many types of analytical skills such as data integration, Modeling, forecasting and
simulation to explore trends and patterns. Firms have these skills in-house, however
unevenly distributed at each business unit. Marrs (2012) states even if there are lot of
benefits of workforce analytics, the software and science driving analytics is still
complex. Though a HR practitioner’s intention may be good, it can be dangerous if
he/she is inexperienced in handling the analytics tools .Lot of experience and training
are essential to operate the tool. A well known American Humorist and author, Mr.
Mark Twin remarked 100 years ago that “Figures often beguile me, particularly
when I have the arranging of them myself”. There are also legal issues like equally
opportunity laws and privacy during the use of internal workforce data to arrive at a
business decision.

7. Conclusions
Workforce analytics is a new corporate mindset. It can encourage a fresh, animated
psychology and culture of excellence among the workforce. Human intervention and
intuition are also mandatory for successful workforce analytics to understand and
extract the intelligence from the data to better inform business decisions (Beeline,
2012). Kiron et al. (2011) suggested that lack of an adequate analytics strategy is
increasing which is likely to put the future of the current firms in jeopardy. With a
full range of analytics capabilities governed by an integrated analytics strategy,
organizations are better positioned to widen, or narrow, the distance between
themselves and competitors to their own best advantage. However there is no
consistent or unique “best practices” workforce analytics strategy which is a
panacea for all organizations as issues of different types of organizations are
different.

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About Authors

Prof Jyotiranjan Hota is a BE in Computer Science and Engg from NIT Rourkela
and also holds PGDBM Degree from XIM, Bhubaneswar. He is an AIMA –
Accredited Management Teacher and currently working as Associate Professor and
Area Chairperson in the area of Information Systems at School of Management -
KIIT University, Bhubaneswar. His doctoral research is related to Technology
Adoption, Diffusion of Innovation and Innovation Management. He has published a
number of papers in the area of Business Intelligence, Analytics, ERP, e Governance,
IT Entrepreneurship and Banking Technology. Apart from articles in various refereed
journals, he has presented several papers at National and International conferences at
IIMs, Indian Science Congress Association and other Institutes of repute in India and
abroad. He is a member of CSI, Odisha IT Society, Indian Science Congress
 Hota, Ghosh 179

Association and AIMS International. He has discharged the role of Publicity Chair,
Finance Chair, Program Committee Member, Session Chair and Reviewer of various
International Conferences in India and abroad. He has around 15 years of experience
in teaching, Research and software consulting.

Prof Debjani Ghosh is an Assistant Professor of HRM Wing at KIIT School of

Management, Bhubaneswar with 8 years of teaching experience. She has deposited
her Ph.D in the area of Human Resource Management. She has published several
case studies in reputed journals and also presented papers in many International
Conferences of India and abroad. Her areas of interest are Human Resource
Management, Manpower Planning and Retention. She has also been closely
associated with MDPs.

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