Workforce Analytics: Definition, How It Works and Tips

By Indeed Editorial Team

Published May 12, 2022

As a business grows more complex and increases its workforce, analysis becomes an important tool for improving how the business works. Workforce analytics helps business leaders understand specific details about their workforce and find areas for improvement. Understanding how workforce analytics works can help you decide whether it can help your business.

In this article, we define workforce analytics and describe many of its aspects to help you determine how to use it to improve your business.

What is workforce analytics?

Workforce analytics is a combination of metrics that measure many aspects of the work done within a workplace. The goal of workforce analytics is to help measure, understand and potentially improve work performance. Because it focuses specifically on the workforce, a human resources department or similar department often performs these analyses. A company can also choose to hire consultants from outside the business to perform the analytics.

How do workplace analytics work?

Performing workplace analytics comprises collecting data about the people who compose a company's workforce and the ways they perform their jobs. Experts trained in workforce analytics can assess a workplace to determine which collection methods might yield the best results for the company. After data collection is complete, these experts analyze the data to determine what facts they can learn about how the workplace operates and how to improve it.

Metrics for workforce analytics

When completing workforce analytics, there are many types of metrics you can choose to track. Often, the type of metrics you track might depend on your specific business or the information you'd like to know. Some of the most popular metrics to track when performing workforce analytics include data on things like:

Productivity
Recruitment success
Hiring trends
Turnover rates
Employee engagement
Employee attendance
General performance
Promotion trends
Training and development performance

How to implement workforce analytics

There are a few steps that can help you implement workforce analytics. These steps can help you outline your goals and determine what data might best help you accomplish them. When implementing workforce analytics, consider the following steps:

1. Establish your goals

Before performing an analysis, it's helpful to understand why you're doing so. Perhaps you hope to better understand your employees' attendance or you'd like to improve performance workflow. Having specific goals can help guide you while running the analytics. With clear goals, you can help your analytics team determine what tests to run and what data to examine.

2. Create an official project document

It's helpful to write down what you hope to accomplish, how you hope to do so and the reasons you're choosing to do it. This can help keep everyone on the team up to date on goals and methods. It can also help keep you and your team on track for finishing the project.

3. Gather data

You and your team can determine which data can best help you reach your goals. Depending on the type of data you want, there are different ways you can collect it. Your team or consultants may have suggestions, but some data collection methods include:

Automated software
Employee surveys
Cloud analytics
Performance trackers
Manual data collection

4. Present results

Visuals such as charts and graphs can help build a better understanding of workforce analytics results. Some software and websites can create a dashboard for you, helping you present your data in a more visual way. To use these, you may need an account and access to the data files. Using such dashboards can help you and others determine how your workforce currently operates and how you might improve it.

5. Create a report

Creating a report can help you determine whether you've met your goals or if the project was a success. A report could comprise what your goals were, what information you learned throughout the project and the changes you hope to make based on the information you learned. It can also help you create new goals, like what effects you hope your forthcoming changes have. You can also use the document to show your employees or team members what you expect and how they can help.

Benefits of workforce analytics

Some of the most common benefits from using workforce analytics data include:

Predicting staffing needs
Improving employee engagement with new processes
Increasing retention rates
Decreasing labor costs by reducing redundancy
Raising recruitment numbers by determining successful strategies

Tips for workforce analytics

Understanding the challenges of a workforce analytics project can help you overcome them or prepare for them before they occur. When performing workforce analytics, consider these tips:

Hire data experts

Collecting data can take time and become complicated. It can also result in what seems like too much data for you to understand or analyze yourself. Experts can help you collect the data, analyze it and interpret it for you so you can have dependable, understandable and actionable information.

Convince your team with evidence

Unless you're the sole proprietor of your business, you may need the approval of a board, partners or other executives to make operational changes. Even if you own the business, you may need to convince others, such as a consultancy firm, to complete the analytics or a bank to help you afford the project. If you have any data that supports your ideas that change might be necessary in the business, present it to those who can help you decide. Having a visual representation can help them understand what you want to do and why you want to do it.

Research software options

Workforce analytics is an area that often advances quickly. Because of this, some data collection and analysis software might currently be outdated. Conducting internet searches or asking an expert can help you determine which software can help you collect and analyze the data you need to meet your goals.