Category: Talent & Market Insights

PeopleScout Australia Jobs Report Analysis – July 2018

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The Australia Bureau of Statistics released its July Labour Force Key Statistics and the Average Weekly Earnings, May 2018 numbers, showing a decrease in employment and missing analyst expectations. The unemployment rate also fell slightly due to a decrease in labour force participation.

Australia Jobs Report Analysis – July 2018

The Numbers


-3,900: The Australian economy lost 3,900 jobs in July.
5.3%: The Australian unemployment rate decreased to 5.3 per cent.
65.5%: Labour force participation decreased to 65.5 per cent.
2.7%: From May 2017 to May 2018, the average weekly earnings of adults increased 2.7 per cent

Upside


While the numbers in the July jobs report are mixed, economists say the overall trend points to a strong economy, according to Business Insider. Experts say the decrease in employment is mainly due to “monthly volatility,” or normal month-to-month variation. Additionally, the loss in jobs can be attributed to part-time employment, as full-time employment actually rose by 19,300 in July. The unemployment rate is also the lowest rate since 2012.


There is also positive news for wage growth in Australia, though it isn’t apparent in the overall number. Staffing Industry Analysts reports that the gender wage gap for adults employed full time has dropped to its lowest point in twenty years. The gender pay gap fell from 15.3 per cent to 14.6 per cent in the past 12 months.

Downside


The decrease in employment is disappointing, as economists had projected an increase of 15,000 jobs in July. Additionally, the decrease in unemployment can be attributed to a decrease in labour force participation.


Wage growth remains slow, and experts say while the economy is strong, it isn’t likely to trigger a stronger increase in wages yet.

Unknown


Looking ahead, economists debate how this month’s numbers impact the country’s slow movement toward full employment, which experts say will occur with an unemployment rate of 5.0 per cent. Growth in 2018 has been slower than 2017, but it continues on a positive trajectory.

PeopleScout UK Jobs Report Analysis — August 2018

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The Office for National Statistics released its August Labour Market Bulletin which reports on the three months of April, May and June 2018. The bulletin reports 42,000 jobs added in the quarter and a decrease in the unemployment rate by 0.2 per cent from the previous quarter. The report is unchanged from last month in showing that average weekly earnings for employees in Great Britain in nominal terms (that is, not adjusted for price inflation, minus bonuses) increased by 2.7 per cent over the last year.

UK Jobs Report Analysis — August 2018

The Numbers

42,000: The economy added 42,000 jobs over the April-June 2018 period.
4.0%: The unemployment fell 0.2 percentage points from the previous quarter.
2.7%: Wages (excluding bonuses) increased 2.7 per cent over the last year.

The Good

UK unemployment fell by 65,000 to 1.36 million in three months of April, May and June – the lowest in more than 40 years. The unemployment rate has not been lower since December 1974 through February 1975.  Compared to one year ago, 313,000 more people are working in the UK. For people between 16- and 64-years old, 75.6 per cent are working, up from 75.1 per cent a year earlier. For women between 16-and 64-years old, 71.0 per cent are employed, up from 70.5 per cent a year earlier. The employment rate for men in the same age range, 80.1 per cent are working; the employment rate for men has not been higher since February to April 1991.

The Bad

The lackluster rate of wage increases may create challenges for employers who may see an increasing number of employees look for new jobs as the most direct path to raise their wages in a healthy job market. While the wage increase still outpaces inflation, there is doubt as to whether this will have a significant impact on the overall economy.

As Bloomberg notes:


“There remains precious little sign that wage growth is set to take-off – undermining a key assumption behind the Monetary Policy Committee’s recent decision to raise rates,” said Suren Thiru, head of economics at the British Chambers of Commerce. “The pace at which pay is exceeding price growth remains negligible, and is therefore unlikely to provide much respite to the financially squeezed consumer.”

The Unknown

The ONS figures show the number of European Union nationals working in the UK fell by a record amount. This decrease was the largest annual amount since records began in 1997 and continues a trend seen since the 2016 Brexit vote. This decrease contrasts with a rise in the number of non-EU nationals working in the UK to 1.27 million, which is 74,000 more than a year earlier. Without determining the status of EU nationals working in Britain after a final Brexit settlement, the composition of the UK labour force in both the near and long-term remains uncertain.

PeopleScout Canada Jobs Report Analysis — July 2018

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Canada Jobs Report Analysis — July 2018

Statistics Canada released its July 2018 Labour Force Survey which shows 54,100 jobs added to the Canadian economy. That number impressively exceeded analyst expectations of 17,000. Unemployment fell by 0.2 percentage points to 5.8 per cent, a four-decade low. Wage growth slowed from previous months, and the bulk of the job growth came from part-time jobs.


The Numbers

54,100: The economy added 54,100 jobs in July.
5.8%: The unemployment rate fell to 5.8 per cent.
3.2%: Wages increased 3.2 percent over the last year.

The Good

Strong employment gains were made in major service-producing sectors including educational services; health care and social assistance; and information, culture and recreation. Over a one year period, employment grew by 246,000 (+1.3 per cent). These gains were largely the result of growth in full-time work (+211,000 or +1.4 per cent).
For the core-aged (25 to 54) population, employment increased by 35,000, boosted by gains among women (+30,000). The unemployment rate for women in this age group was down 0.3 percentage points to 4.9 per cent. Over a one year period, employment grew for both women (+72,000 or +1.2 per cent) and men (+41,000 or +0.6 per cent) in the core-aged group.

The Bad

According to the July report, Canada added 82,000 less desirable, part-time positions last month and lost 28,000 full-time jobs. The overall positive impact on the economy is diminished by the smaller income available to Canadian families than if the gains had been made in full-time positions.
The public sector made the biggest contribution to the July increase with 49,600 new jobs, while the private sector added only 5,200 positions. National Bank of Canada chief economist Stefane Marion wrote in a report Friday that the public sector is the “only game in town” so far in 2018. Marion’s research note was titled, “Where are the private sector jobs?”

The Unknown

Canadian analysts noted the mixed messages from July’s report. CTV News cited a research note from the Canadian Imperial Bank of Commerce, “In the wacky world of Canada’s monthly employment numbers, July came up with another head-scratcher, with some big headlines but some disappointments in the fine print,” CIBC chief economist Avery Shenfeld wrote Friday in a research note to clients.
Shenfeld added that there are “lots of reasons to question just how good the data really are here.”
Overall, he said the report contained a “good” set of numbers that will keep markets guessing whether the Bank of Canada will introduce its next interest rate hike in September or October. CIBC predicts the next rate increase will land in October as the central bank continues to proceed cautiously along its rate-hiking path.

PeopleScout U.S. Jobs Report Analysis — July 2018

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U.S. Jobs Report Analysis — July 2018

The Labor Department released its July jobs report which shows 157,000 jobs added to the U.S. economy, continuing the longest stretch of job growth in the nation’s history. The unemployment rate fell 0.1 percentage points to 3.9 percent from the previous month.

The Numbers

157,000: The economy added 157,000 jobs in July.
3.9%: The unemployment rate fell to 3.9 percent.
2.7%: Wages increased 2.7 percent over the last year.

The Good

The July jobs report shows continuing and steady job growth. Although the increase in jobs last month came in slightly below expectations, figures for payroll increases in May and June were revised substantially higher. The Labor Department reported that the economy added 268,000 jobs in May, up from an initial estimate of 244,000, while the June gain was revised upward to 248,000 from 213,000.
Healthy expansion continued in key sectors of the economy including manufacturing with an annual increase of 327,000 jobs and business and professional services, which grew by 518,000 positions in the last year.

The Bad

The 2.7 percent annual increase in wages reported in July is not significantly different from the wage growth figures over the last two years. While the burden of major salary increases has not yet directly impacted employers, wage stagnation can create challenges in employee retention.  Wages have remained steady while the cost of living has increased for many Americans. For example, it is estimated that home prices are growing twice as fast as income growth.  In the current job market, candidates can be reasonably confident that there will another job waiting for them if they leave their current position. Because research shows that money is the top motivator for employees to quit their jobs, there is significant urgency for employers to have sound recruitment and retention programs in place.

The Unknown

The recently imposed tariffs on U.S. trading partners does not yet appear to have affected the domestic job market. However, threats of an all-out trade war with China may force employers to rein in hiring projections. It has been estimated that trade with China supports as many as 2.6 million U.S. jobs, and a sharp and sudden decrease in trade with China could have a significant negative impact on the U.S. economy.

PeopleScout Australia Jobs Report Analysis – June 2018

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The Australia Bureau of Statistics released its June Labour Force Key Statistics. The increase in employment by 50,900 beat analyst expectations and is the strongest job growth since last November. Unlike May, the increase was led by full-time jobs. The unemployment rate held steady at 5.4 per cent, in part due to the increase in Australians participating in the labour force.

Australia Jobs Report Analysis – June 2018

The Numbers


50,900: The Australian economy added 50,900 jobs in June.
5.4%: The Australian unemployment rate remained at 5.4 per cent.
65.7%: Labour force participation increased to 65.5 per cent.
+6: According to the NAB, the business confidence index fell to +6 index points.

Upside


The net job gain of 50,900 in June continued the trend of monthly job growth. Since June 2017, full-time employment has increased by 158,200 and part-time employment has increased by 180,800.


The increase in the labour force participation rate can be explained by more Australians having confidence in finding a job. In seasonally adjusted terms, the largest increase in employment was in New South Wales (27,300), followed by Queensland (14,800).


The chief economist head of research, Asia-Pacific for ING noted the significance of the increase in full-time jobs in the Financial Times:


“Strong growth in full-time jobs in June helped to shift a labour market that was beginning to be dominated by part-time jobs. Our full-time equivalence measure suggests that labour demand is now picking up strength. Were this to also be reflected in some improved wages growth, it could radically change the outlook for the Reserve Bank of Australia, which most forecasters see on hold all this year, and possibly all of next year too.”

Downside


According to a study released in June by the Reserve Bank of Australia, the unemployment rate for people between 15- and 24-years-old in Australia is seven points higher than the national unemployment rate. Though this rate has historically been higher than for the rest of the population, Australia has an aging workforce. Businesses need to urgently address the challenge of attracting the right talent from the nation’s younger generation.

Unknown


An opinion piece in Bloomberg notes the shifts in Australia’s key relationships which could drastically impact its economy:


“The most significant are two related shifts. The first is changing relations between Australia’s biggest trading partner, China, and the guarantor of Australian security, the U.S. The second is the nature of Australia’s relationship with each of them. China’s growth is slowing, and its economy is driven less by investment and exports and more by domestic consumption. That means a waning appetite for the raw materials Australia sells it even as China’s economy grows bigger overall. And at some point, China may well have its own recession. Nothing lasts forever.”

How to Leverage Workforce Analytics and HR Data in Workforce Planning

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According to a survey conducted by Harvard Business Review, 15 percent of respondents said they use “predictive analytics based on HR data and data from other sources within or outside the organization,” while 48 percent predicted they would be doing so in two years.

While organizations are increasingly incorporating data into the HR mix, there are still areas for improvement and to further adopt workforce analytics. Below, we outline some of the best practices for building an analytics-oriented workforce planning program along with some of the analytics processes essential for success.

Building an Analytics-Oriented HR Data Team

Organizations need to solicit input from a variety of stakeholders like talent acquisition program managers, human resource leaders, data specialists, budget and finance leaders and IT specialists to create a multidisciplinary team. When building your team, considering the following:

  • Does your organization have an individual with experience and expertise in data analysis with the leadership skills to manage a workforce analytics team?
  • Does the team you have assembled include analysts with data management, statistics and data visualization skills?
  • Do you have your IT department’s support to choose the right tools to integrate HR data with other data sources in the organization?
  • Can your team confidently present data-oriented solutions to senior leadership even if the solutions are counter to past workforce plans?

Collecting the Right Data

Collecting essential data points is a key step in a data-driven HR program. The data needed for analysis may come from multiple divisions within an organization. Organizations need to communicate the importance of sharing data with leaders organization-wide. Evaluating current internal HR data can help organizations identify future needs and draft a workforce strategy around them. Below is a list of data needed for workforce analytics.

Internal HR data:

  • What are the demographics of the current workforce? (Gender, ethnicity, disabilities, full/part-time, etc.)
  • How many people work in each position?
  • Where are positions located?
  • What is the employee to supervisor ratio?
  • What are the pay rates of current employees?
  • What is the likelihood of attrition through retirement?
  • What recruitment activities have been completed in the last two to three years?
  • What recruitment activities and resources were used?
  • How many qualified applicants were found?
  • Where did the most qualified applicants come from?
  • What do new employees think of your recruitment practices?
  • How many employees are needed to fill each position?
  • What knowledge, skills, competencies and abilities are needed to perform anticipated job functions?
  • What processes could be done more efficiently or effectively?
  • What are the organization’s strategic objectives?
  • What are the organization’s diversity objectives?

External Data Sources

Many organizations have inward-focused approach to workforce analytics and HR data and do not take into account what is going on outside the organization. The labor market is rapidly changing. Labor market data can inform organizations about talent supply in different locations and provide critical market intelligence on issues like competitiveness and salary range.

Data and job projection reports from the U.S. Department of Labor’s Bureau of Labor Statistics, for example, can lead to a better understanding of the supply and demand for essential occupations and the competitiveness of the job market.

Putting HR Data in Action  

Organizations should take the insights gained through workforce analytics initiatives and develop a workforce plan to fill the gaps between current and future hiring needs. Some strategies and considerations when drafting a data-oriented workforce plan include:

  • Plan for employees to receive skills training when needed to prepare for changing roles within the company.
  • Hire and retain employees with skills that are critical to the success of the business.
  • Create programs focused on employee retention.
  • Increase efficiencies in recruitment and hiring processes by proactively identifying vacancies through succession planning and forecasting future business requirements.
  • Identify training needs, classification and compensation issues, organizational or position changes that may affect employee retention.
  • Create workplace diversity strategies to reach organizational diversity goals.

Managing a Workforce Analytics Program and HR Data

Workforce analytics is a continuous process that is highly susceptible to changes in the economy and labor market. To stay on top of new developments, organizations need to ensure their workforce analytics process is managed properly. Below, we share advice on how to best manage a workforce analytics program.

Prioritize Business Goals

For workforce analytics to drive real value, it has to be aligned with an organization’s business goals. Everyone contributing to workforce analytics process needs to be briefed on the overarching business strategies, so they can understand how their analysis contributes.

Common workforce goals include:

  • Reduce turnover on a particular team or organization-wide
  • Retain high-performing individuals
  • Improve staffing and recruiting efficiency
  • Lower the cost of operations
  • Ensure the organization has talent aligned to expansion plans or planned new product offerings

Stakeholder Management

Because workforce analytics involve stakeholders from HR, finance, IT and others within an organization, clear and open communication should be emphasized early in the process. This will help stakeholders and their teams understand expectations up front and establish relationships between teams for success.

Data Quality

At the start of a workforce analytics initiative, it makes sense for organizations to conduct basic data hygiene practices like assessing the quality of data, gauging the need for data clean-up and documenting data-gathering and reporting processes.

Data Governance

Because employee data is personal, privacy rules must be respected. Proper data governance should be the responsibility of everyone involved in workforce analytics. However, someone should be assigned ownership to ensure that data and HR teams are following the processes established for data security.

Flexibility

Economic and business climates are not static; even the best workforce analytics program may miss emerging talent shortages or inadequately take certain contingencies into account. To make sure workforce analytics program reflect the latest internal and external developments, organizations should regularly re-calibrate and revise assumptions made from previous HR data analysis.

RPO Providers Can Assist Organizations with Workforce Planning, HR Data and Analytics

There is no one-size-fits-all workforce planning program, even for global organizations that have similar needs. What’s right for one organization may not be what another organization needs.

However, workforce planning does not have to be mysterious or complex. Organizations more than likely have a lot of the data they need, it is just a matter of creating the right management and reporting practices to interpret the data in meaningful ways.

The right RPO partner can help organizations make sense of their workforce analytics with their experience and deep understanding of labor market data and trends. An RPO partner can also work with an organization to create methodologies adapted to suit their needs. Click here to learn more about PeopleScout’s RPO solutions.

PeopleScout Canada Jobs Report Analysis — June 2018

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Canada Jobs Report Analysis — June 2018

Statistics Canada released its June 2018 Labour Force Survey which shows 32,000 jobs added to the Canadian economy. While unemployment rose by 0.2 percentage points to 6.0 percent, this was due to an increase in job seekers.

The Numbers

32,000: The economy added 32,000 jobs in June.
6.0%: The unemployment rate rose to 6.0 percent.
3.6%: Wages increased 3.6 percent over the last year.

The Good

The 32,000 jobs added in June beat analyst expectations. Many of the gains were in important sectors like construction, manufacturing and natural resources. The rise in the unemployment rate is due to the addition of nearly 76,000 job seekers to the labour force which suggests that more Canadians are optimistic that they can find work due to the strong economy. Year-over-year wage growth is relatively strong at 3.6 percent.

The Bad

The aggregate job gain figures in June do not tell the whole story. Canada added only 9,100 full-time jobs in June and 22,700 part-time positions. The services sectors lost 14,700 jobs mostly because of big decreases in accommodation and food services positions. The wholesale and retail trade also had a significant decrease in jobs last month.
Additionally, the job gains only came from three provinces: Ontario, Saskatchewan and Manitoba. Everywhere else the market either shed jobs or remained flat.

The Unknown

Trade uncertainties with the U.S. cast the biggest shadow over economic forecasts for the coming months. NAFTA renegotiations dominate and undermine the outlook for the export sector. This is particularly important for the non-energy sector, which has already had several industries being subjected to tariffs this year.
Additionally, these numbers were released just days before the Bank of Canada’s decision on interest rates. Analysts expect that despite the trade concerns, employment and wage growth numbers are strong enough to prompt an increase in the benchmark.

PeopleScout U.S. Jobs Report Analysis — June 2018

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The Labor Department released its June jobs report which shows 213,000 jobs added to the U.S. economy – continuing the longest stretch of job growth in the nation’s history. Increased participation in the labor market brought the unemployment rate up to 4.0 percent.

The Numbers

213,000: The economy added 213,000 jobs in June.
4.0%: The unemployment rate rose to 4.0 percent.
2.7%: Wages increased 2.7 percent over the last year.

The Good

The 213,000 jobs added in June beat analyst expectations. The rise in the unemployment rate by 0.2 percentage points is not bad news because it was caused by the increase in the workforce. Americans who have been sitting on the sidelines of the job market are being drawn in by the strong hiring environment.
Year over year job growth for many major sectors is impressive. In the last year, manufacturing has added 285,000 jobs; business and professional services increased by 521,000 jobs and employment in healthcare rose by 309,000.

The Bad

The tight labor market is having a negative impact on seasonal hires. The shortage of summer seasonal workers such as lifeguards is causing curtailing of services and higher wages, the cost of which may be passed onto consumers.
The U6, which is the unemployment measure that includes those too discouraged to look for work and workers in part-time jobs who want to work full-time, rose to 7.8 percent from 7.6 percent in May. The U-6 remains somewhat elevated compared to the last time unemployment was similarly low.

The Unknown

It is unclear how much the labor force can expand due to an aging population. With job openings continuing to increase, there is no clear path for how to attract those who have stayed outside the workforce in recent years.
While some hiring has been scaled back due to recently imposed tariffs and fears of a full-scale trade war, uncertainty remains regarding future commodity prices and inventory shortfalls which can have a profound effect on the nation’s economic health.

2018 Q2 Economic Snapshot

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Very strong job growth and low unemployment were the headlines in many of the world’s leading economies in the second quarter of 2018.

However, employers were faced with the increasingly difficult tasks of attracting and retaining talent in a historically tight labor market and responding to impending wage pressures. Uncertainties in the labor supply created by Brexit and immigration restrictions were exacerbated by the introduction of tariffs by the U.S. and the threat of trade wars in the coming months.

Strong Job Markets


Robust job markets and low unemployment were the major headlines in many of the world’s largest economies in the second quarter of 2018. In the United States, the number of job openings reached a record high. In the UK, the unemployment rate was at its lowest point in over 40 years. Canada continued to experience record low unemployment and Australia had consecutive months of job gains.


Faced with the tightest job markets in recent years, employers are focused on effective strategies to attract and retain talent. The difficult hiring environment is leading companies to rethink established norms in their recruitment processes. The strong demand for talent is showing no signs of easing. Companies seeking to compete successfully should consider developing strategic partnerships with organizations that can provide intelligence and expertise in recruitment and retaining talent.

Wages – The End of Stagnation


Wage pressures have intensified in response to the robust labor market. In the U.S., the period of relative stagnation in wage growth is perceived to be ending. In the UK, salaries for new positions rose at their fastest rate in three years. Canadian workers experienced their biggest wage increase in nearly a decade. And even without significant inflation, the national minimum wage in Australia is slated to increase 3.5 percent on July 1, potentially impacting salaries nationwide.


With record job openings available in many markets, employees are increasingly confident that they can easily find a new job. Since the top reason for workers to find a new job is to increase their salary, employers face the dual challenge of adjusting their wages as needed to retain their current workers and set starting salaries for new jobs at levels that will attract talent. Arriving at wage levels that will not unnecessarily strain profit margins is becoming an increasingly important task for human resource professionals.

Barriers to the Free Movement of Talent


Uncertainty over the availability of talent comprised of foreign nationals due to Brexit and immigration restrictions in the U.S. continued to raise concern. In the UK, sectors such as social care, technology and hospitality could be impacted especially hard. A recent survey found that one in ten hospitality workers are considering leaving the UK due to Brexit. The same survey found that 18 percent of hospitality managers are finding that recruiting new staff is more difficult due to Britain’s status change with the EU. In the U.S., restrictive immigration policies are blamed for the stall in IT job growth. Adding to the uncertainty of the U.S. workforce, the future status of the more than 600,000 U.S. residents granted permission to live and work under the Delayed Action for Childhood Arrivals (DACA) act was left unsettled by the U.S. Congress.


The policy-driven talent shortages in some countries are contrasted by others such as Japan and Canada that are making efforts to attract talent from abroad. The ambiguities in possible policy decisions regarding immigration and the free movement of labor drive the need for employers to craft flexible recruitment programs. Companies that find it difficult to find full-time talent may want to consider Managed Service Providers (MSPs) that provide scalability through contingent labor.

Social Media, Privacy and Sourcing


There are important developments affecting the way employers utilize social media for recruitment and employer branding. New regulations in Europe under GDPR went into effect on May 25. GDPR requires businesses to protect the personal data and privacy of EU citizens for transactions that occur within EU member states. GDPR applies to any collection of data for those living or working in the EU, regardless of the location of the organization accessing this data. The new rules include notification requirements, up-front security measures and other privacy safeguards.


The data breach at Facebook, the world’s largest social media platform, impacted 87 million users whose personal data may have been unknowingly shared with Cambridge Analytica. A study released in April showed that confidence in Facebook dropped by 66 percent since the Cambridge Analytica scandal emerged. In addition to implementing new compliance requirements necessitated by GDPR, businesses may need to review and adjust their recruitment and marketing practices in order to be effective in the evolving social media landscape.

Addressing the Skills Gap Part I: Apprenticeships


Employers that are struggling to find talent with the right skills can turn to a solution that pre-dates the industrial revolution: apprenticeships. Apprenticeships enable workers to gain valuable skills and experience so that they can be fully productive employees at a future date. In the United States, the Department of Labor announced resources for apprenticeships as part of a public/private partnership. For example, employers can apply for registered apprenticeships and create “on-the-job training contracts” and have costs reimbursed for up to 50 percent of wage rates paid to participants for up to six months.


In June, it was announced that the Skilling Australians Fund will be providing AUD 1.5 Billion to create as many as 300,000 apprenticeships. Public resources for apprenticeships are available throughout the EU, the UK, Canada and many other countries. To successfully incorporate apprentice programs as part of an overall talent attraction and training strategy, and learn the steps to take to access public funds, organizations can utilize the expertise of a Recruitment Process Outsourcing (RPO) company to ensure that its workforce has the right skills to succeed for many years to come.

Key Takeaways for Employers


Historically strong job markets combined with the uncertainties brought about by restrictions in immigration and trade requires employers to be both intelligent and agile in attracting and retaining talent. Organizations can expect to reap the benefits of a strong economy only if they have the talent to support the growth that can be generated by a prosperous environment.

Workforce Planning: Leveraging Workforce Analytics for Deeper Insights

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Workforce analytics are changing the game. To stay competitive in the modern and complex business landscape, organizations need to leverage technology to make more strategic decisions. Many are using big data and analytics to achieve these aims. In fact, 80 percent of executives say their big data investments have been successful, and almost half say their organizations can measure the benefits from their projects.

What’s more, according to Harvard Business Review, organizations that excel in data-driven decision-making are more productive and more profitable than their competitors on average.

Workforce analytics combines statistical analysis and predictive modeling to help organizations make fact-based talent acquisition and management decisions. In this post, we outline how to leverage analytics as part of the workforce planning process.

What is Workforce Planning and What Role do Analytics Play in the Process?

workforce analytics

Traditionally, workforce planning has been a reactive way of assessing workforce needs. Organizations typically make annual talent forecasts for how many hires are needed in a role, and those estimates happen before the end of a fiscal year as part of the budget-planning process. This approach to workforce planning lacks the flexibility needed to remain agile and competitive in an evolving and dynamic labor market.

Modern, data-driven workforce planning focuses on the future by assessing current hiring needs and modeling how those needs will evolve. Workforce analytics is the cornerstone of modern workforce planning.

Workforce analytics gathers and analyzes data to better inform decisions made in of the process of workforce planning, resulting in the formation of a strategic plan to address workforce challenges. This data-focused approach can assist organizations to match talent forecasts with analysis of the talent pool to create a realistic view of the labor market.

When workforce planning is combined with workforce analytics, organizations are better able to predict future leaders within the organization, craft succession plans for critical positions and recruit the right talent.

Types of Workforce Analytics

Data analytics has become common across many business functions, from logistics to finance. As organizations look to overcome the skills gap, full-employment and record retirement, they need to develop a systematic process for identifying workforce needs, develop strategies to meet those requirements and implementing them effectively. Below we list three data analytics techniques essential to workforce planning that can help organizations meet changing demands now and in the future.

Predictive Analytics 

Predictive analytics leverages historical data to create predictive models that anticipate what is likely to happen in areas such as employee turnover, skills shortages and shifts in the labor market. By incorporating predictive analytics into workforce planning, techniques such as regression analysis, forecasting, multivariate statistics and pattern matching enable an organization’s leadership to understand likely talent outcomes and needs of the future.

Diagnostic Analytics

Diagnostic analytics helps contextualize past performance by evaluating performance-based metrics in an attempt to discover the reasons behind past workforce successes or failures. Diagnostic analytics is essential in workforce planning because it can provide organizations with a clearer picture of key workforce performance metrics and trends. The data can then be leveraged to identify unseen workforce performance issues. Armed with insights gleaned from diagnostic analytics organizations can better optimize their workforce plan to align with performance goals.

Prescriptive Analytics 

Similar to predictive analytics, prescriptive analytics uses the same sets of historical workforce data to anticipate the likelihood of specific results or events. What makes prescriptive analytics different is that the data is then leveraged to plan the best next actions based on those predictions. Prescriptive analytics is extremely valuable in workforce planning because it uses available data to recommend measures that could increase the likelihood of desired business and staffing outcomes occurring.

These techniques can provide organizations with concrete and actionable insights on workforce data and help drive better talent strategies. Talent technology solutions such as PeopleScout’s propriety technology, Affinixtm, can help organizations better leverage these techniques and deliver additional value to workforce planning.

Benefits of Workforce Analytics

While the most obvious benefits are related to time savings, dollars saved and earned, percentage changes, and proof of ROI, there are less tangible benefits of workforce analytics that HR leaders often discover after they have started with their solution. These are benefits related to organizational alignment, team cohesion and company culture. While these benefits are more difficult to measure in concrete terms, they are definitely connected to business outcomes. In the following section, we outline two ways workforce analytics can improve and organizations talent management and recruiting programs.

Improving Retention and Employee Performance

Detailed analytics can help organizations identify top performers, foster successful employee retention and talent recruitment programs and ensure the proper workforce is in place to accomplish business goals and objectives.

Furthermore, an employee’s performance data could be used by hiring managers to identify what motivates an organization’s top talents. This data not only provides more insights about the employees but also shape the strategies to boost the employee morale, retention and engagement.

Improved Hiring Decision With

Workforce analytics make predictive analysis easier and helps HR to make a better choice based on historical data. A great HR analytics tool can make the difference by making the HR easily derive the best candidate to hire from the historical data.

For example, if an organization hired 20 candidates and 10 out of them are from a particular background failed at it, organizations can avoid hiring candidates from a similar background. Moreover, workforce analytics also allows recruiters to learn more about candidates through an online resume database, applications, social media profiles to learn which traits and attributes are associated with top performers in a certain role.

Conclusion

Today, HR leaders make use of analytics solutions to realize deeper insight into the workforce in order to fuel evidence-based decisions and improve business outcomes. An experienced RPO partner with a consultative approach can help organizations better understand their workforce and tailor talent acquisition strategies to match the client’s goals and objectives and which metrics can best determine the desired impact.