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Stop Making Workforce Spending Decisions Blindly: Link People Investments to Business Outcomes

Updated: Jun 17, 2020

The use of workforce analytics by HR professionals is on the rise, but is it translating to better business results? In a Harvard Business Review Analytic Services study, while 67% of CEOs said they get at least a basic set of human capital metrics from HR, only 24% of survey respondents (made up of business and HR leaders) said HR also provides analytics that connect their people metrics to business metrics.

That connection is critical. When business leaders aren’t provided with evidence that links workforce spending to business outcomes, they are forced to make their workforce spending decisions blindly.

Even if you have a dedicated workforce analytics solution, it’s likely your leaders are in the dark when it comes to those key spending decisions. That’s because most solutions focus on internal measures (e.g. turnover rates, time to fill) and engagement survey results that provide interesting information for HR, but don’t help leaders understand the key issues of:

  • Which investments in the workforce are providing the maximum business return

  • Whether to spend less, spend more, or spend differently on the workforce…and why

  • Which workforce areas present the greatest business risks

This deeper understanding about business outcomes is critical for making smart workforce spending decisions. And it is increasingly in demand, not only from business leaders but also from potential investors seeking transparency into risks related to human capital management — in a March article, BlackRock, one of the world’s largest investors, noted that it is in discussions with companies about their management of employees as an investment issue.

A Case Study

Connecting workforce analytics to business outcomes can have a tremendous impact on an organization. Take Bio-Tech (alias), a human therapy manufacturer with 16,500 employees and 16,000 contingent workers that was facing multiple patent expirations and increasing R&D costs. The company, in recognition of the expected business headwinds, had already begun to curtail costs with success, saving at least $45 million through streamlining R&D and restructuring, before undergoing a high-level productivity analysis using workforce analytics to determine next steps. The analysis, using advanced workforce productivity metrics, as well as headcount, high-level talent, and workforce cost data from multiple HR systems, achieved the following benefits:

  • Identified “hot spot” opportunities for productivity and talent management improvements.

  • Created a corporate standard methodology for capturing, tracking, and managing all talent investments moving forward.

  • Achieved $45-90 million in actionable ROI savings and value creation from productivity and Total Cost of Workforce (TCOW) management efforts.

As a result, the company was spending more intelligently on its workforce, and was ready to invest in growth as its new products came through the pipeline.

Tips for Evaluating Solutions

Many workforce analytics solutions are on the market, but Bio-Tech was only able to achieve those key benefits because the solution it used was able to link workforce spending decisions with business outcomes by integrating HR data with financial and operational data.

To maximize the business value you achieve from workforce analytics, make sure any solution you choose provides the C-Suite with the answers to their key questions about workforce spending. Five of those questions are:

  1. Which people investments provide the greatest near-term financial returns and longer-term value?

  2. Can we reduce our total workforce spend and still be a leading performer?

  3. How does our workforce performance link to customer satisfaction, revenue and profits?

  4. How productive is our workforce versus our peers, and how are we trending?

  5. What are our priority workforce risks that will impact the business?

Two other important considerations when evaluating workforce analytics solutions are the use of standardized HR metrics and dynamic visualization and artificial intelligence capabilities. Standardized HR metrics are critical for measuring trends over time and to benchmark your results against peers and industry practice. Meanwhile, dynamic visualization and AI-driven functionality — such as natural language processing and machine learning algorithms — provide predictive insights that are actionable, so that your organization can be more agile with its workforce spending and planning

Business Questions for Your Workforce Analytics Solution

For a full list of 25 questions to consider when evaluating workforce analytics solutions, download our handy guide, “Top 25 Questions to Boost Your Workforce Analytics.”

Discover SOLVE Workforce Intelligence Software

HCMI’s SOLVE™ workforce analytics and planning software uniquely links people investments to key business outcomes for business, HR and analyst users. Visit or contact us at to learn more or to schedule a demo.


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