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Use Workforce Productivity to Drive Growth

Using workforce analytics, management can improve workforce productivity to drive growth and start building a competitive advantage around human capital.

A man working on a machine working in the manufacturing industry

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What would it mean to companies if they could improve talent performance and service delivery level while keeping workforce costs under control? Since a stunning 85% of today’s S&P 500 Market Value derives from human capital, it’s not a surprise that companies are seeking ways to address this challenge, especially for those who trade commodities or compete on margin. This need translates directly into the demand for a better method to measure, track, and benchmark workforce productivity and ROI of their human capital investments.

However, this is not entirely new. Dr. Jac Fitz-enz, the father of workforce analytics, has been promoting these measurements for the past decades. This is also the area recommended by HR professional organizations such as CIPD and required as a part of the Dow Jones Sustainability Index’s assessment as well.

While measuring productivity is important, it’s even more critical to use workforce productivity to boost the business’s bottom line. Below are examples of what HCMI has been doing to help companies improve workforce productivity:

i. Peer Benchmarking

Similar to other Financial and Operational metrics, the primary value of measuring workforce productivity is in analyzing and comparing them over the years with competitors and peers in the same or similar industries, in particular best-in-class companies.

For example, if your organization has an increase in the Total Cost of Workforce (TCOW) of 3.2% and a return on human capital investments of 10%; it is difficult to determine if those numbers are good or bad without a comparison point. Generally, improvement is always good. If competitors’ select metrics are at 4.5% and 18% annual rates respectively, while your organization is able to implement a new mentorship program that will help new hires better prepare for their jobs and raise the percentage of high performers, your organization will win out the competition over time. This is the reason we apply the same evidence-based approach to track workforce productivity performance over the years.

In short, external market analysis using advanced measures can be deeply insightful when compared in a proper context. And it doesn’t stop here. The same concept can also be applied to non-profit and government agency as well.

ii. Improve Productivity by Linking to Other Talent Management Areas

After seeing how your productivity fares against peers and competitors, it’s only natural for management to ask for concrete ROI along with specific policies that will help improve workforce productivity.

While increasing productivity alone is a broad topic, identifying sources of improvement can be accomplished by linking workforce productivity to other potential sources of improvement and using predictive analytics to assess future impacts. The answer can be boiled down to a set of what-if questions similar to those listed below:

  • What if they increase the number of internal hires by 50% for the next year?

  • What if they make the mentorship program a requirement for new sales representatives?

  • How much leadership can impact productivity and what that number is?

By linking productivity to specific talent management policies, practitioners can effectively establish a strong business case that’s (1) relevant to business leaders with (2) concrete ROI and (3) actionable insights. Using the same approach, our analytics experts helped one of the world's biggest package delivery companies measure the impact of their manager leadership on the distribution centers’ productivity and found over $1 billion in ROI annually.


Workforce productivity is a great door opener and a spearhead project for organizations who are looking to improve their talent management practices using workforce analytics and planning.

To learn how leadership affects workforce productivity, download this case study: How Leadership Affects Workforce Productivity


Learn more about our Workforce Productivity Benchmark Analysis by getting in touch with us!

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