This week, our Workforce Analytics Manager, Stephen Weltz, briefly explains Workforce Planning, its importance, and what we recommend to our clients. If have any questions about Workforce Planning or Workforce Analytics, do reach out to us by clicking the button below or email us at info@hcminst.com

Due to the “Great Resignation” currently happening, especially in the tech industry, companies are struggling in crafting the best strategies in order to win the best talents that can greatly contribute to the growth of their companies. Watch our HCMI Connects webinar video below where our CEO, Jeff Higgins will go in-depth on this topic and share some potential data-driven solutions that can help recruiters from around the globe. Webinar Video About the Presenter Jeff Higgins CEO & Founder, HCMI Jeff is a global thought leader with more than 25 years of combined workforce planning, analytics, and finance experience supporting Fortune™ 500 companies. Jeff has helped organizations around the world quantify the ROI of workforce decisions and realize cost-saving opportunities of up to $1.0 billion USD. Jeff is both a former senior HR executive and former CFO, and a regular speaker at HR events. Previously, Mr. Higgins worked in finance at Johnson & Johnson, Colgate Palmolive, Klune Industries and was a senior HR leader at Countrywide Financial, IndyMac Bank, and Inform, a leading analytics software co. Jeff is on the SHRM Global Standards Committee on human capital, the Center for Talent Reporting board, and a founding member of PwC Saratoga Institute advisory council.

Employee engagement is not the same as employee happiness or satisfaction. These terms are often misunderstood and misrepresented in reports. Employee satisfaction and happiness only indicate the level of content of the workforce with their current responsibilities, environment, and team. They are more concerned with retention and do not take into consideration the additional efforts and results generated by highly rated employees. Employee engagement describes the relationship between an organization and its employees. It shows the extent to which employees are passionate about their work, put discretionary effort into their job, and stay committed to the organization’s objectives. Highly engaged tend to feel more connected to the organization’s vision and mission, retain better, and are more likely to go beyond their job descriptions. This guide helps HR teams adopt a more data-driven approach to measuring, tracking, and thinking about employee engagement. It will explain in-depth what employee engagement analytics is about, the potential impact, as well as the kind of questions it can help answer. Real-life examples and best practice tips are also included. Table of Contents What is Employee Engagement Analytics? Benefits of Employee Engagement Analytics Use Cases for Employee Engagement Analytics Top Employee Engagement Metrics Requirements for A Successful HR (Human Resource) Analytics Initiative What is Employee Engagement Analytics? Employee engagement analytics refers to the practice of data-driven decision-making by merging employee engagement with other HR and non-HR data sources to identify drivers of retention and satisfaction. Employee engagement analytics is a subcategory of workforce analytics and standard modern practice in advanced employee management and retention. Employee engagement analytics benefits all stakeholders within the organization. For executives, analytics gives them the ability to measure the impact employee engagement is bringing to the organization and better incorporate them into the overall business strategy. For line managers, this brings never seen before details about their team. For HR leaders, analytics help them leverage and make sense of the wealth of data that they currently have on their hands but not utilizing. Benefits of Employee Engagement Analytics Employee engagement analytics has many benefits. For instance, it helps you better understand the ongoing trends with their workforce, find root causes, and devise a solution that is well thought out. That is, you no longer need to guess the interventions that your team needs to take to tackle an issue. With the right data and data infrastructure in place, employee engagement analytics helps generate reports and detailed analyses for every team, geographical location, or business line. This allows HR functional leads, line managers, and heads of business to get visibility and updated information about the current state of their workforce. Information such as employee engagement score, engagement score of new hires, and percentage of the workforce that are engaged, etc. Since more companies are implementing HRIS (Human Resource Information System) and other people-related tools, HR has a tremendous opportunity to leverage these data sources to generate reports, charts, and actionable insights to bring more transparency about the state of their employee engagement. By connecting these data sources, you can identify trouble areas very quickly and judge if an intervention is needed. Use Cases for Employee Engagement Analytics While employee engagement analytics has many benefits, here are some specific questions that you can aim to answer with your data analytics initiative: Identify teams, groups, and managers with the highest engagement score Before engagement data is widely accessible, highly engaged teams are the same as others. They only get recognition from management after they achieve a major feat of accomplishment. This decreases the likelihood that a manager and his/her team can get the support they need to succeed. Management can rely on engagement data to track and monitor teams with higher-than-average engagement scores or a higher percentage of engaged employees. Additional budget, enablement, and incentives can be provided to help them become more productive and likely to retain. This is especially important for high performers. Track and benchmark employee engagement score A single data point only shows a snapshot of your workforce engagement at one point. Alternatively, a historical trend can show how to engage your business and its improvement rate over a given time period. Benchmarks allow leaders to evaluate where their organizations stand in comparison to others. Together, they give management a more comprehensive view of how engaged their workforce is. Measure the impact of employee engagement on business outcomes Another use case of employee engagement data is to link it with business outcomes. Most managers understand the importance of employee engagement but do not have any insights or reports on how improvements in this area can translate into financial results. This makes it hard to grab the boards' and executives’ attention. More than often, engagement scores are presented in a simple side-by-side comparison with other metrics to help conclude. While this type of analysis could be sufficient in some cases, employee engagement is just a piece of the workforce strategy puzzle that HR teams need to get right. The ability to analyze employee engagement data more holistically will help HR make smarter workforce management decisions. Top Employee Engagement Metrics In order to effectively manage employee engagement, teams need constant reporting and monitoring. You can set up key metrics in your reports to ensure that relevant data is being tracked. This allows you to identify issues early on and intervene quickly. Below are the top 6 employee engagement metrics every HR team should track regularly: Employee Engagement Score Employee engagement score measures the overall job or positions satisfaction of employees expressed as a score or percentage. Percentage of Engaged Employee This metric captures the total number of headcounts meeting the engaged employee requirements expressed as a percentage of the total workforce size. Satisfaction with Compensation This measurement captures employee satisfaction and commitment with respect to employee perception of compensation provided by the organization, meaning the employee's perception of compensation meeting their expectations. Satisfaction with Benefits This metric measures employee satisfaction and commitment with respect to employee perception of benefits provided by the organization, meaning the employee's perception of benefits meeting their expectations. New Hire Engagement Rate This metric measures new hire employee overall job or positions satisfaction expressed as a score or percentage. Net Promoter Score Net Promoter Score captures employee satisfaction and commitment both internally and externally to the organization expressed as a percentage or score and linked to employee engagement or similar survey results. The Journey to Employee Engagement Analytics Excellence The journey to recruiting analytics excellence has many stages. Each stage represents the companies’ ability to effectively translate data into insights and actions. Gartner broke down a typical analytics maturity journey into the four main stages: (1) Descriptive Analytics, (2) Diagnostic Analytics, (3) Predictive Analytics, and (4) Prescriptive Analytics. Descriptive Analytics examines historical data to evaluate existing employee engagement trends and highlights any potential worrying trends. For example, the data shows that the engagement rate for the product team has been consistently dropping in the past 6 months. Diagnostic Analytics helps teams conduct root cause analysis for employee engagement topics. Following up on the example in descriptive analytics, the question this company should try to answer is: “What are some potential causes for the failing employee engagement?” Predictive Analytics highlights the potential impacts and results that these worrying trends and risks are causing for the organization. This could take place in the form of employee turnover, cost, and performance. The predictive question this company needs to answer is: “How will the engagement issue impact the company’s ability to meet product development goals and, in turn, project revenue for the next quarters?” Prescriptive Analytics helps companies find the most optimal solution for known employee engagement issues and overall business objectives. Using the same example, companies should use prescriptive analytics to prescribe interventions that help turn employee engagement around. Implement Employee Engagement Analytics Being able to see how improvements in employee engagement scores translate into tangible benefits for the organization in the form of cost savings, ROI, or productivity improvements is cited as one of the top reasons why many companies fail at HR analytics. The key to unlocking these types of analyses is to integrate employee engagement data with other HR and non-HR data sources. For example, examining just engagement data allows users to track the number of engaged employees and average engagement score. Combining engagement with turnover and performance data allows you to measure the performance difference between engaged and not engaged employees. Make Employee Engagement Analytics Part of Your Workforce Strategy The performance and retention of your workforce are heavily dependent on the engagement level of your workforce. That is why it is critical for HR leaders to adopt a robust data-driven practice to help companies spot, engage, and encourage high performers. The traditional approach to HR analytics requires significant investments in tools and people. An out-of-the-box solution like SOLVE™ can help companies significantly cut down the time spent monthly on reporting, allowing recruiting teams to focus more on implementing prescribed interventions. Explore SOLVE™ Workforce Intelligence Solution today or see it in action.

Annual salary surveys are a powerful tool, but they always have a lag time. Salary benchmarks can change a lot, especially in a fast-moving talent market like the one we are currently in. This leaves a lot of opportunities on the table for better talent market data. Lucky for us, there is a solution to this. Since most recruiting activities are happening online, more data on talent demand, supply, and compensation are available than ever before. The best recruiting teams can incorporate this external data to inform their hiring strategies. For example, remote working and the proliferation of data make it possible for teams to use recruiting analytics to find talent arbitrage opportunities. Recruiting analytics has many usages and their capability is growing over time with talent market intelligence. Here is the definition for talent market data along with five use cases of how talent market intelligence can be utilized in recruiting analytics. Table of Contents What is Talent Market Intelligence? Use Case 1: View Hiring Trends by Job Position and Location Use Case 2: Compare Talent Supply vs Talent Demand by Job Position Use Case 3: Find Cities with the Most Abundant Supply for a Job Position Use Case 4: Compare Talent Supply and Demand Between Two Locations Use Case 5: View and Track Competitor's Hiring Activities Talent Market Intelligence in the Future What is Talent Market Intelligence? Talent market intelligence refers to the collection of external data on labor supply, demand, and salary benchmarks that teams can utilize to gain a competitive edge over their competitors. Below are the types of data that go into these datasets: Job posting data on career sites Job board data Skill data National and regional salary surveys Salary benchmarks Talent supply study Most solutions in this space focus on providing access to a diverse set of talent market data that users can extract, download, and use at their own discretion. Users would have to do all their own data aggregation, cleaning, and analyses. This is the ideal solution for companies with a large, dedicated data science team since it offers a wide range of data and deployment options. The other group of vendors integrates talent market data into their system and provides companies with access to a set of out-of-the-box analyses and reports. With this solution, users can significantly reduce the workload and time involved in the data preparation and analysis process. This type of solution is ideal for teams that are new to recruiting analytics and do not have the bandwidth to make this happen. Use Case 1: View Hiring Trends by Job Position and Location Having insights into hiring trends by job position and location allows recruiting teams to better allocate their time and effort in the market that would give them the best chance of success. Teams can use these data sources to respond quicker to the changes in the talent marketplace. Use Case 2: Compare Talent Supply vs Talent Demand by Job Position Being able to cross-compare talent supply and demand allows management to better adjust their workforce plan to address talent shortage issues. Use Case 3: Find Cities with the Most Abundant Supply for a Job Position Another high-value use case for talent market data is finding cities with the most supply and least demand for a specific job position. This is particularly useful when a company is creating hiring strategies for critical or hard-to-fill positions such as software engineer or registered nurse. Below is an example screenshot taken from SOLVE™️ Competitive Talent Intelligence. Use Case 4: Compare Talent Supply and Demand Between Two Locations When a company is looking to expand or relocate, Finance runs an extensive cost and benefit analysis that compares operational expenses, tax savings, and other financial costs to evaluate all of the options. However, talent supply, demand, and costs are often not included. This is major hindsight and happened due to the fact that teams did not have easy access to this type of data in the past. Use Case 5: View and Track Competitor’s Hiring Activities Talent market intelligence reveals strategic talent movements within companies. With this source of benchmark comes the ability to track when and where competitors are hiring or firing employees. This allows management to intervene quicker. Talent Market Intelligence in the Future Talent market intelligence is a remarkable data source that is often overlooked and not utilized to its maximum potential. This is because most recruiting teams do not have the technical knowledge and capability to bypass data integrity issues and incorporate analytics modeling for quick analyses. This has changed with the emergence of talent market data solutions like SOLVE™️ Competitive Talent Intelligence. If you are ready to utilize talent market intelligence in your talent strategies, talk to us or check out HCMI’s SOLVE™️ Competitive Talent Intelligence.

How can HR leaders persuade financial decision-makers to view the company’s workforce as appreciating capital assets, not cost liabilities? HCMI CEO Jeff Higgins collaborated with Paychex to share the key that brings HR and Finance together: data. Hear how HR leaders can present workforce data on hiring, retention, productivity, and more to showcase the value of human capital using the language of finance. And learn how presenting the business case value for HR goals can convince Finance to become HR’s biggest ally. Watch the video below to learn more:

Workforce planning is a strategic, forward-thinking process that requires commitment. It won't happen overnight and could take months to reap results. But the benefits are enormous, they include saving on labor costs and improvements in productivity through smarter talent management decisions. Workforce planning also plays a strategic role in enabling organizations to meet their operational and financial objectives. We put together this guide to showcase the benefits and use cases of workforce planning as well as the eight steps that you can take to create a positive impact in your organization. If you’re new to this space, you’d want to read our article on the basics of workforce planning and check out our comprehensive online course. Table of Contents The Strategic Way of Workforce Planning Traditional vs. Modern Workforce Planning Workforce Planning Use Cases 8 Steps to Workforce Planning Success Learn to Build a Winning Workforce Plan The Strategic Way of Workforce Planning Workforce planning is the process of aligning human capital needs with the overall business strategy to meet the organization’s objectives. Before you begin working on your workforce plan, be sure that you know the business strategy and the workforce questions that your executives are asking. This will also help guide your team on crafting your future vision state for your workforce plan. Skipping this step had led to the failure of many organizations. In a nutshell, the workforce planning process starts with having a good understanding of what staff to hire and how many you will need in a year or two years from now—in addition to today’s and forecasted needs. You can do this by surveying line managers and using a staffing model that helps you understand what talent is needed for today and the future and how many employees are currently in your workforce. Next, model your talent demand and supply and use the results of this analysis to calculate the gap in your workforce. Last, your team will need to create an action plan with specific workforce interventions for the next 2 to 5 years. Traditional vs. Modern Workforce Planning Additionally, your team will also have to decide on the depth and level of detail of your workforce plan - traditional vs modern. Traditional approaches rely heavily on headcount and succession planning. Over time, it looks at supply vs. demand for various job types to determine whether you have enough staff or need additional employees. Modern workforce planning is more strategic and comprehensive, focusing on the skills gaps in addition to headcount gaps. It looks at both quantitative and qualitative data and other factors that may affect the future. Things like technology advancements, changes to business models, or growth plans. In other words, modern strategic workforce planning focuses on creating an environment where employers get the talent required for their business strategy and employees want to stay with their company for years to come. Traditional methods for workforce planning are prone to over budgeting and under budgeting while demanding significant expenditures in recruiting and training personnel. Companies may save hours by utilizing a revolutionary tool like SOLVE™, allowing HR professionals to quickly create workforce scenarios, make projections, and compare various scenarios to find the most optimal plan for their business goals. Workforce Planning Use Cases Besides filling headcount gaps, there are many use cases for workforce planning, including: 1. Optimize Workforce Mix, Cost, and Performance The most important use case for workforce planning is optimizing your current staff mix and size for maximum performance. With companies spending nearly 70% of their operating expenses on their workforce, executives are keen on finding ways to control labor costs while improving the overall workforce productivity. Effective workforce planning allows organizations to forecast when and where they should add more staff for the most optimal results. Advanced organizations are also looking into which skill sets their team needs and how turnover and recruitment could affect them. For example, due to the recent shift in artificial intelligence and automation, digitalization has been identified as the top priority for many companies. Using data and analytics, HR can better understand the turnover of their IT staff by looking at the current distribution of staff across different job types, departments, and business lines throughout their organization. If there is a high turnover rate and cost in certain departments or among specific positions, you may need to hire additional employees to ensure the success of your digitalization initiative. The bottom line is workforce planning can help organizations increase performance, reduce costs, and align their workforce strategy with organizational objectives. 2. Stay Ahead of Labor Market Changes Workforce planning also enables HR to anticipate how changes in the labor market will impact their labor budget or Total Cost of Workforce. In the last decades, the labor market witnessed major shifts in talent demand and supply due to ageing workforce and the emergence of automation and artificial intelligence. COVID-19 has further accelerated these labor market trends forcing organizations to radically change how they recruit, manage, and retain talents. Instead of waiting for the job market to recover, HR teams need to think about how to adapt to this new environment. What-if scenario modeling allows HR to forecast how changes in individual elements like wages, talent availability, or turnover rate impact the overall workforce cost and gaps. This means you will be able to stay ahead of changing labor market, making it less likely that your team overbudgets or underbudgets. By having a comprehensive understanding of how many employees it takes for your business to run efficiently—and where they are needed most—you're allowing yourself to adjust as needed. 3. Strategic Talent Arbitrage In his best-selling book "Moneyball: The Art of Winning an Unfair Game," Michael Lewis talked about the Oakland Athletics Major League Baseball team. The A's were able to find undervalued players, giving them an opportunity for success at a lower cost than their competitors. Extensive use of data and analytics is a crucial element in making this strategy a reality. The same is also true with workforce planning—you can leverage data to enrich your understanding of market changes and future trends and make strategic talent moves that will benefit your organization. You'll have the ability to hire the right talent in right place and at the right place. This is even more relevant with the ongoing trends in employee turnover, reskilling, and talent shortage. This use case also manifests in the form of the buying vs. building vs. borrowing talents question. Buying talents refers to the practice of hiring experienced talent from the market while building talents focus on bringing in more junior employees and training them to fill your talent needs. The use of outsourcing and temporary employees is also known as borrowing talents. Each strategy has its own pros and cons and should be used strategically to meet organizations’ complex talent demands. 8 Steps to Workforce Planning Success Use these steps as a guide when beginning your workforce planning process: Step 1: Workforce Questions Many seasoned HR analytics practitioners pointed out that the ability to answer the questions that are relevant for executives is critical to workforce analytics and planning success. To boost your understanding of workforce planning and give you a better idea of what your organization lacks, we have compiled a list of the top 25 most important human capital questions that all HR leaders should be asking. Answering those questions is imperative to the success of your workforce planning process. Below are some of the most frequently asked workforce planning questions: Where will our company be in three to five years, and what does that mean for the type of people we will need to recruit? Can we model our workforce to optimize cost, profit, and productivity? What percent of our workforce is customer-facing or revenue-generating and where are they typically located? Step 2: Scenario Design and Future Vision State Here's where you start laying out the groundwork for your workforce planning process. You'll want to assess both quantitative and qualitative data related to how employees are utilized as well as what future projections might look like—especially in terms of market trends, technology changes or other factors that could affect company operations and business models over time. Make sure to include a "future vision state" for your organization to have a clear idea of what the future looks like and how it will impact workforce planning. Step 3: Demand Forecast Macro (Top-down Planning) This step involves looking at the market demand for your products or services, as well as how external factors such as the economy and political landscapes will impact future demands. This is important because it allows you to take a big-picture view of potential changes that may affect company growth so you can plan accordingly concerning hiring patterns in different regions over time. Step 4: Demand Forecast Micro (Bottom-up Planning) Here, you'll want to look at how each of your business units, departments, and teams are doing. For example, if one department is projected for growth while another isn't—or needs more employees than the other does—this will significantly affect workforce planning efforts and when (and where) these employees need to be hired. Step 5: Internal Supply Modeling This step involves looking at your internal supply. (i.e., the number of employees you currently have in each region across all business units and teams). This data will help with forecasting as well as identifying any gaps that may exist between actual need vs. what's being supplied internally or externally to meet the demand for specific roles and skillsets. Step 6: External Supply Modeling This is the process of looking at the current labor market to determine what talent is available. This includes identifying potential sources for hires and where your organization may need to increase its external recruiting efforts to meet demand over time. Step 7: Demand and Supply Gap Analysis At this stage, you'll have all the information necessary to determine whether there are any gaps between supply and demand. This will help make changes in your hiring strategies, training plans, and overall talent management efforts moving forward. Step 8: Workforce Action Plan Lastly, you'll want to develop a clear action plan that outlines the steps needed to fill any current gaps and meet future workforce demands. This includes identifying your organization's talent supply chain, which is essentially how you source employees—whether it be through internal promotions or external recruitment efforts. You should also identify potential training plans and assess what sort of changes you can make to company culture to retain more employees. Learn to Build a Winning Workforce Plan Workforce planning is a comprehensive, strategic approach that allows HR leaders and business managers to meet their organization's future goals by thinking several steps ahead of the game. This way, your workforce will be prepared for whatever comes next—whether it's new products or services on the horizon or the increased demand for other items in your industry. The Human Capital Management Institute (HCMI) has created a self-paced online course for those interested in learning how to build a winning workforce without breaking the bank. You don't need to come from an analytics or data science background to complete this course—just a desire to learn more about workforce planning and where the future is headed.

In today’s human capital-intensive economy, employee engagement can be considered an indicator of management success. Furthermore, employee engagement is also highly correlated with profitability as highly engaged employees tend to be more productive, retain longer, and are more willing to go beyond their job to add value to the organizations in which they work. Employee engagement metrics play an important role because they give Human Resources (HR) teams the ability to spot issues early on as well as the time and insights to react before they impact business performance. Before you decide on the specific employee engagement metrics you want to add to your report, you have to determine which ones are important and relevant to your company. Here are the six most common (and most important) employee engagement Key Performance Indicators (KPIs) picked from our online library of over 620 HR metrics. Definitions, formulas, and examples of how to use these metrics are also included to help illustrate their potential. Table of Contents How Workforce Analytics Can Help Improve Employee Engagement #1: Satisfaction Score with Compensation vs. Market #2: Employee Net Promoter Score or Rate #3: New Hire Engagement Rate #4: Employee Satisfaction with Leadership #5: Retention Probability Score #6: Recruiting Process Satisfaction How Workforce Analytics Can Help Improve Employee Engagement Until recently, most talent management decisions were mostly based on general observations and surveys. While this method could work in some situations, it is not an effective way to manage the workforce. Management also doesn’t have a way to measure the impact of employee engagement on business performance. With the help of workforce analytics, employee engagement rates can now be measured and tracked in real-time. The best teams can also combine engagement data with other sources of data to evaluate the performance of employee programs, discover trends, and prescribe interventions with confidence. Modern workforce analytics solutions like SOLVE™ streamline the complex process of turning raw engagement data into automated reports and ad hoc analyses that are ready for consumption. Furthermore, pre-built analytics modules can help HR teams shorten their analytics journey and make an impact on business results. The benefits of using analytics in employee engagement are numerous, but below are some of the most tangible ones: Tracking and trending employee engagement score Find out if there is a linkage between other talent management areas with the employee engagement rate Discover what HR elements drive employee engagement rate Measure the impact of a highly engaged workforce on business results and performance Discover who’s more likely to be an engaged employee and why #1 Satisfaction Score with Compensation vs. Market What is Satisfaction Score with Compensation vs. Market? Satisfaction Score with Compensation vs. Market measures the average employee satisfaction with their compensation compared to the current market rate. This score is important because it has a direct link to employee turnover and retention rate. A higher satisfaction score means it is less likely that an employee would leave because they receive a better offer elsewhere. On the other hand, a persistent low score could increase the chance that an employee will leave for another job. Definition: Measure of employee satisfaction with compensation compared to labor market compensation opportunities outside the organization. How to Measure and Track Satisfaction Score with Compensation vs. Market You can get this satisfaction score by surveying employees directly. Often, HR teams use rating scales questions to gauge how satisfied their employees are with their compensation package. These questions are usually included along with others in the company’s quarterly or annual engagement surveys or as part of a separate survey. Additionally, HR teams can get additional insights on the compensation gap by calculating the actual differences between offered salary and labor market opportunities by purchasing salary benchmark data. Formula: Satisfaction Score with Compensation vs. Market = Employee survey respondents satisfied with leadership / total survey respondents How to Optimize Satisfaction Score with Compensation vs. Market Below are a few options on what you can do to improve Satisfaction Score with Compensation vs. Market: A reasonable gap between your compensation vs. market – Companies that don’t always match the market rate to retain talent do not mean employees will leave. There are several other factors that influence employee retention rate including but not limited to working conditions, training, lateral mobility (transfers), and career path opportunities for promotion. Have a clear compensation strategy - HR can optimize their labor cost and productivity by choosing to pay above market rate for critical and core job roles while paying a little less than the market rate for non-critical and non-core positions. Develop a clear career path for employees - Employees appreciate when they see a clear path for salary increase and/or promotion as well as cross-training via transfers and lateral mobility. This could help drive up the retention rate. #2 Employee Net Promoter Score or Rate What is Employee Net Promoter Score? Employee Net Promoter Score is an indication of how likely your employees will recommend their workplace to their friends and family. This metric is important because it’s an excellent predictive indicator for the number of referrals your company will get and possibly the quality of cultural fit that the organization can expect. Our case study showed that referrals are much more likely to be high performers, cost less to recruit, and are much more likely to stay. Here is a real case study on using Employee Net Promoter Score to measure the impact of employee engagement on business results. Definition: Measure of employee satisfaction and commitment both internally and externally to the organization, expressed as a percentage or score and linked to employee engagement or similar survey results. How to Measure Employee Net Promoter Score Employee Net Promoter Score can be measured by asking employees how likely they’d be to recommend their employer to their family and friends. We recommend using a 0-10 rating scale to make it easier to calculate the final score. Only those who score nine or ten would be considered a promoter. Formula: Employee Net Promoter Score or Rate = Total employees scored at 90th percentile or higher / total survey respondents. How to Improve Net Promoter Score Provide hybrid work arrangement – 94% of surveyed employees say they would benefit from work flexibility. Being able to offer such an arrangement as an option will make it more likely that an employee will refer their workplace to their network. Start a referral bonus program – When done right, a referral bonus program can help boost the number of referrals significantly. Improve employee satisfaction and engagement – A highly engaged and satisfied employee is much more likely to refer their workplace to their network. #3 New Hire Engagement Rate What is New Hire Engagement Rate? New Hire Engagement Rate tracks the average employee sentiment of all new hires. On average, up to 20% of all new hires end up leaving the organization within the first 45 days. This represents a significant loss in both time and investment, making it a priority for HR to closely monitor the engagement level of their new hires. Definition: Measure of new hire employee overall job or positions satisfaction expressed as a score or percentage. How to Calculate New Hire Engagement Rate New Hire Engagement Rate can be calculated by averaging the engagement score of individual new hires. This score is usually collected through new hire surveys that are distributed within their first 30, 60, or 90 days. Formula: New Hire Engagement Rate = Employee survey results for either individual questions or aggregate results (New Hire Engagement Rating) / total survey respondents. How to Improve New Hire Engagement Rate Customize onboarding programs for remote, hybrid, and in-person settings – Ensure that the onboard programs are optimized for maximum engagement and time-to-fill productivity. Foster communication – While 89% of people believe that effective communication is extremely important, only 17% of people believe their own business' communication is excellent. Companies need to go above and beyond to foster communications between team members and departments. Find employees who are a better cultural fit for the job and your company – Improvements in quality and fit of new hires, even with some tradeoff in time-to-fill, can pay off significantly in overall retention rate and recruiting costs. #4 Employee Satisfaction with Leadership What is Employee Satisfaction with Leadership? Satisfaction with Leadership (also known as leadership trust) measures the employee satisfaction or trust in leadership or management, based on employee engagement or similar surveys and expressed as a score or percentage. It is not uncommon for employees to have significantly different responses depending upon whether the definition of leadership is overall leadership or whether it is their direct manager(s). Employees who believe in and score their leadership or management highly in engagement and related surveys are more likely to be highly engaged overall, to stay (retain) longer with the company, and to willingly give the additional discretionary effort that goes above and outside of the stated job requirements. Companies of all sizes will tell you that finding quality talent that is highly engaged is critical to their business operations, productivity, customer satisfaction, and more. The average cost per hire for each recruit is $4,425 while the cost for each executive position is nearly $15,000. For these reasons, companies need to pay close attention to employee satisfaction with leadership at all levels and in all areas of the organization. Definition: Measure of employee satisfaction with leadership or management, based on employee engagement or similar surveys and expressed as a score or percentage. How to Measure Employee Satisfaction with Leadership Satisfaction with Leadership is best used or optimized as a leading or predictive indicator in combination with metrics such as engagement, retention, and performance. This helps organizations identify managers that develop and retain talent across the organization. Formula: Employee Satisfaction with Leadership = Employee survey respondents satisfied with leadership / total survey respondents. How to Improve Employee Satisfaction with Leadership: Below are a few options on what you can do to improve Employee Satisfaction with a Leadership score: Optimize recruiting pipeline to find talent with the better fit – Talent with better fit will be much more likely to stay engaged and satisfied. Segment the workforce – When measurement dimensions such as workforce category, critical job groups, business unit, tenure, and performance category are added, satisfaction with leadership can be used to identify best practices and key areas for improvement at the organization. Measure and monitor manager span of control and organizational layers – Managers who are over-stretched and are not able to closely work with and monitor their direct reports have higher rates of turnover, lower overall employee engagement, and lower trust in leadership. #5 Retention Probability Score What is Retention Probability Score? Retention Probability Score measures the probability of the company retaining the employees. HR professionals can drill down this score or combine it with other metrics to enhance the accuracy and predictability of the retention probability score. For instance, filtering Retention Probability Score by business line, geographical location, or supervisor ID can help reveal valuable information that can be used to further improve the talent management process of such location and supervisor. HR can also combine this score with leadership quality metrics to show the impact of managers on employee retention. Definition: Measure of employee satisfaction and commitment expressed as a retention probability score in the form of a percentage and linked to employee engagement or similar survey results. How to Calculate Retention Probability Score Retention Probability Score is the average retention probability calculated from the results of employee engagement surveys. There are several ways a company can calculate its employee retention probability. The most basic method is to rely on supervisor survey results. This is simple to carry out, but the results heavily depend on individual managers’ observation skills. Advanced companies use statistics to find patterns in data, identify factors that influence retention decisions, and use them to forecast retention scores. Recently, more vendors are using machine learning and Artificial Intelligence to help identify employees with high flight risk and provide a probability score for each employee. Formula: Retention Probability Score = employee engagement survey retention probability / total survey respondents How to Improve Retention Probability Score Start a high-impact mentorship program – Make sure that new employees are receiving the right training and coaching to give them the best chance of success. Attract and retain the right talent – Talents with the right fit tend to stay longer, are less likely to leave, and are more likely to become high performers. Provide ongoing training and clear paths to advancement – New employees appreciate when the companies show that they are willing to invest in their employees. #6 Recruiting Process Satisfaction What is Recruiting Process Satisfaction? Recruiting Process Satisfaction measures how satisfied hiring managers are with the overall recruiting process. In most cases, hiring managers are the ones standing to gain or lose the most from a new hire. This makes hiring managers the main clients of the recruiting team. Tracking their satisfaction score with the recruiting process can help show the effectiveness and efficiency of the recruiting team at finding the right talent. Definition: A measure or survey score representing the overall satisfaction of hiring managers or supervisors with the new hire recruiting process. The measure may be expressed as a score or percentage. How to Measure Supervisor New Hire Satisfaction Rating Supervisor New Hire Satisfaction Rating can be found in the supervisor’s new hire survey results. Formula: Recruiting Process Satisfaction = Supervisor new hire survey results, either for individual questions or aggregate index (New Hire Satisfaction Rating) / total survey respondents How to Improve Supervisor New Hire Satisfaction Rating Below are a few options on what you can do to improve Supervisor New Hire Satisfaction Rating: Promote leadership development programs – Make it a requirement that new managers have to take a leadership development course. Leadership coaching – Leadership is a skill and can’t be learned overnight. Make sure that your team has a long-term strategy in training your managers’ leadership skills. Optimize onboarding program – Create a custom onboarding process for managers and supervisors to help them get ready for the new job. Make Employee Engagement Metrics part of Your Talent Management Process The performance of your workforce is heavily dependent on your employee engagement. That’s why HR executives must create a robust data-driven practice to help companies closely monitor engagement levels and intervene when appropriate. The traditional approach to HR analytics requires significant investments in tools and people. An out-of-the-box solution like SOLVE™ can help companies provide employee engagement reports and easy-to-use analytics tools directly on the hand of the manager. Explore SOLVE™ Workforce Intelligence Solution today or see it in action. To Learn More Want to know more about our Recruiting Analytics framework and benchmarks? Click on the button below to submit a contact form and we will get back to you shortly.

Early in May, the Workforce Investment Disclosure Act was introduced in Congress. Also referred to as Human Capital Management Disclosure, it will require public companies to disclose information about their workforce management policies. If the act is passed, these companies will need to include specific HR metrics in their public filing. What does this mean for your business? Many claim this act will be a game-changer and finally make companies to walk-the-talk when it comes to touting “people are our most important asset.” To help cut through all the noise, the team at Geeks, Geezers & Googlization show reached out to Jeff Higgins, Founder, and CEO of Human Capital Management Institute (HCMI). Jeff advised Rep. Cindy Axne and Sen. Mark Warner on this legislation. Jeff will also explain what this trend has to do with the recent push for Diversity, Equity, and Inclusion (DE&I). Watch the below video to learn more: Additional resource: Webinar - Incorporating HR & ESG In Corporate Strategy

This article originally appeared on IHRIM's Workforce Solutions Review magazine. The Covid-19 pandemic brought major change and upheaval to work and personal lives. But another major change in 2020 and 2021 has been the increasing push to prioritize Diversity, Equity, and Inclusion (DEI) in the workplace. Diversity, Equity, and Inclusion (DEI) is certainly not a new concept in the world of business. For many, the racial justice protests in 2020 shined a bright light on existing racial and gender inequities in society and highlighted the need to improve transparency and drive change with respect to how DEI is addressed in society and work. A January 2021 study by JUST Capital JUST Capital corporate-racial-equity-tracker, found large companies getting the diversity message. JUST Capital’s Corporate Racial Equity Tracker, which gathers DEI data disclosed by the 100 largest employers in the Russell 1000, shows investors how companies are doing on their diversity, equity, and inclusion commitments. According to JUST Capital, “while only 45% of those 100 companies disclosed such data in 2019, that increased to 80% just two years later”. While only 45% of those 100 companies disclosed such data in 2019, that increased to 80% just two years later Diversity Matters Financially A 2018 white paper “Delivering through Diversity” by McKinsey and Co. as well as their 2015 study “Why diversity matters”, showed how much gender diversity matters in company performance, with gender-diverse companies performing 21% better than the national average. The study also found that ethnically and racially diverse companies had 43% higher profits. From a progress standpoint, the issues with diversity and equity are most obvious at senior levels in organizations. The higher one ascends in a company, the more precipitously diversity drops off, which in turn results in less pay equity and inclusion. Most companies would say that there are simply too few fully qualified diverse candidates for the most senior roles in their organization and industry overall. However, is that true or just an excuse? This is where analytics comes into play. Using analytics and publicly available data such as the Bureau of Labor Statistics and U.S. Census data from 2020, we can verify by geography and job type what the diversity level is by geo metro area and job type (U.S. Census has 100 job types and BLS nearly 900). Using U.S. Census data from 2020 a given job family in a particular geo-metro area can be tested and benchmarked to verify whether or not companies are stating the truth or simply doing a terrible job or recruiting/retaining diverse talent. For example; 2020 U.S. Census data for the working population at the support staff and operations level (lower level lower-skilled jobs), shows that racial demographics in the workplace most closely match U.S. demographics overall with the exception of Latinx individuals making up 10% of this workforce tier compared to 18.5% of the general population. Therefore, at lower levels of many organizations and industries, employment does closely match the U.S. overall. Then what is preventing greater levels of diversity at higher levels in organizations? As we move up in terms of skills and education in the U.S., the percentage of white staff increases steadily at each level of the corporate ladder, finally representing 85% of executives at topmost levels. At the executive level, racial inequity is particularly significant: though 13.4% of the total US population is Black, only 2% of executives are Black; 18.5% of the U.S. population is Latinx, but only 3% of executives are Latinx. This data illustrates the fact that DEI inequality is deeply embedded in the business world. This does not mean that greater balance in DEI is impossible to achieve. Rather DEI is a clear example of what is not well measured (or reported) is not well managed. Structural workforce DEI inequity cannot be rectified unless organizations are not only deliberate and committed but deeply analytical in identifying and removing structural roadblocks to greater diversity, equity, and inclusion. Diversity, Equity, and Inclusion is a clear example of what is not well measured (or reported) is not well managed According to a study titled “Goals and Targets for Diversity, Equity, and Inclusion” by Iris Bohnet & Siri Chilazi, published April 2020, in Harvard Business Review (HBR), there are some simple steps companies can take to achieve significant progress in reasonable timeframes: 1. Present diversity data in a way that is simple, salient, and comparable. All data are not created equal: To be actionable, and to impact behavior, data must be transformed into intelligence and insight in a clear concise “IF this, THEN that” simplistic logical flow. Most companies have all the right data more-or-less at their fingertips but lack insight into how best to organize the data and in usually blind as to the predictive drivers of continuing inequity obstacles across the organization. Transaction counts and other employee information sitting passively in an HR dataset will not solve anything and will only continue to highlight the past, not predict/change the future. Executives notoriously don’t like bad news and so when simple programmatic changes fail to show progress may actually stop the program and or report due to lack of quick fix progress. For example, every company trying to improve diversity has tried and often succeeded at recruiting more diverse hiring classes than ever before. And yet fast forward three to five years and the overall diversity, the rate has barely budged, turnover of diverse employees is well above overall rates and diversity levels in first-line managers/supervisors are essentially unchanged. What happened? Doing the hard work to analyze, identify key DEI drivers aka KPI’s and then present them in an easy-to-understand, dynamic, customizable scorecard/dashboard that highlights what works and what does not enables management and HR to ask better questions and ideally understand and model different possible futures using key DEI KPI driver metrics such as hiring, promotions, transfers, retention, engagement, and more, all of which is benchmarked to identify hotspots of ongoing success and failure. The data presentation must enable easy comparisons by job, geography, year, tenure, performance level to name just a few key dimensions (see Chart 1.0 and Chart 2.0 on pages 3 and 4). For example, in the HBR article by Bohnet & Chilazi, the London Organizing Committee of the 2012 Olympic and Paralympic Games (LOCOG) used the simple, clear transparent, comparable approach to embark on a rapid, 200,000-person hiring spree. It extended the collection and reporting of diversity data to its own organization, as well as contractors, consultants, seconders, and sub-contractors involved in the Games. All staff had access to a monthly topline snapshot of the organization’s diversity metrics across seven dimensions, including gender and gender identity, disability, ethnicity, and socioeconomic status, while senior leaders received detailed monthly reports broken down by department. The diversity data were presented alongside recruitment targets based on the relevant labor market. Each department was benchmarked, and each functional area ranked on its hiring record every month. This allowed the LOCOG team to identify patterns early and to intervene swiftly in the face of irregularities. Ultimately, the LOCOG organizers achieved or surpassed all diversity targets with 46% women, 40% ethnic minorities, and 9% people with disabilities in the Games workforce. 2. Leverage diversity data to empower the right people to act. Leveraging diversity data to empower decisions or actions is perennially easy to say but hard to do. What data is to be leveraged and how? What action is needed or should be taken. As stated in the Bohnet & Chilazi HBR article example of the LOCOG, the data was widely shared and any shortfalls versus goals were visible to all which made taking action not only easier but absolutely required for managing organizers to retain credibility. When everyone can see how an organization is doing and where it is clearly failing to improve, the argument for action is clear and compelling. Management does not want to be seen as failing or worse, failing to improve results. Historically, this may explain why public listed companies have held DEI data so confidentially and declined to disclose DEI metrics both inside the company and externally to investors and markets. Sharing such data proactively on the other hand, can create a greater sense of shared purpose and broad-based desire to improve across the board, exactly what many companies need. Leveraging diversity data to empower decisions or action is perennially easy to say but hard to do. Examples of DEI analytics include the use of predictive analytics modeling to trend and predict an organization’s future diversity and pay equity levels one, three, and even five years into the future based on a set of assumptions around hiring, terminations, promotions, and pay practices. The simplest way to build such a forecast is simply to trend existing DEI program intervention changes in of those same metrics in hiring, promoting, and paying the workforce to see how much diversity, equity, and inclusion metrics change over time. Chart 1.0 below shows an advanced analytic dashboard from an analytics solution for a retail organization with unique ‘store’ locations across the US. In this analysis, store locations are concentrated in the US South. The dashboard integrates data across more than 5 top dimensions (shown across dashboard top), segmenting recruiting candidates by ethnicity and recruiting status in charts and compares versus local geography ethnicity levels (see black line | shown for each ethnicity category). Such a dashboard can show HR and business leadership at a glance how they are doing in terms of recruiting greater levels of diverse candidates that effectively match the local community in which the store(s) operate, and if not, wherein the application recruitment process candidates or even new hires are dropping out. Chart 2.0 below clearly shows diversity recruiting effectiveness across several key southern US states with any selected state, region, or individual location’s diversity recruiting flow showing up in the top-right chart “Candidates vs. Benchmark by Ethnicity” so that managers and HR can see how they are doing at a glance by region and then drill down into state and individual location to find ‘best’ and ‘worst-performing locations. Best locations could then be rewarded and asked to share their best practices whereas worst location store managers might be paired with best store managers to learn how more tips and tricks for attracting, onboarding, and retaining diverse talent. Lastly, John Rice, a prominent DEI expert and founder of Management Leadership for Tomorrow, a nonprofit focused on systemic inequality and empowering the next generation of leaders notes in a two-part study “The Gap Between Minority Experience & White Perceptions of Racism at Work” that there are five important hallmarks of strong DEI policy: Recruitment and ongoing retention policies that focus on representation at every level Careful assessment of pay gaps based on data, and policy for rectifying gaps in earnings Commitment by top executives to creating an actively anti-racist workplace Company policies and business practices based on racial justice that is value-driven, and not simply virtue signaling Philanthropic contributions to causes rooted in racial equity and justice Despite all the challenges in the labor market today, DEI will play an increasingly important role for companies in coming years not only due to the recent increase in DEI disclosure transparency for public listed companies but also because of the business case showing that a more diverse workforce leads to higher human capital productivity and innovation. To become better, companies need an intuitive, holistic, and rigorous way to track DEI KPIs, make relevant reports transparent to managers, and spotlight issues for action and opportunities for improvement. Human Capital Analytics is the right tool at the right time to help struggling organizations manage the complexity and sensitivity of DEI data for insight, change, and a more diverse, equitable, inclusive workforce. About the Author Jeff Higgins is the founder and CEO of Human Capital Management Institute(HCMI), a predictive analytics, workforce planning software, and consulting company. HCMI features SOLVE predictive analytics, the only ISO30414 compliant human capital reporting software on the market today. Using ISO30414, SOLVE also meets US Securities and Exchange Commission(SEC) disclosure requirements. Mr. Higgins is an adjunct professor of HR & People Analytics at USD, founding member of the Workforce Intelligence Consortium, member of the ISO Technical Advisory Group (TAG) on human capital, US lead for #ISO30414 Human Capital Reporting Standard, board member Center for Talent Reporting (CTR) and editorial committee member IHRIM Workforce Solutions Review (WSR) magazine. Jeff and HCMI help companies turn workforce data into intelligence with over 600 standardized metrics, predictive and prescriptive solutions for companies of all sizes. With his unique experience as both a senior HR executive and former CFO, Jeff helps organizations gain insights and solve talent issues to unlock billions of dollars in workforce ROI. Mr. Higgins was EVP client services at Inform a workforce planning and analytics company, EVP of Workforce Planning at Countrywide Financial Corp., and senior HR leader driving workforce analytics and planning at The Irvine Company and OneWest Bank. Previously Mr. Higgins spent 15 years in finance and accounting roles of increasing responsibility for Johnson & Johnson, Baxter International, Colgate Palmolive, and Klune Industries, ultimately as a Controller, VP of Finance, and CFO. In September 2019, Mr. Higgins and HCMI were featured on a CFO magazine cover story on Human Capital Reporting “human-capitals-big-reveal”.

Human Resources (HR) professionals often find themselves frustrated as they try to keep pace with the rapid changes in their industries. To overcome that frustration, they must adopt a modern data-driven approach to workforce planning. In this article, we'll give an overview of the concept and benefits as well as outline a process for conducting workforce planning activities. These activities include identifying needs or gaps in your organization's current talent pool, establishing goals and priorities, and developing strategies to address those challenges. We'll also discuss ways that you can leverage workforce planning as a tool not only for HR but also for the entire organization. Furthermore, this article will explain how workforce planning is more than just a reactive exercise; it's an essential proactive strategy to help identify and address talent gaps before they create issues that impact productivity in other areas of your business. It will also show how our revolutionary data-driven tool can help simplify and speed up the workforce planning process for HR teams. Table of Contents What Exactly Is Workforce Planning? Workforce Planning vs. Employee Scheduling What Are the Benefits of Workforce Planning? Example Workforce Planning Use Cases What Are the Different Steps of Workforce Planning? Keys to Workforce Planning Successes What Exactly Is Workforce Planning? Workforce planning or staff planning is a systematic process for identifying and addressing headcount and skill gaps between existing human capital needs and the overall business strategy. The goal is to ensure the organization achieve the 5 R’s of talent management - having the right talent in the right roles, at the right time, right place, and at the right cost. 5 R’s - The Right talent, the Right roles, at the Right time, the Right place and at the Right cost Workforce planning is also about future-proofing your organization. In today’s rapidly changing business environment, it’s critical that HR is on the lookout for gaps in the workforce and mitigate them before they become a threat. Thanks to the proliferation of HR data systems, it's now a much more quantitative process than in the past. Today, modern data-driven workforce planning practices allow HR professionals to integrate HR with other data sources to accomplish the following: Workforce Planning vs. Employee Scheduling Management often gets workforce planning confused with employee scheduling. Employee scheduling focuses more on the process of creating and maintaining a staffing schedule while workforce planning examines the needs of the organization, its historical trends, growth, and long-term business strategy to create a comprehensive plan. For example, when a manufacturer plans on who needs which shift, this is employee scheduling. When this manufacturer estimates the number of employees and which skill set they need to open an extra line of production next year, this would be considered workforce planning. What Are the Benefits of Workforce Planning? The benefits of workforce planning are numerous, but below are the most tangible ones: Workforce planning helps HR identify gaps in skills and competencies, providing an opportunity for skill development programs or upskilling opportunities before there is a need Organizations with higher turnover rates can use workforce planning to reduce employee turnover Workforce planning can be used for succession planning (e.g., identifying potential replacements) or as a tool to plan development opportunities for current employees who are on the fast track but not ready for promotion yet Increase revenue by hiring qualified employees who are a good fit for your company culture Helps HR plan for attrition, which can be anticipated or unexpected but usually predictable Enable management to use the data-driven methodology to optimize labor size, cost, and productivity Example Workforce Planning Use Cases Example 1: Answer the Build vs. Buy vs. Borrow Question Workforce planning is a valuable tool to help you find the answer to whether or not it makes sense for your company to hire someone internally, contract an outside vendor, or outsource work. Talent concentration, labor costs, and quality of applicants are some of the considerations often used in this analysis. In other words, it helps you answer the question of build vs. buy vs. borrow talent. Below are the main differences between these options: Building talent means hiring employees with less experience, investing in training them, and promoting talent from within Buying talent involves hiring highly skilled and experienced employees from external sources Borrowing talent refers to the use of outsourcing vendors and temporary workers to fill talent gaps Suppose you are a firm with a strong product development team that has occasional needs for paid marketing. In this case, it might make more sense for you to contract with an outside vendor or outsource work rather than hiring an experienced full-time digital marketing manager. HR professionals who plan well will be more prepared when the time comes to execute workforce planning, such as during periods of rapid expansion or changeups that require new skill sets. They can have access to the skills they need at hand, be better prepared for when attrition occurs due to retirement, or even identify potential new revenue streams. Example 2: Optimize Labor Size, Cost, and Performance Workforce planning can help you understand your staffing needs and create a better workforce strategy that is well-aligned with your business objectives. The best teams combine payroll data with finance and operations data to maximize performance and output while minimizing labor costs and keeping the headcount in control. Doing so also allows them to measure the impact of human capital decisions on business results. Also, workforce productivity metrics like Total Cost of Workforce and Human Capital ROI Ratio are key business metrics that allow you to measure and compare the performance of different groups, departments, locations, or business units. Example 3: Align Workforce Strategy with Business Results When you're using workforce planning as a tool to align your strategy with business results, you'll be able to ensure that all the resources in your organization are being utilized efficiently and effectively. For example, suppose you have a business strategy based on aggressive growth. In that case, workforce planning can help you know what skills and competencies you need to address, what training resources are required, how many people will be needed, and where they should be placed in the organization or across multiple locations. A strategic workforce plan is also an excellent resource for leadership when it comes time to make decisions about your company's growth—such as if or when it makes sense to open new offices or business units—and can even be used as a benchmark for your organization's culture. What Are the Different Steps of Workforce Planning? A completed workforce plan involves several smaller analyses to help identify existing gaps in skills and/or headcounts and determine how to future-proof the organization. The modern data-driven workforce planning practice is a systematic process that contains eight critical steps. Step 1: Workforce Questions The first and arguably the most important part of the workforce planning process is to come up with the workforce questions that your team needs to address as a part of the new business strategy. This could also be burning talent management issues that your team need to address or mitigate. Step 2: Scenario Design and Future Vision State The goal is to identify specific pain issues needed to be addressed, establish the end goals, and come up with scenario(s) that describe your core workforce strategy. Step 3: Demand Forecast Macro (Top-down Planning) Demand forecast macro refers to the top-down approach to workforce planning where HR gets inputs from management interviews and focus groups on the additional human resources they would need. This step focuses on forecasting headcount, labor cost, productivity, financial goals, and other HR key performance indicators (i.e., span of control, tenure). Step 4: Demand Forecast Micro (Bottom-up Planning) Demand forecast micro concentrates on getting talent demand inputs at the department and business line level from line managers through surveys, focus groups, and other interview methods. This step also extends beyond the topics covered in top-down planning to include classification of critical roles, core vs. noncore job groups, and basic career pathing. Step 5: Internal Supply Modeling Internal supply modeling is supposed to quantify the internal movement of the workforce. This includes but is not limited to internal hiring activities, terminations, promotions, and transfers. The results of this analysis will enable HR teams to answer more complex questions like whether or not the organization should build vs. buy vs. borrow talent. Step 6: External Supply Modeling External supply modeling emphasizes measuring the future supply of critical and core talent roles by geography or market. Key questions to answer here include: Is there a talent supply constraint now or in the near future? Is it possible to get a better fit or better performing talent that costs less? Step 7: Demand and Supply Gap Analysis This step utilizes the results of the previous talent demand and supply analyses to identify any existing headcount and skills gaps. The best teams use the “what-if” scenario modeling technique to add a predictive aspect to this analysis. Our data-driven framework further helps users measure the impact of these scenarios on the organization’s financial performance. Step 8: Workforce Action Plan The last step in the workforce planning process involves using scenarios created previously to show the roadmap for talent to drive the business. HR professionals must emphasize the strategy via storytelling, data, and visualizations to manage necessary changes at the organization, business line, and department level. Keys to Workforce Planning Successes Workforce planning is a journey filled with many pitfalls that could potentially derail the entire initiative. To succeed at workforce planning, you'll need to achieve the following. 1. Answer Key Management Questions About Workforce Every organization may have different workforce planning questions, but the Human Capital Management Institute (HCMI) has compiled a list of the top 25 questions most often asked by HR and business leaders. Below are the most common questions handpicked by our experts: What are the organization’s strategic plan and business budget? Is there a strategically aligned workforce plan? What is our workforce strategy? What workforce is needed to meet immediate challenges and position us to achieve our future strategic vision and goals? What future scenario(s) have we anticipated? What playbook changes do we have for the scenario(s)? What size and cost of the workforce do we need vs. what can we afford? Do we need new skills, better talent, more talent, cheaper talent or ‘all of the above’? 2. Demonstrate How Workforce Planning Can Create Impact or ROI You must show how workforce planning can help your organization achieve its goals, which might include increasing profitability or productivity. Going back to the build, buy, or borrow example, HR professionals would need to demonstrate the Return on Investment (ROI) for each option and then assist management in deciding which one makes the most sense. 3. Automation to Scale Your Workforce Planning Traditionally, workforce planning required a team to gather and analyze data from various sources, including human capital metrics (such as attrition rates) or financial reports. But with the advent of data-driven workforce planning software, this is now easier to execute at both small- and large-scale levels for HR professionals. SOLVE™, for example, is a data-driven workforce planning software that allows users to create customized reports and graphs based on their unique needs. More specifically, it: gathers data and analyses for you, displaying insight through a single dashboard provides HR professionals with a window into the future with projections of skills, labor capacity, and workforce availability serves as a benchmark for your organization's culture, enabling you to measure and compare the performance of your workforce against more than 10,000 organizations worldwide answers virtually every question an HR professional might have about workforce planning, including HCMI's 25 most common ones mentioned earlier allows you to identify and prioritize workforce planning initiatives Make Data-Driven Workforce Planning part of Your Talent Management Process The traditional approach to workforce planning leaves a lot of room for error while requiring significant investments in tools and people. An out-of-the-box solution like SOLVE™ can help companies significantly cut down the time spent on finding the optimal workforce size and cost. This allows HR teams to focus more on implementing the chosen workforce action plan. Explore SOLVE™ Workforce Intelligence Solution today or see it in action.

Thanks to the proliferation of HR data across HRIS systems such as applicant tracking systems, companies have access to more recruiting data than ever before. This creates both challenges and opportunities for recruiting teams to use these newfound data sources to grow and nurture their talent pipeline. This is where recruitment analytics can help. Recruitment analytics allows companies to connect data from disparate sources and link recruiting strategies to business objectives. Before, most recruiting teams were flying blind trying to put butts in seats as quickly and cheaply as possible, disregarding the impact of recruitment activities on business results. More advanced teams can incorporate some analytics into their decision-making process, but it often stops at tracking and benchmarking key recruiting metrics for recruiting efficiency, not talent effectiveness such as quality of hire. We put together this guide to help companies adopt a more data-driven recruitment management process. It will explain in-depth what recruitment analytics is about, the potential impact, as well as the kind of recruiting questions it can help answer. We’ll also provide real-life examples as well as best practice tips to help you grab the concepts quicker. Table of Contents What Is Recruitment Analytics? What Kinds of Recruiting Questions Can Analytics Help Answer? Three Levels of Recruitment Analytics Integrating Recruiting Data with Other Data Sources for Maximum Impact Why Automating Recruitment Analytics? Top Recruiting Metrics What Is Recruitment Analytics? Recruitment analytics refers to the practice of data-driven decision-making by merging recruiting with other HR and non-HR data sources to identify drivers of workforce performance. Recruitment analytics is a subcategory of workforce analytics and standard modern practice in advanced recruiting and hiring management. Recruitment analytics can benefit all the stakeholders in the organization. For executives, this practice gives them an unprecedented level of insight into hiring performance and the ability to align recruitment strategies with overall business goals. For recruiting teams, this practice gives them much-needed tools to monitor the health of their talent pipeline, identify potential recruitment risks, and proactively avoid or alleviate them. For line managers, they can get quick access to insights that they can easily act upon and dashboards to track their progress and measure success. What Kinds of Recruiting Questions Can Analytics Help Answer? These are the 5 burning recruiting questions that analytics can help answer. 1. How efficient and effective is our recruiting process? A well-designed recruiting process can help bring in more qualified applicants and speed up the recruiting process while reducing the average cost per hire. This is why companies need to closely track the efficiency and effectiveness of their recruiting process. A good report or dashboard will give management a comprehensive snapshot of the current talent pipeline as well as its effectiveness. Below is an example dashboard that captures everything one needs to know about recruiting efficiency and effectiveness. 2. What recruiting source yields the highest performers? What recruiting source yields the best cultural fits? Several research and case studies have shown that employee referral and temp-to-hire are often the two best recruiting sources. However, is it true for your organization? What is better than having the data to prove this is also the case for your organization? That’s why recruiting teams need to have the ability to track and compare the performance of various hiring sources both at the company as well as the business line level. Below is an example of how you can quickly compare the performance of various hiring sources. 3. What is our quality of new hires? What recruiting source yields the best quality of new hires? Getting an empty position filled promptly is important. But it’s equally important to fill this position with a top talent that fits within the budget. Get this balance wrong and you could potentially see a sharp increase in the total cost of workforce and turnover rate in subsequent quarters. Below is an example of our Quality of Hire index historical trend and forecast. 4. Are we losing the right people (low performers) or the wrong people (high performers or critical roles/skills)? Recruiting and turnover are like two sides of the same coin. Hiring talent with the right cultural and skill fit will significantly increase the chance that a new hire will stay after the first 90 days. Another equally important aspect of turnover is to assess if the company is losing the right people or the wrong people. The right people in this case are unengaged employees with below-average performance scores. The wrong people are your superstars and high performers or highly engaged workers who are carrying their team. Below are our recommended charts for tracking high performer and highly engaged turnover rates. 5. Is internal mobility a source of value or turnover and cost? What percentage of the workforce moves internally each year? Compared to external hires, internal hires on average cost less, are more likely to stay, and also often stay longer. Being able to measure the cost-saving opportunities for internal hires can help recruiting teams cement necessary buy-in support for any future internal mobility promotion campaign. Below is an example of how we help companies measure the impact of internal mobility on turnover. Four Levels of Recruitment Analytics The journey to recruiting analytics excellence has many stages. Each stage represents the companies’ ability to effectively translate data into insights and actions. Gartner broke down a typical analytics maturity journey into the four main stages: (1) Descriptive Analytics, (2) Diagnostic Analytics, (3) Predictive Analytics, and (4) Prescriptive Analytics. Descriptive Analytics focuses on examining historical data to assess what has happened in the recruiting process and highlight any potential worrying trends. For example, the data shows that the number of applicants for cybersecurity roles has been falling. Example descriptive analyses: Trend reports Metric scorecards Historical trending Benchmarking Scatter plot Diagnostic Analytics concerns more about what caused these worrying recruiting trends to take place. Following up on the example in descriptive analytics, the question this company should try to answer is: “What are some potential causes for the falling number of applicants for cybersecurity roles?”. Example diagnostic analyses: Root cause analysis Monte-Carlo Pattern identification Ad-hoc analyses Predictive Analytics highlights the potential impacts and results that these worrying trends and risks are causing for the organization. The predictive question this company needs to answer is: “How will the falling number of applicants for cybersecurity roles impact the company’s continuity of operations?”. Example predictive analyses: Multivariate statistical modeling Trend forecasting Forecast predictive indicators (identified via root cause analysis) Prescriptive Analytics helps companies find the most optimal solution for known recruiting risks and overall business objectives. Using the same cybersecurity example, companies should use prescriptive analytics to prescribe interventions that can help increase the number of applicants for cybersecurity roles. Example prescriptive analyses: What-if analytics to test different recruiting scenarios via changes in recruiting metrics and strategies Workforce planning, scenario modeling Integrating Recruiting Data with Other Data Sources for Maximum Impact Being able to track advanced recruiting metrics like Time to Fill or Cost per Hire is good. But it’s even more valuable for management to see how improvements in these metrics can translate into tangible business results such as cost savings, ROI, or productivity improvements. This is cited as one of the top reasons why many companies fail at HR analytics. The key to unlocking these types of analyses is to integrate recruiting data with other HR and non-HR data sources. For example, examining just recruiting data allows users to track metrics like hiring rate, time to fill, and the number of applicants. Only when you combine recruiting with turnover, performance, and engagement data, you can measure the turnover rate of new hires or identify recruiting sources that yield the most high performers and highly engaged employees. We also published a detailed article and a video on this topic. The data recruitment analytics uses can come from both internal and external sources: Human Resource Information System (HRIS) Applicant Tracking System (ATS) Performance Management System (PMS) Enterprise Resource Planning (ERP) Finance System Learning Management System (LMS) Job Boards External Benchmarks Labor Supply Intelligence Why Automating Recruitment Analytics? For analytics teams who still manually process data, it is common to spend up to 2 weeks every month on data aggregation, cleansing, and integration. This team would comb through all the transactions to ensure that there are no anomalies in the data that can skew the results. After this was done, the team then starts working on generating reports and performing ad hoc analyses per stakeholder requests. The result is a process that is slow, expensive, and error-prone. Very little time was spent on explaining the insights or translating insights into best practices that are easy to act upon for management. This decreases the chance that a finding is implemented, and an ROI is realized. Report and analytics automation brings huge gains for team efficiency and ROI by automating much of the manual process, allowing recruiting teams to quickly implement and ramp up their value-add analytics capability. What was previously done in years, can now be accomplished in just a few months. Advanced teams can also benefit from a solution like this. It gives them more time and buy-in-support to perform more complex analyses and understand the drivers of their workforce performance or turnover. Top Recruitment Metrics Chances are your recruiting managers are swarmed with monthly reports. This makes it hard for them to find these reports useful and easy to act upon. That’s why it’s important for them to have a set of KPIs or top metrics on the recruiting process and efficiency. These KPIs allow executives to get an overview of how their recruiting team and process are performing at any given time. The top 7 recruitment metrics we recommend all companies to track are: Quality of Hire Internal Hire Rate Time to Fill Time to Start Net Hire Ratio Cost per Hire Internal vs External Hire Ratio Make Recruitment Analytics Part of Your Talent Management Process The performance of your workforce is heavily dependent on the quality of new hires. That’s why it’s critical for recruiting executives to create a robust data-driven practice to help companies hire qualified talent faster, cheaper, and more efficiently. The traditional approach to HR analytics requires significant investments in tools and people. An out-of-the-box solution like SOLVE™ can help companies significantly cut down the time spent monthly on reporting, allowing recruiting teams to focus more on implementing prescribed interventions. Explore SOLVE™ Workforce Intelligence Solution today or see it in action.

To win today’s talent war, recruiting teams must make the right adjustments to their recruitment strategies at the right time. This is why it’s more important than ever for recruiting teams to have clear visibility into the talent pipeline and recruitment process. Getting the necessary data and metrics in place is the most critical step to make this vision a reality. However, while there is no shortage of measurements, not all recruiting metrics are equally important and helpful. That is why we handpicked these top 6 recruiting metrics from our library of over 620 HR metrics to help HR executives better use data to improve their recruitment strategies: Internal Hire Rate Time to Fill Time to Start Net Hire Ratio Cost per Hire Internal vs External Hire Ratio Using Analytics to Improve Recruiting and Onboarding 1. Internal Hire Rate Internal Hire Rate refers to the number of positions filled internally via promotion, transfer, or other moves as a percentage of the total number of all new hires. A new hire is counted as an internal hire when the organization fills the open position with an existing employee. This can be both lateral and vertical movements of employees across the organization. Learn more at HCMI’s Beginner Guide to Internal Hire Rate. Internal Hire Rate = Total Internal Hires / Average Employee Headcount in the Period Example: If the Internal Hire Rate is 40%, it means that 40% of all new hires are filled internally. 2. Time to Fill Time to Fill measures the average total number of calendar days from the date a job requisition is posted to the date a new hire accepts the position. Recruiting executives can use this metric to quickly gauge the effectiveness and efficiency of their recruitment process. This metric can also be used as a reliable estimate on long it would take to fill an empty position. Learn more at HCMI’s Beginner Guide to Time to Fill. Time to Fill = (Sum of (Offer Acceptance Date - Position Vacancy Date)) / Total New Hires Example: If the Time to Fill is 14, it means that, on average, it takes the recruiting team 14 days to find, interview, and get a new hire to accept a position. 3. Time to Start Time to Start captures the average total number of calendar days from the date a job becomes vacant to the date a new hire starts work in the new position. Like Time to Fill, this metric can serve both as a KPI and an internal benchmark for the recruiting team. Learn more at HCMI’s Beginner Guide to Time to Start. Time to Start = (Sum of (Position Hire Date - Position Vacancy Date)) / Total New Hires Example: If the Time to Start is 35, it means that, on average, it takes the recruiting team 35 days to find, interview and get a new hire to start a new position. 4. Net Hire Ratio Net Hire Ratio compares the number of new hires and the number of terminations within the same period. The recruiting team can use this metric to measure the net headcount growth for a given period. Learn more at HCMI’s Beginner Guide to Net Hire Ratio. Net Hire Ratio = Total New Hires / Total Number of Terminations Example: If the Net Hire Ratio is 1.4, it means that the organization hired 1.4 new employees for every 1 turnover during the last period. 5. Cost per Hire Cost per Hire measures the total amount of dollars spent on recruiting new hires. They include the internal expenses of running a recruiting department and external expenses associated with hiring activities such as travel reimbursement, testing fees, external agency fees, etc. The majority of recruiting costs typically relate only to external hires, but some costs may be allocated to internal hires, depending upon recruiting activity analysis. For more details on what input should be included in Cost per Hire, check out HCMI’s Beginner Guide to Cost per Hire. Cost per Hire = Total Hiring Costs / Total New Hires Example: If the Cost per Hire is $3,500, it means that, on average, it costs the organization $3,500 to recruit a new hire. 6. Internal vs. External Hire Ratio Internal vs. External Hire Ratio compares the total number of internal hires versus the total number of external hires within a time period. Recruiting managers can use this metric to quickly gauge how many percentages of their new hires are from internal and external sources. Since internal hires are more likely to be high performers, highly engaged, and less likely to leave, it’s important that hiring managers keep a close eye on this metric. Internal vs. External Hire Ratio = Total Internal Hires / Total External Hires Example: if Internal vs. External Hire Ratio is 0.4, it means that there are 0.4 internal hires for every external hire. Benchmark Your Recruiting Metrics Without accurate benchmarks, it is difficult to know if a particular metric result is good or bad. Benchmarking recruiting metrics provides context and strategic insight, allowing for a better interpretation of your recruitment reports and performance. We compiled a comprehensive list of 60 recruitment benchmarks every HR team needs to know. These are benchmark data handpicked from around the web. If you’re looking for additional recruiting benchmarks, HCMI’s database contains benchmarks for over 500 HR metrics and covers all stages of the talent management lifecycle. This database can be filtered by various factors such as organization type, workforce size, industry, and diversity and inclusion factors. Why Many HR Analytics Initiatives Failed The inability to provide evidence-based answers to compelling workforce questions facing business leaders is often quoted as the main reason why many HR Analytics initiatives have failed in the past. Recruiting Analytics is no exception. Having worked with many HR teams on their analytics journeys, we found that for recruiting teams to be successful at making data-driven decisions, they need to be able to do the following: Link recruiting strategies to organizational performance KPIs Measure, track, and benchmark key recruiting metrics Show how recruiting decisions impact workforce performance Provide stakeholders with timely and easy-to-digest insights along with their potential impact/ROI Watch how our SOLVE™️ Workforce intelligence Software helped other HR teams achieve these and build a workforce decision hub. To Learn More Want to know more about our Recruiting Analytics framework and benchmarks? Contact us and we will get back to you shortly.