HR analytics and workforce modelling are two very important tools for HR professionals.
With so many overlapping HR tech solutions available, it can be hard to decide which investments are necessary and which create the most value for your business.
Knowing the difference between workforce modelling and HR analytics can help you identify gaps in your HR metrics. It also useful if you’re seeking approval for a workforce modelling business case.
But first let’s define them:
– HR analytics is the data-driven assessment of your current workforce relative to business outcomes
– Workforce modelling is the creation of scenarios to visualise skill gaps and future talent needs
So, what are the defining characteristics that make these HR tools important to businesses?
The main function of HR analytics is to provide a breakdown of your current organisational situation. This type of analysis gives you the ability to identify how many people you have employed right now, who are your strongest performers and what departments are the most effective. HR analytics provides a timely perspective, establishing a great platform for making strategic decisions. It’s imperative to have a clear understanding of the current state of your organisation to bring it into the future.
HR analytics provides a current situation breakdown. It can’t, however, provide insights into where the organisation needs to be in a month, year or five years. Workforce modelling uses factors such as current headcount, likely attrition rate and required skills sets to determine your future talent needs. Consider it succession planning for your organisation.
Setting up a workforce modelling initiative reduces the growing pains of an organisation as it expands. Skill gaps are preempted and new employees are hired before current employees get stretched too thin. Workforce modelling factors in elements such as turnover, talent shortages and skilled workers who entered the workforce 20 years ago that are more likely to retire in the coming years.
Workforce modelling allows you to avoid ‘brain drain‘ in your organisation by hiring talent to replace outgoing employees. You need to factor in what talent is leaving your organisation in the coming years, as well as the talent coming in.
Using the predictive power of workforce modelling eases major transformations such as a merger or a change in processes. Workforce modelling shows you who needs to be doing what, as well as additional factors involving training and data migration.
Being able to visualise such a significant change may make the task seem daunting, but workforce modelling has the opposite effect. Being able to predict what factors you need to include makes it a lot easier to design a clear plan to manage the change.
HR analytics is the best starting point to decide how to improve your organisation. Use a current snapshot of your organisation as a basis for your workforce modelling strategies.
Create an outline of how you would like your organisation to look in 5 years time. Compare this to where your organisation currently stands in terms of headcount and skills. List all the positions you would need to fill and the skills those positions require. Look at your current workforce and what stage in the employee lifecycle they are. Assess what positions will need to be replaced as older employees retire and you face general turnover.
Use workforce modelling and HR analytics together for a more organised workforce now and into the future
Workforce modelling is a great skill to have in your HR toolbox. It may sound like the replacement for HR analytics, but they work best as complementary tools.
To learn more about workforce modelling, please book in a 30 min discussion with Navigo’s General Manager and Australian HR Technology Survey Author, Andrew Rees.