Companies are doubling up their investment in analytics to address business issues. On the HR front, executives are using data to transform their organizations to make better strategic workforce decisions.
Analytics, with the right data, can help you answer a plethora of questions in a timely manner:
The challenge for many HR organizations considering analytics is where to start. It’s important to get to know your people better. Unfortunately, business leaders can be swayed by the excitement of newer technologies such as predictive analytics being discussed on the conference circuit without taking stock of what are the company’s immediate priorities.
There is a quicker way for HR to show its strategic value. It’s also often neglected: obtaining insight to better understand where money has been spent.
In most companies, labor costs account for more than 60% of corporate expenses. The question is where are you spending your budget? Are you generating the right return on investment by witnessing an increase in employee loyalty or productivity? If not, do you have detailed visibility of where you could reduce expenditure?
These and other questions can only be answered by analyzing your organization’s spending patterns especially in large purchasing categories including recruitment, training and development, and compensation and benefits.
Using analytics, “world-class” HR organizations spend 37% less than their peers and operate with 31% fewer staff - saving up to $17 million annually (for the typical company with $10 billion in revenue) - according to research from The Hackett Group.
In addition to helping you deliver savings, which just about every company is doing today as part of a strategic cost containment and management program, spend analytics is a great way to:
- Learn the real business value of data and how you can directly contribute to your company’s focus on improving business metrics such as reducing operating costs
- Identify savings which you could use to invest in strengthening your organization’s analytic capabilities in the future
- Use spend analytics to build the necessary skills and confidence in your team as you transform your organization
The beautiful thing about spend analytics is it’s usually managed by your colleagues in procurement. This means that you don’t need to worry about getting hold of the data for analysis because it already exists. All you have to do is knock on their door and ask for access to their analytics tool – if you haven’t already done so. Savings will quickly follow that contribute to improving your company’s profit margins.