Increasing profits and saving money with Human Capital Analytics

In one of the ironies of the Internet age, instead of reducing companies’ dependence on people, modern technology has validated the irreplaceable need for human talent. More than ever before, experts say, an organisation’s real value resides in the willingness and ability of its people to share their collective experience, intelligence and skills. With employee costs now often exceeding 40% of corporate expenses, this new fact carries significant implications for HR professionals.

To this point, technology initiatives in the HR area have largely focused on the automation of traditional clerical tasks such as payroll and administration. While these systems have delivered significant measurable value larger challenges remain. As companies undertake the evolution from automating HR to managing their human capital, HR professionals face a more strategic set of requirements. Companies require a clearer picture of how human capital management initiatives add value to their organisation in order to accelerate those that contribute the most profitability as well as saving money.

Human capital begins with filling jobs with workers, but goes far beyond this simple action. Most companies view their employees as production units that they hope will perform their job adequately, for as little money as is possible, effectively saving money while optimising profits. To quantify value from “human assets” requires human capital analytics, an entirely new class of systems that aggregate not only just HR but company wide data and supports quick, fact based decisions backed by accurate information.

There are several advantages to human capital analytics including helping to identify essential insights that allow companies to proactively apply strategic human capital initiatives to help meet corporate objectives such as indentifying trends within the workforce and indentifying changes before they happen. These human capital initiatives can also help identify key talent among the workforce for leadership development as well as quantifying the impact of HR processes and providing information on how cost effective the organisation is.

When properly aggregated in unified formats, human capital analytics data becomes information that can provide valuable insights. Users can easily view the information from several different perspectives as their companies’ business needs change or as the underlying information changes. In addition, there is no need to search multiple systems and databases and laboriously join it all in one place. The task is already complete, saving time, resources and money.

Human capital analytics is an effective addition to any organisation’s human capital management allowing HR professionals to think strategically rather than reactively, helping to save money while increasing profits.

Daniel Collins writes on a number of topics on behalf of a digital marketing agency and a variety of clients. As such, this article is to be considered a professional piece with business interests in mind.