Analyze this

Workforce, June, 2003 by Samuel Greengard

Companies are beginning to use sophisticated workforce analytics applications to gain insights into business processes in ways that were unimaginable just a few years ago. Whether it's where to locate a factory for the best labor pool or how a VP of sales should structure incentives, workforce analytics can help an enterprise sail beyond the flat earth of spreadsheets and simple reporting and discover a brave new world.

Geof Pejsa can see the future of human resources through the 18-inch flat-panel monitor placed on his desktop. Seated in his office at a large federal facility in the suburbs of Washington, D.C., the chief of the pay, processing, and systems branch for the U.S. Census Bureau is closely studying a map of the United States. He positions his hand on his computer mouse and moves the cursor to Texas. Instantly, a bubble pops up on his monitor showing minimum, maximum, and average salaries for the 272 bureau employees working in the Lone Star State.

"This is data that used to take days or weeks to assemble," says the affable 40-year-old public servant. Another click of the mouse and he's drilling down into the data by county and then by job position. Seconds later, he's able to slice through the data to view individual workers. "We're able to determine how pay scales vary in different states and uncover patterns that influence them, such as education, training, gender, and race. This is like lining up a Rubik's Cube."

The high-tech operation could never be mistaken for grandpa's federal government. The Census Bureau--along with a growing number of companies such as Interwoven, Royal Caribbean Cruises, Merck, and Northrop Grumman Information Technology--is turning to sophisticated workforce analytics applications to mine data and gain insight into business processes and labor conditions. These applications can spot hidden patterns and problems and help an organization make more effective business decisions surrounding programs, policies, and pay Yet, while workforce analytics uses data-mining and reporting tools that weren't available just a few years ago, the system isn't problem free. Unless an organization taps into the tight data and ensures that it is accurate-and then puts the data into action--workforce analytics can become a trip down the rabbit hole. Ron Hanscome, senior program director at META Group in Plymouth, Minnesota, is one who can see the distinct advantages. "It turns the intangible into tangible," he say s. META reports that about 60 percent of Global 2000 companies will use some form of workforce analytics by the end of 2003, mostly to improve decision-making on compensation, recruiting, retention, and performance issues. David Ulrich, a business professor at the University of Michigan, says that the technology is bringing healthy change. "Organizations are beginning to recognize that the softer side of the business can be measured and that it's a key factor in achieving success," he says. Betty Silver, human capital strategist at SAS Institute Inc. in Cary, North Carolina, adds, "Workforce analytics allows organizations to examine a multitude of interrelated factors. It can drill into places that previously couldn't be reached."

Although workforce analytics is rooted in human resources, the ability to deliver detailed information about workforce issues and trends--ranging from where to locate a factory for the best labor pool to how a VP of sales should build incentives-has real applications throughout the organization. Done properly, workforce analytics can help an enterprise sail beyond the flat earth of spreadsheets and simple reporting and discover a brave new world.

Counting on analytics

Step inside Federal Office Building Number 3 in the Washington, D.C., suburb of Suitland, Maryland, and you will find yourself wandering through a mind-numbing labyrinth of corridors and hallways. Hundreds of offices, stretching almost as far as the eye can see, provide an apt metaphor for the level of complexity that confronts a person trying to navigate today's data infrastructure. Without a map and an address for finding a particular person or office, all the brainpower ensconced in this massive building is out of reach and virtually useless.

Seated at a simulated wood grain desk in room 3254, Pejsa is explaining the how and why of workforce analytics. In sharp contrast to the world of technology he lives and breathes, he surrounds himself with an array of personal items. There are Beavis and Butthead figurines, framed cloth patches from various space missions, and a Sopranos poster. At this moment, he is reflecting on how the behemoth agency is migrating into the digital age. Having spent his entire working life at the organization--he joined the Census Bureau in 1985 after graduating from Virginia Tech with a degree in business management--he certainly has a sense of perspective. "By putting data into the hands of managers, we're allowing decision-making to take place on the front lines of the organization rather than in the executive offices."