Good talent is in short supply. As noted by the Society for Human Resource Management, two-thirds of organizations will hire some freelance workers to make up the difference, while one-third of organizations say they're prepared to hire out 30 percent of their workforce.
The result? Workforce planning technology is now in high demand. How do firms make effective HR decisions that encourage employee retention — and how do finance leaders measure the impact of hiring and retaining new staff? Here's a look at technology investments that can produce measurable HR impact.
Crunching the Numbers
Many organizations don't realize it, but their hiring and talent retention strategies are decades old. They stem from a time of economic crisis when unemployment rates were high and jobs — rather than skilled staff — were in short supply. Recent bubble bursts and resource-based pricing slides brought back similar conditions, but an uptick in world markets combined with growing freelance numbers has created a role reversal.
According to Strategic Drift: How HR Plans for Change, a study conducted by The Economist Intelligence Unit (EIU) and supported by the ADP Research Institute®, 76 percent of organizations say the market for skilled talent will become tighter. It's no surprise, then, that HR leaders are spending on analytics expertise and technology to make the best use of available data and discover the ideal route to hire new talent.
For finance leaders, meanwhile, the increasing reliance on big data offers the chance for improved workforce planning — predictive models provide the ability to assess the cost of new employees upfront. Given their skill set, work history and salary potential, is it worth spending on FTEs or choosing the freelancer route? Analysis of hard data provides solid decision-making ground.
Changing the Game
As noted by the study, job-hopping is on the rise. Skilled employees are no longer willing to "stick it out" with organizations that can't provide both "hard" benefits such as competitive salary and "soft" benefits such as better corporate culture and improved training. According to the ADP Research Institute® Workforce Vitality Report, people who switched jobs in the fourth quarter of 2016 experienced 5.1 percent wage growth compared to a 4.3 percent wage growth for job holders.
What's more, staff aren't looking to do the same job forever: They want a way to move up in the organization and have their contributions recognized. HCM tools can help finance leaders assess the cost-vs-benefits of changing the corporate game to meet the needs of all-star staff players. What's the upfront financial burden of retooling corporate culture and offering more training, time off flexibility or health plan improvements? Are these costs recouped over time by having the same staff move laterally and vertically in the organization, or are firms better served to ignore job-hopping and instead focus on hiring new talent?
Designing Long-Term Strategy
Organizations disagree on what falls under the umbrella of "strategic workforce planning" (SWP). They're also unsure who owns this process, as the study notes that 58 percent say senior management is responsible and 28 percent point to HR. Thirty-seven percent of executives say they're spending more on SWP software to address talent issues, but for finance leaders this is a difficult sell. Spending more without a clear mandate may not achieve desired results.
Another option to help design effective long-term strategy? Spend on workforce planning technology that empowers the capture and integration of "clean data." It's the next iteration of big data — information that's clear, actionable and pulled from multiple sources across the organization. With the right tools to collect, anonymize and integrate this data, it's possible to make human capital the "common denominator" of strategic planning, in turn giving finance teams a clear picture of employee value end-to-end, from initial onboarding to their impact across multiple processes and departments. Armed with this data, finance leaders can work with HR teams to design long-term hiring and retention strategies that speak to business needs as a whole rather than narrowing the focus to talent acquisition and ignoring the broader scope.
Workforce planning technology is quickly becoming ubiquitous as businesses look to meet talent shortages head on. For finance leaders, the right investments can make all the difference for cost-effective hiring, retention and long-term strategy.
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