Workforce resources for small businesses
There’s an old saying about economists that crops up every now and then, and goes a long way toward explaining why economic analysis sometimes gets a bad rap. The saying is that an economist will look at a person with one foot in a bucket of ice and the other in a bucket of fire and proclaim that, in terms of an average temperature, that person should be just fine.
This saying was recently repeated (by me) at a workforce conference at the Kansas City Federal Reserve. I used it to illustrate that American business can no longer take an “on average” view of their workforce investments. As in other business processes, talent management must drill down to cause, effect and customized solutions similar to those used in customer service, market identification, supply chains, and process control.
A report from the Harvard Business Review describes why this is so important [mfm]“Taking Measure of Talent”. Harvard Business Review Analytic Services Report. Harvard Business Review. www.hbr.org. 212.872-283.[/mfm]. The report stated that companies implementing talent management programs that automate tasks and gather data on workforce actions were gaining an edge over their competitors [mfm]Ibid. Page 8.[/mfm]. “Early adopters have created tangible value for themselves…gaining a hard-to-replicate competitive edge,” said Jenny Shapiro, a senior vice president of human resources at Morgan Stanley.
These systems […] provide a comprehensive method for understanding how hiring and training can directly support the development of new product ideas, improved customer service, and reduce turnover costs.
The centralization of data, analyzed to demonstrate how workforce investments and outcomes can be aligned with business goals, will be a game-changer in this decade. And it will not be a technique only used by large companies. Small and medium-sized companies will also take advantage of workforce analytics if they want to stay on top of the return to their investments.
Up to now, it’s been hard to parse the tangible value of the workforce from the intangible value it creates because we haven’t had accounting measures to validate the risks and returns. Investments such as recruitment, hiring, and wages and benefits have been written off as expenses without having analyzed how those expenses furthered business success.
Many global businesses – the usual early adopters of data analysis technology – are already investing in automated talent management. The difference between an automated talent management system and an HRIS (human resource information system) is the inclusion of workforce actions and analysis in the talent management technology. These systems, like Oracle’s Taleo, perform analyses on workforce investments and their results, and tie them to businesses’ strategic goals. In doing so, they provide a comprehensive method for understanding how hiring and training can directly support the development of new product ideas, improved customer service, and reduce turnover costs.
Small businesses could really benefit from the use of talent technology like this. A study by Mercer of 3,000 senior managers said that the managers felt that the gap between the data they needed to make good decisions and the quality of the information they were receiving was a difference of more than 50 percentage points [mfm]Ibid. page 1.[/mfm]. Currently, there are a few small talent management software providers in the cloud. But while that number is growing, most providers still serve large companies.
There are myriad resources small businesses can review in preparation for their development of internal workforce systems. Two very good websites are http://home.bersin.com/and www.astd.org. Both of these sites have research on talent management and talent management tools.