Originally posted on CIO Asia
Today's highly challenging business climate has made it increasingly difficult for organisations to thrive and stay ahead of the game, with constantly changing market, legislative, and industry conditions. In order to stay differentiated and maintain the long-term viability of the organisation, costs must be minimized and a unique competitive advantage created by leveraging an organisation's most valuable resource; namely, it's people. This is where the effective management of human capital becomes a key factor in an organisation's success.
As the core foundation of every business, the workforce has a direct and decisive impact on the company's bottom-line, corporate culture, productivity, and long-term viability. However, recent statistics have shed light on two worrying trends that all HR leaders ought to take note of: signs of a gradual yet steady decline in worker productivity worldwide, and acknowledgement that employees are the costliest asset in most organisations.
Based on a study by Oracle, the combination of personnel costs for salaries, benefits, training and temporary staff often exceeds over 50 per cent of the total organisational operating budget. However, In spite of this significant financial investment, many business leaders have admitted to dedicating less than 10 percent of their time to enhancing the effectiveness of their workforce management (WFM) practices. In fact, many organisations are not accurately accounting for or monitoring their labour spend, or tracking when their workers are absent or unproductive. As such, little is known about the consequent labour-related impact on financial results.
In view of this, the need to have in place the right WFM strategy has become more critical than ever before. Encompassing all the activities needed to maintain a productive workforce, WFM provides transactional and analytic functionality, as well as the business intelligence tools for planning, budgeting, monitoring, and compliance. This aids in monitoring the organisation's key performance indicators and aligning HR activities to organisational goals, thus providing businesses with strategic insights into the strength of the workforce, and identifying areas where change is necessary to positively impact the bottom-line.
Tracking accountability and labour productivity
In order to provide organisations with a better understanding of their workforce, WFM includes functions that provide HR leaders with the capability to match business demand with an appropriate labour mix. For example, features such as attendance tracking and absence management provide insights that can then be reconciled with the availability, skills and eligibility of employees, which can aid in areas such as labour budgeting, forecasting, and task management.
Enabling real-time collaboration and insights
In line with the modern employee's need for convenience and "on-the-go" accessibility, WFM solutions have also been enriched with features such as analytics, support for mobile devices, and social networking technology to enable real-time collaboration and insight. By keeping the workforce engaged via mobile capabilities and social networking, employees will be able to collaborate more effectively and achieve greater productivity gains.
Staying relevant to changing business conditions
Apart from the benefits of workforce and insight analysis, deploying the right WFM strategy also enables organisations to stay ahead of developments across the global business landscape. With market demands, industry conditions, legislative developments and emerging governance and compliance needs, having in place the right WFM practices makes it much easier for organisations to monitor these shifts and stay up to date at all times.
Developing every employee's potential
Also imperative to every organisation is the need to attract and retain the best talent. The best talent is often found within the organisation, but this potential source of expertise may remain unexploited if organisations fail to identify and harness their abilities. To address this need, WFM enables the systematic assessment and tracking of each employee's capabilities, which can then aid in the development of professional training programs designed to nurture every individual[i]. Essentially, by understanding every employee's potential, businesses can then better match their strengths with roles that will enhance their careers, and more importantly, boost their overall efficiency and value to the organisation.
Fundamentally, a comprehensive WFM strategy is key to attracting, developing and maintaining a high-quality workforce. This strategy provides a wealth of strategic data that, when properly harnessed, can have a decisive impact on the long-term viability of every organisation. By identifying and addressing critical gaps in the workforce, organisations become empowered with the capability to transform their human capital into a productive, effective and successful foundation for business growth.
John Hansen is vice president, HCM product management, JAPAC at Oracle. Follow him on Twitter @JohnHansenHCM