In today’s economic climate, a number of major companies are not achieving their full potential in terms of revenue and profit. Whilst this can be attributed to a number of factors, such as diminishing demand or unstable credit markets, in my opinion, one of the major contributors is workforce numbers and skills – a problem which can be remedied.
Whilst conducting research with my co-authors for our new book “Calculating Success”, we discovered that a number of companies have made major cuts over recent years, including redundancies and headcount reductions. As a result, in my recent interactions with clients across most industries, managers in many companies are leading teams which are seriously overstretched. Overly lean work forces are doing the work of too many people and as a result there are too few staff trying to juggle too much work. Employees are working longer hours to make up for the drop in headcount, and this is not good for people or society at large.
Keeping this in mind, I observe that unemployment levels in the UK could potentially be artificially high, as staffing levels are not at the levels they should be to effectively do the work required to create more revenue and profit. Many organisations make the erroneous assumption that the number of staff in an organisation equates only to the level of outgoing costs. What companies often don’t realize is that headcount also equals revenue and profit. As a result, companies are underproductive, and not achieving their full potential.
In addition to under-staffing, our research also found that the vast majority of large companies don’t know how many employees they have, or where they are deployed: they certainly don’t know how many more employees would be needed in order to grow and increase their profits, let alone the return on investment in their workforces.
In recent years I have seen a number of engagement surveys revealing that employees are overworked and highly stressed, and this may be unnecessary. Using workforce analytics would help companies to better understand and predict how many employees they need in order to optimize the business for higher performance and greater profit. Companies can, therefore, calculate the return on investment and choose to replenish their teams, based on accurate prediction of return on investment – Calculating Success.
The application of workforce analytics is a discipline. It is about implementing clear processes, creating a system, training and truly understanding the process. However, ultimately, if many companies can obtain a better understanding of the value of their workforce, they could increase their revenue, address the balance and ultimately decrease the unemployment levels in our society.