Cost Reduction is Top Challenge for Businesses
Well over half (64%) of U.S. businesses say cost reduction is the top challenge they expect to face in the coming year and less than half (48%) of enterprises can confidently answer questions about whether the right employees are doing the right work to execute business strategies, according to recent research from workforce analytics and modeling company OrgVue.
The survey of over 400 human resources (HR) and finance decision makers in the U.S. and UK also found that a major gap exists in how well HR and finance collaborate when it comes to workforce planning. Less than a third (28%) of HR and finance departments have shared reporting systems and processes, according to the study, “Making People Count: 2019 Report on Workforce Analytics,” which surveyed companies of over 1,000 employees from a wide variety of industries.
With business disruption proliferating – from automation and machine learning redefining roles – to the impact of a potential economic slowdown, only a third (38%) of respondents feel they could restructure their workforce quickly. Even fewer (25%) strongly agree that they can easily update their organization’s design, suggesting a lack of agility.
Central to these challenges is that many businesses still don’t have a data-driven companywide view of their workforce that is reliable and necessary. Collaboration between HR and finance teams is critical to achieve the agility companies need to compete in this business environment.
“A big shift in how businesses are thinking about cost reduction is necessary,” said Russ Clarke, President, North America, OrgVue. “The most successful companies no longer think of it as an event undertaken every two years, and instead are building transparency and control between finance and HR to evaluate workforce management on a monthly, ongoing basis.”
Some other highlights from the Making People Count: 2019 Report on Workforce Analytics found that:
Only 44% of HR and finance decision makers can confidently say that their workforce is aligned to their operating plan and investment strategy;
A majority (67%) of HR and finance decision makers claim it’s important that their top talent is focused on the most critical work, but only 45% can answer questions about whether they actually are;
While 45% of HR leaders believe their rapport with finance is productive, just 25% of finance professionals feel their relationship with HR is collaborative;
HR firmly believes workforce planning should be their responsibility (76%) whereas more than 55% of finance respondents disagree, believing it to be the responsibility of their department;
52% of U.S. companies are working on diversity reporting; yet only 27% are working on gender pay gap reporting. In the UK, the number is greater than 60% for both diversity reporting and gender pay gap reporting.
Continued Clarke, “Although there have been significant strides in workforce analytics, HR and finance functions still do not collaborate at the levels that they need to, according to our research. Leveraging data to break down these silos can create significant value and ensure more agility.”
The full report, Making People Count: 2019 Report on Workforce Analytics, is available for download here.