“What gets measured, gets managed”
This dashboard provides benchmarks and results on an advanced set of human capital metrics. It can be used to quantify overall workforce productivity, compare relative performance to peers, highlight positive workforce trends and identify potential problem areas for future improvement.
Why Workforce Productivity Dashboard?
Organizations frequently state that employees are their most valuable asset, and for most, employees are also the single largest expense. However, traditional financial statements contain little or no information on the workforce, a critical source of value creation for all organizations.
This lack of human capital information makes it nearly impossible to benchmark an organization’s productivity and talent management effectiveness. Globalization, connectivity, and technology are speeding the transition to an economy swimming in “Big Data” and driven by knowledge rather than goods.
In this new landscape, human capital is a critical differentiator.
Benchmarking Your Data:
Without accurate benchmarks, it is difficult to know if a particular metric result is good or bad. However, even if competitors are outperforming your organization, if your organization is improving at a faster rate and sustaining that growth, you will gain ground and win out over time.
Defining Workforce Productivity:
The Bureau of Labor Statistics defines workforce, or labor productivity, as the output per hour or the relationship between the output generated by an industry and workforce hours involved in the production. However, this measure does not recognize the influence of production factors, human involvement, or other working capital. It is a simple direct calculation between production results and hours of work needed to complete the production.
Product output alone does not show how productive your workforce is. HCMI agrees with the BLS’ definition since productivity is a measure of how much input is needed to create one output. However, HCMI considers that productivity should be measured across different dimensions and encourages companies to go beyond simple hours input and consider product output ratio and different ways of measuring productivity instead. Some additional questions to consider are:
- How much time does it take to produce one unit?
- How much does it cost and how much revenue does it generate?
- How much does our workforce cost?
- What is needed to create greater value?
Which has more impact on productivity?
#1. A 10% decrease to inputs? = 6, a 15% productivity gain
#2. A 10% increase in outputs? = 10, a 25% productivity gain