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Home Workforce

Measuring workforce effectiveness

measuring workforce effectiveness

What is workforce effectiveness?

Workforce effectiveness is the overall measurement of the productivity, performance, unit-cost, output and any other metric that is used to calculate the effectiveness of your employees. It is a series of strategic business decisions that helps an organization focus and improve their workforce. 

Companies implement these workforce strategies by monitoring employee activities and then deciding what role and responsibilities should be assigned to the employee(s). Workforce effectiveness ensures high employee productivity, which means organization has a better chance of achieving its goals.

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Measuring Workforce effectiveness

Measuring workforce effectiveness is an important metric for managing and handling a team, to help them achieve their full potential. This metric helps organizations keep a track of how productive their employees are. 

There are various roles and designations in an organization. Having said that, some roles are easier to evaluate than others as the parameters change with each role. Some roles have a quantifiable target and their effectiveness is measured based on their performance against the assigned goals. 

However, it can be much harder to measure the effectiveness subjectively! There are various methods used to measure employee effectiveness: performance management, 360-degree review, employee engagement survey, employee satisfaction survey and more!

You can use one or more methods individually or in combination to collect data that talk about actionable insights. It is the data that helps an organization maintain a record of how their employees are performing in workplace, what areas they need training in, what software needs to be upgraded to help them perform better, etc.

In today’s workplace, there are three main workforce models: the office workforce, working in a central location; the mobile workforce, which operates remotely or in the field; and the hybrid workforce, combining office and remote work. Each model offers unique advantages and adaptability to meet the demands of modern business.

Organizations believe, “what gets measured gets done.” This is a strong sentiment when it comes to workforce. You will need clear and accurate metrics to measure the effectiveness of your workforce. You want to know what value your employees are bringing to positively affect the bottom line of your organization.

LEARN ABOUT: Workforce Planning Model

Here are the 5 metrics you should be tracking to make sure your employees are as optimized as possible: 

1. Employee productivity

This is a tried and tested metric and a true measure of how much work your employees are getting done. According to studies conducted by the Houston Chronicle, you don’t need high-end, expensive software to track the progress of your employees. 

While this is far less analytical, but leader/managers/supervisors should try using time tracking tools like a simple timesheet to fill in the tasks undertaken by an employee. This encourages accountability and reduces micromanagement. As a manager/supervisor you can review the sheet on a weekly basis and leave your feedback for the employee(s). 

2. Employee retention

Employee retention is another important metric. Turnover can be quite costly for any organization for a variety of reasons including lowered levels of employee productivity, increased cost of recruitment and then training and loss of skilled employees (in most cases). So closely tracking your employee attrition and employee retention rate is essential for effective management of your workforce. 

While attrition is considered negative, you also need to closely watch who is leaving. If it is your star employee, then it surely is a matter of concern. Therefore, you should build strategies to retain your best performers and segregate the slackers.

3. Employee compensation

It is for a fact, you compensate your employees for the work they do in your organization. Compensation can be fixed or can include a variable component as well. This is an equally important metric and to track this metric you will need to calculate the gross profit company makes for every dollar spent on the salary of your full-time employees 

Without a single doubt, what gets measured, gets done, this metric can help your employee and drive them to results and lay a firm foundation for continuous improvement. Ultimately it is a win-win situation for both, your high performing employees as well as the organization. 

4. Profitability

No need to even say, it is profitability that is essential for the success of any organization. It is important that you track what is the revenue generated by each employee. To calculate this, you simply have to divide the total revenue generated by the number of employees in your organization. 

These numbers will not only help in measuring what each employee is contributing to the bottom line but also helps you evaluate the cost of employee turnover.

5. Workforce-related cost

This is the sum of all the employee-related cost, their compensation, benefits and any other expense related to your full-time employees over a given period of time. This metric helps you give realistic data in terms of the money spent and helps you make better strategic decisions particularly in terms of hiring and retaining employees. 

4 Tips to improve workforce effectiveness

Trends change, employees move out of an organization, move to another organization, generations pass by. Then there are millennial that have a totally different take on how they want to utilize their time at work. For an organization, this would mean, they will need to strategize better to make those hours count. 

Here are the 4 tips to help you improve your workforce effectiveness: 

1. Managers need to delegate

Your senior management needs to learn the art of delegation. They might think they already master it, however, when it comes to actually doing it, many fail miserably. It might seem important to be involved in all activities that employees do during their work hours. Well, micromanagement kills most of your productive hours at work. They end up spending time checking and re-checking every detail. 

Entrust your employees with responsibilities, you hired them to perform those tasks in the first place. Give them the chance to prove themselves. Employees when get the impression that they are trusted, they become more accountable. 

2. Feedback is essential 

According to statistics given by PwC, nearly 60% of employees believe that feedback is absolutely essential. Organizations that value feedback and consider it to be a regular process have seen a 14.9% lower turnover rates. 

Tell your employees what is needed of them, how you can help them advance their career in the organization. This will motivate them to perform better and faster. Be extremely clear while stating goals to your employees. This is one way to ensure employee engagement. 

3. Autonomy 

If delegating tasks improves employee productivity, so does autonomy. It opens avenues to increased employee productivity. Stressed-out employees won’t be as productive as the ones who know that their manager trusts them with the decisions they make. 

If micromanagement gets too bad, employees end up making more and more mistakes. Not being able to do their job to the best of their abilities is bad enough already. Micromanagement only adds fuel to the fire. 

4. Keep high morale

Employee satisfaction is the highest when the employees are happy at their workplace. In fact, they work harder, smarter and better! High employee morale comes from workplace culture and culture is not easy to set up. But once you set it up it will keep your employees accountable. Your employees need to know you care about them and are happy to help them through the different phases of their career. 

QuestionPro Workforce is trusted by HR managers to monitor, gauge, and improve their workforce experience processes. Sign up and start measuring employee productivity, workforce engagement, and staff experience among others.

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About the author
Adi Bhat
Aditya Bhat, a.k.a. ‘Adi’, is a thought leader in market strategy and business development. He leads QuestionPro's sales teams to partner with companies, government organizations, and nonprofit institution.
View all posts by Adi Bhat

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