The Leader Magazine

MAR 2019

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12 March 2019 the leader F E A T U R E A R T I C L E R oughly 70 percent of businesses see labor analytics as a high priority in their organizations. However, many business leaders find themselves struggling with how to integrate this critical data and key insights into their site strategies. Labor analytics is no longer about finding and flagging seemingly interesting information and sending it to human resources and business leaders. In fact, many companies still use excess capacity as the primary factor for placing talent that is critical to the success of their business strategies. While optimizing your real estate footprint is important, using it as the most important factor in placing talent is like putting the cart before the horse. Labor can account for 60 to 70 percent of a company's cost structure while real estate is less than 10 percent. Yet, few companies have plans to use labor analytics in curtailing issues they face. Labor-analytics tools can help find solutions to the challenges that face businesses in real time and that businesses will continue to face as they move forward. So, what are some of the challenges with creating a discipline around leveraging labor analytics in your site strategies? s o much data – but what does it mean? There is a wealth of data available. The question is, what do you do with it? The most successful programs leverage this data to answer key business questions and link it directly to location decisions. Questions like, "What's the tipping point before I start seeing wages rise or time to hire increase," or, "I need new skills in the future; can you tell me the top locations to acquire these skills?" Another common application for this data is to benchmark an existing real estate portfolio and effectively recalibrate a global footprint. Labor analytics can accent the HR process by providing data regarding employee attrition, hiring metrics, employee cost, market competitiveness, and employee engagement by geography. Best-in-class programs implement their own internal workforce-planning process that is linked into the corporate strategic planning process annually. But industries and companies are going through transformation at an accelerated pace. These companies realize that the skills of the future might not be the same ones that have been required in the past; therefore, they assess critical skills and their locations through their internal business- planning processes. Amazon's second-headquarters decision was a clear example of how important talent was to the site-selection process. Cities across the United States and Canada were competing for one of the most visible and public site-selection processes on record, and yet it came down to those cities that had the right skills at the right price to meet Amazon's needs – now and into the future Going from knowing what to do to actually doing it Labor analytics can give a wealth of information about what you should do and where you should do it. But that's only half the battle. Building a compelling business case that successfully gets buy-in from business leaders is often where labor strategies stall. Why? There are several reasons: 1. Costs: Even though a solid business case may demonstrate a clear path based on wage rates and the size and quality of the workforce, the upfront costs are steep. Costs such as severance, dual staffing, relocation, hiring and recruiting can all be heavy in the first few years of establishing a new site. Looking at various options for mitigating the impact of the costs can help in getting over this hurdle. Labor analytics: the horse before the cart by Beth Choulas

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