Mercer: HR analytics helps tackling workforce tsunami

12 February 2015 4 min. read

In a recently released discussion from HR Directors Business Summit in Birmingham, Mercer’s HR Principal Julia Howes discusses comments made by her colleague Charlotte Harding at the World Economic Forum. She notes that HR data analytics will be extremely useful in mapping out a firm’s future labour demands and oversee the deep uncertainties approaching from an aging population and the rise of robots.  

In September last year reported on BCG’s long term analysis of the labour market in Europe and around the world. The findings varied across regions; however, the UK shows a single digit surplus in 2020 of between 6% and 8%, and a labour force that balances between a slight surplus and a slight shortage by 2030. Brazil is especially expected to face challenges, with IT staffing issues already on the horizon.

Labour Supply Versus Demand

Workforce tsunami
The problems associated with a disjointed workforce, with under- and over-supply may indicate, according to experts from HR consulting firm Mercer, that “a workforce tsunami is approaching.” To prevent supply issues from inundating businesses and to prepare them for a changing and potentially radically different labour future labour market, Julia Howes, a Principal at Mercer, cites the firm’s own researcher Principal Charlotte Harding, that an emphasis on HR analytics will need to play a key role in determining the future of work. “We know that the future workforce will be highly fragmented, but we don’t know what capacity this workforce will work in, or in what direction organisations will go,” according to Harding.

Julia Howes and Charlotte Harding - Mercer

HR analytics
As it stands employers are engaging a combination of channels to fill role requirements, with 64% of firms currently employing agency workers for “short term access to key strategic skills,” over employing or training their own talent to fill the shortcoming. To best decide how to engage talent, the insights that HR analytics give, may be able to provide strategic solutions for talent bottlenecks within the organisation – so that firms can act confidently and efficiently between expanding their own talent or buying in talent for specific levels of an organisation. Another benefit from an analytic approach, according to Howes, is to map out the future strategic needs of an organisation, helping employers identify what kinds of roles and skills will be needed so that HR can act proactively rather than reactively on training or headhunting the required talent. Further benefits includes identifying the movement of workers within the organisation, to gain an understanding of how people move into and out of positions to potentially identify poor management and other factors influencing people to stay or go.

To gain a good grasp of the workforce in a way that performance and costs were understood throughout and that staff development and productivity could be prioritised in key areas, the current HR information systems (HRIS) need to be overhauled for a system of analytics that does capture the “total workforce.” With the information gleaned from analytics made available to the key decision makers within an organisation, a better decision making process can be put in place for executives to understand the whole organisational development. “It is vital that HR is aligned with company growth,” Howes adds.


IT shortages
The environment in which businesses are operating is rapidly changing, with 90% of the world’s information created in the past two years, 88% of employers are already reporting IT shortages – which means that organisations are already not equipped to deal with the changing market conditions. “A lot of it boils down to us not be ready for the shift,” explains Howes. The changes in the future around automation may have a massive effect on the UK labour market, with one report citing that up to 1/3 of currently work is under threat. These changes, according to Mercers’ Harding, call up deep social questions, saying “It is no secret that many jobs could be replaced by robots – termed ‘robo-sourcing’ – but we as a society are not yet ready to have robot surgeons operating on us.”