Session 5

W O R K F O R C E A N A LY T I C S
What is Workforce Analytics
Workforce analytics involves the use of advanced data analysis techniques, statistical methods,
and sometimes machine learning to uncover patterns, trends, and correlations within the data.
By examining these patterns, organizations can make strategic decisions to improve their
workforce management strategies, allocate resources more effectively, enhance employee
experiences, and drive overall organizational performance.
 Key Areas that Workforce Analytics
can Addres
1.Talent Acquisition: Analyzing recruitment data to understand which sources are most effective for finding
quality candidates, identifying the characteristics of successful hires, and predicting future hiring needs.

2.Employee Engagement: Measuring employee engagement through surveys and other data sources to
identify factors that contribute to engagement or disengagement, and implementing strategies to improve
overall job satisfaction.

3.Performance Management: Analyzing performance data to identify high-performing employees, evaluate

the effectiveness of performance appraisal processes, and identify areas where additional training or support
might be needed.

4.Retention and Turnover: Identifying patterns and factors that contribute to employee turnover, enabling
organizations to take proactive steps to retain valuable employees.
Key Areas that Workforce Analytics
can Addres
5. Diversity and Inclusion: Analyzing workforce data to ensure diversity and inclusion initiatives
are effective, identify potential bias, and create a more inclusive workplace.

6. Workforce Planning: Using predictive analytics to forecast future workforce needs based on
business goals and trends, enabling organizations to proactively address talent shortages or surpluses.

7. Learning and Development: Analyzing training and development data to determine the
effectiveness of various learning initiatives, identify skills gaps, and tailor training programs to
individual needs.

8. Workforce Productivity: Analyzing factors that impact productivity, such as work schedules, task
allocation, and workplace conditions, to optimize overall workforce efficiency.
Type of Forecasting
 Time Series Forecasting
Time series forecasting is used when data points are collected at regular intervals over time. This method involves
analyzing historical data to identify patterns and trends that can be used to make future predictions. Common
techniques within time series forecasting include:
• Moving Averages: Calculating the average of a specific number of past data points to smooth out fluctuations
and identify trends.
• Exponential Smoothing: Assigning exponentially decreasing weights to past observations to give more
importance to recent data while accounting for older data.
• ARIMA (AutoRegressive Integrated Moving Average): A more advanced method that combines
autoregressive, moving average, and differencing components to model and forecast time series data.
• Seasonal Decomposition: Separating the time series data into trend, seasonal, and residual components to
analyze and forecast each component separately.
Casual Forecasting
Causal forecasting involves predicting future outcomes based on cause-and-effect relationships
between variables. It takes into account external factors that influence the variable being
forecasted. Techniques within causal forecasting include:
•Regression Analysis: Identifying relationships between one or more independent variables and a
dependent variable to predict future values.
•Econometric Models: Using economic theories and statistical techniques to predict outcomes
based on relationships between economic variables.
•Multiple Linear Regression: Extending simple linear regression to include multiple
independent variables, allowing for more complex predictive models.
Qualitative Forecasting
Qualitative forecasting methods are used when there is limited historical data or when the
situation is highly uncertain. These methods rely on expert judgment, opinions, and qualitative
information. Techniques within qualitative forecasting include:
•Expert Opinion: Gathering insights and opinions from domain experts to make predictions
about future trends.
•Delphi Method: Iterative process where experts provide forecasts anonymously, and the results
are aggregated and refined through successive rounds.
•Market Research: Collecting data from surveys, focus groups, and other sources to gauge
customer preferences and behavior.
Machine Learning Forecasting
Machine learning techniques can be applied to forecasting by training models on historical data
and using them to predict future outcomes. Some machine learning algorithms used for
forecasting include:
•Random Forest: An ensemble learning method that combines the predictions of multiple
decision trees.
•Support Vector Machines: Finding a hyperplane that best separates data points and can be used
for prediction.
•Neural Networks: Complex models inspired by the human brain that can learn intricate patterns
in data.
Methods of Forecasting
Exponential Smoothing Method
The exponential smoothing method is a widely used forecasting technique that is particularly
effective for time series data with relatively stable patterns and a consistent level of noise or
randomness.

It's based on the idea of assigning exponentially decreasing weights to past observations in order
to give more weight to recent data while still considering older data. Exponential smoothing is
useful for making short- to medium-term forecasts.
Log Linear Regression Forecasting
Log-linear regression is a statistical technique used in forecasting and modeling relationships
between variables when the relationship is expected to be multiplicative rather than additive.

In log-linear regression, you take the logarithm of the dependent variable and use linear
regression techniques on the transformed data.

This approach is particularly useful when the percentage change in the dependent variable is
expected to be related to changes in the independent variables.
Log Linear Regression Methodology
1.Transform Data: Take the natural logarithm (ln) of the dependent variable and possibly the
independent variables as well, depending on the nature of the relationship.

2.Perform Linear Regression: Conduct linear regression analysis on the transformed data. The
regression equation will involve the transformed (logged) values of the variables.

3.Interpretation: The coefficients from the log-linear regression model represent percentage changes
rather than absolute changes. For example, if the coefficient for an independent variable is 0.1, it means
that a 1% change in that variable is associated with a 0.1% change in the dependent variable.

4.Back-Transformation: If you want to present your results or forecasts in the original scale, you'll need
to back-transform the logged values. To do this, you exponentiate the predicted values or coefficients.
 Trend Method of Forecasting
1.Data Collection: Gather historical data for the variable you want to forecast. This data should include values over a period of time.

2.Plotting the Data: Plot the historical data on a graph to visually identify the general direction of the trend (upward, downward, or flat).

3.Trend Analysis: Analyze the plotted data to determine the nature of the trend. Is the trend linear (constant rate of change), exponential
(multiplicative growth), or some other form?

4.Model Selection: Based on the type of trend observed, select an appropriate model to represent the trend. This might involve fitting a
linear regression model, an exponential growth model, or another appropriate mathematical function to the data.

5.Parameter Estimation: If using a specific mathematical model, estimate the model parameters using techniques like least squares
regression. The parameters will determine the slope, intercept, growth rate, or other characteristics of the trend.

6.Forecasting: Once the model is established and the parameters are estimated, use the model to predict future values of the variable.
Project the trend into the future based on the established pattern.

7.Validation: It's important to validate the accuracy of your forecast by comparing it to actual data as time progresses. Adjustments might
be needed if the actual values diverge significantly from your forecast.
Types of Trend
•Linear Trend: A linear trend can be represented by a straight line equation (y = mx + b) where
"m" is the slope and "b" is the intercept. This model assumes a constant rate of change over time.
•Exponential Trend: An exponential trend can be represented by an equation like y = ab^x,
where "a" and "b" are constants. This model indicates exponential growth or decay.
•Logistic Growth Trend: This model is suitable when growth starts rapidly, then slows down as
it approaches a limiting value. The logistic growth function represents this type of trend.
•Polynomial Trend: For more complex trends, polynomial models (quadratic, cubic, etc.) can be
used to capture curvatures.
Ratio Method of Forecasting
•The "ratio method" of forecasting could potentially involve using ratios or proportions from
historical data to predict future values.
•This might include calculating ratios between different variables, such as sales to advertising
spend or production output to labor hours.
•These ratios could then be applied to relevant future data to generate forecasts.
Correction Method of Forecasting
•The "correction method" in forecasting might refer to a technique where forecasts are adjusted or
corrected based on certain factors or information that was not initially considered.
•This could involve monitoring the accuracy of earlier forecasts and making updates as new data
becomes available.
•Corrections could be made to account for unforeseen events, changes in market conditions, or
inaccuracies in the initial forecasting model.
END OF
SESSION
Dr. Urjit Kavi