Opinions expressed by Entrepreneur contributors are their own.
I want to talk to you about something important: the price of pho. A few years ago at the Vietnamese noodle joint around the corner from my office, a large bowl cost $12. Now it’s $17.
How did my bill for the exact same meal jump almost 50%? It’s no mystery. Businesses of all kinds are wrestling with unprecedented inflation. But that’s not their only challenge.
Even as the cost of doing business keeps climbing, geopolitical tensions are hampering trade and rattling stock markets. Meanwhile, employee engagement is in the dumps, and finding the right talent remains elusive. Then there’s AI, which is disrupting work in ways we’re just starting to grasp.
The result is a business survivability emergency. It’s no exaggeration to say that companies today are facing an existential threat on multiple fronts. No wonder almost half of CEOs believe that if their business stays on its current path, it won’t be viable in 10 years.
Here’s why companies find themselves in such a tough spot and how they can turn things around by better understanding the one resource that’s right in front of them — their people.
Related: AI Will Radically Transform the Workplace — Here’s How HR Teams Can Prepare for It
Unpacking the “performance erosion crisis”
Despite all of our technology, people — the basic driver of any business’s success — remain a black box at most companies. Today, we can get real-time insights on customers and prospects through modern sales and CRM tools. But when it comes to the people working alongside us, we’re often flying blind.
We’ve had people analytics for generations, of course, but they’ve been confined to spreadsheets and limited to HR wonks. And even when information about people is available, it’s typically siloed and inaccessible to the managers who need it most. At the same time, performance isn’t systematically tracked.
The result is a performance erosion crisis. Productivity, in no uncertain terms, has flatlined. In fact, it’s now at a 75-year low and is the number one challenge, according to executives.
Meanwhile, half of employees are disengaged, making them more likely to be unproductive or simply walk out the door, and three out of four businesses are having trouble hiring skilled talent. As a result, 1.9 million manufacturing jobs could remain unfilled in the U.S. by 2033.
And don’t forget the elephant in the room: AI. Employers reckon that almost half of workers’ skills will be disrupted in the next five years. For companies, uncertainty about who to hire leads to inefficiency and churn. If people are expensive, that makes things even worse.
Just ask blue-chip stalwart Intel, which is laying off 15,000 people — 15% of its workforce. With revenue declining, the tech giant admits that it’s failed to benefit from AI.
In short, growth expectations are as ambitious as ever. But as productivity has stalled relative to operating costs, businesses everywhere are headed in exactly the opposite direction.
How companies can come out on top
To pull through in these uncertain times, businesses must capitalize on their most valuable resource: now, more than ever, they need real-time insights that connect the dots between their people and business results.
What I’m talking about is categorically different from the people analytics of yesteryear — dense tables reserved for HR analysts. What’s needed are on-demand insights accessible across the company, in real-time. For people data to be useful, it must be intuitive enough for managers to use to drive daily decisions, big and small.
The good news is that while AI is a catalyst for disruption, it’s also giving businesses a workforce edge when it comes to tackling the performance erosion crisis.
Think of the questions that every company has about how people impact business outcomes. Who are our top performers? Who’s most at risk of quitting? Where is productivity dipping?
Related: AI Is Changing the Way We Look at Job Skills — Here’s What You Need to Do to Prepare.
New platforms let managers ask those questions in plain language — and instantly deliver a clear, actionable response. The best of these draw on a vast database of millions of anonymized employee records across industries to deliver tailored results and accurate benchmarks.
Pay is yet another area where real-time people data can be a game changer. Even though most companies have a detailed compensation policy, the managers who make pay decisions often shoot from the hip, letting bias cloud their judgment. AI-powered smart compensation tools help managers make more informed choices, factoring in not only industry standards but individual employee performance while flagging pay gaps linked to racial, gender and other biases.
Indeed, new platforms can serve as a one-stop shop for many of the repetitive questions that employees typically lob at HR, whether it’s about salaries, vacation days or benefits. Turning all of that information into a self-serve function liberates HR teams from manual toil, freeing them up to focus on what really matters: ensuring the business has the right people to propel it forward.
Of course, technology alone is not a panacea. Companies that want to capitalize on real-time people data must also be willing to make a culture shift. This starts with a willingness to share insights on people and performance once hoarded by HR. People represent most companies’ biggest budget line-item and single most important driver of business success. A commitment to understanding how they work best and to sharing that information in ways that are consistent, understandable and safe is a prerequisite to getting the most out of AI-powered tools.
Confronting the workforce challenge at the root of the performance erosion crisis isn’t rocket science. To get the most out of people in an unpredictable world, you need to understand them and how they impact business outcomes. In my experience, the best way to do that is by tapping the real-time insights that AI can deliver. Like my bowl of pho, running a business won’t get any cheaper, so it’s time to gain an edge by working smarter.
The post originally appeared on following source : Source link