AGL Energy Leads the Charge in Data-Driven Workforce Planning.

A Model for Industries Lagging Behind

Data is king, and so are the human insights to pull the right data to make informed decisions. So on that note, let's talk about why, what and how AGL Energy is setting a new gold standard for workforce management and planning strategies.

As one of Australia's leading integrated energy companies, AGL 's recent moves showcase a commitment to innovation that not only positions them at the forefront of their industry but also offers valuable lessons for sectors still grappling with digital transformation.

A Strategic Expansion of HR Technology: Leaving Traditional Models in the Dust

Building on their 2017-2018 transition from SAP to Workday for core Human Capital Management (HCM), AGL Energy is now expanding its Workday footprint. This expansion includes the implementation of new capabilities such as Talent Optimisation and Career Hub, signaling a shift towards a more data-centric approach to human resources management.

Amanda Lee, AGL's Chief People Officer, shared insights into this transformation at the recent Workday Rising conference.

"We're working towards getting data faster, getting better insights, and turning those insights into actions," Lee explained.

This move is not just about adopting new technology; it's about fundamentally changing how AGL approaches workforce planning and employee development.

What Good Looks Like:

• Continuous evaluation and expansion of HR tech stack
• Integration of AI and machine learning into HR processes
• Shift from reactive to predictive workforce planning

Industry Comparison: While tech giants like Google and Microsoft have long been at the forefront of data-driven HR, many industries are still catching up. For instance, traditional manufacturing and retail sectors often rely on outdated, siloed systems that hinder comprehensive workforce analysis.

Data-Driven Decision Making: From Gut Feel to Informed Strategy

At the heart of AGL's transformation is the goal to provide leaders with better, more timely data to inform their decision-making processes. The new Workday capabilities are expected to offer real-time analytics and predictive models, enabling more strategic workforce decisions.

AGL also aims to enhance its workforce planning by mapping current skills against future needs. This proactive approach will allow the company to identify skill gaps early, informing strategic hiring, training, and development initiatives.

What Good Looks Like:

• Real-time dashboards for instant workforce insights
• Predictive analytics for future skill needs
• Data-backed succession planning

Missed Opportunities: Many healthcare organisations, despite having vast amounts of employee and patient data, often struggle to fully leverage this information for workforce planning. While some leading hospitals use predictive analytics for patient admissions, there's a significant opportunity to extend this to staff scheduling and skill development. Implementing data-driven decision-making could help healthcare providers optimise staffing levels, reduce burnout, and improve patient care quality.

Empowering Employee Career Development: A Win-Win Approach

The implementation of Workday's Career Hub suggests a strong focus on individual career development. Lee hinted at the use of machine learning to analyse employee data, potentially offering personalised career development suggestions and alerting managers to retention risks.

"We're capturing all of this data in Workday, so that the machine learning that sits behind Workday can surface insights that helps leaders to better manage that individual's career experience at AGL," Lee stated.

What Good Looks Like:

• AI-driven personalised career pathing
• Skills-based internal job marketplaces
• Proactive retention strategies based on predictive analytics

Industry Lag: The retail sector, known for high turnover rates, often lacks sophisticated career development tools for its workforce. Many large retailers still rely on traditional, one-size-fits-all approaches to employee development. By adopting a data-driven career pathing and personalised development strategies, retail companies could significantly improve employee retention, satisfaction, and productivity, ultimately enhancing customer service and operational efficiency.

Upskilling for the Future: Bridging the Data Literacy Gap

Recognising that new technology is only as good as the people using it, AGL is investing in its HR team's capabilities. The company has partnered with Swinburne Edge to provide professional development courses focused on data skills. This investment backs AGL's commitment to becoming a truly data-led organisation.

What Good Looks Like:

• Continuous learning programs focused on emerging technologies
• Cross-functional data literacy initiatives
• Partnerships with educational institutions for custom upskilling programs

Missed Opportunities: The manufacturing sector, amid a digital transformation with Industry 4.0, often focuses on upskilling technical and operational roles but overlooks data literacy in support functions like HR, finance, and marketing. By following a comprehensive approach to data skills training, manufacturers could unlock new efficiencies, improve decision-making across all departments, and better prepare for the future of smart manufacturing.

Driving Diversity and Inclusion: Beyond Tick-Box Exercises

One of the most promising applications of this data-driven approach is in the realm of diversity and inclusion. AGL has already seen positive results from using data to inform and focus their D&I efforts. As Lee noted,

"We've seen pretty good results in terms of using that data and seeing that data change from the actions that we've taken as a result of where the tool has told us to focus.

What Good Looks Like:

• Data-driven identification of bias in hiring and promotion
• Predictive modeling for inclusive workplace practices
• Real-time monitoring of D&I initiatives' impact

Industry Comparison: While tech companies like Salesforce have made strides in using data for D&I, many traditional industries, such as construction and engineering, are still relying heavily on qualitative assessments and gut feelings. These sectors could significantly benefit from adopting AGL's data-centric approach to developing more inclusive workplaces, potentially addressing long-standing issues with gender imbalance and lack of diversity in leadership roles.

The Road Ahead: A Marathon, Not a Sprint

While the benefits of this digital transformation are clear, AGL recognises the challenges that come with such significant change. The company is placing a strong emphasis on change management to ensure adoption and effective use of the new capabilities.

Lee views this as a long-term journey, stating,

"It's quite a long journey to get to the maturity stage of being a data-led function where you use data to support your business."

She projects that this transformation will continue to evolve over the next five years.

What Good Looks Like:

• Long-term strategic roadmap for HR digital transformation
• Regular benchmarking against industry leaders
• Agile approach to implementing and iterating on new technologies

Missed Opportunities: The education sector, responsible for preparing the future workforce, often lags in applying data-driven approaches to its own institutional management. Many universities and schools still operate with outdated HR systems and processes. A long-term, data-driven strategy, educational institutions could better align their workforce capabilities with evolving educational needs, improve resource allocation, and enhance the overall quality of education delivery.

A Call to Action for All Industries

AGL Energy's bold steps towards data-driven workforce planning and management set an example for organisations across all sectors. By leveraging advanced HR technologies and developing a data-centric culture, AGL is positioning itself to meet the workforce challenges of the future, along with redefining what's possible in strategic human resource management.

As we watch this transformation unfold, it's clear that the integration of data analytics into HR practices is more than just a trend, it's becoming a necessity for companies aiming to thrive in an increasingly competitive and dynamic business environment.

The question for leaders in other industries is no longer

"Should we adopt a data-driven approach to workforce planning?" but rather "Can we afford not to?"

AGL's journey offers a compelling roadmap for those ready to take the leap into the future of work.

This article is based on information from "AGL Energy is becoming more data-driven with its workforce planning" by Kate Weber, published in Digital Nation on October 2, 2024. Kate Weber attended the Workday Rising conference in Las Vegas as a guest of Workday.