I recently completed a short interview about the challenges, opportunities and future of HR/Workforce Analytics. Hope these points are insightful and/or prompt suitable debate about definitions, approaches, beliefs:
Question: What according to you, is the biggest misunderstanding about HR Analytics?
Answer: Most organizations can misunderstand the purpose of HR Analytics, and think it’s about mapping every single data attribute and being able to fill in every data gap and describe exactly what is happening in their organization to a tee. In reality, organizations use an implicit 80-20 rule to track the most important information, and there is a huge need for directionally correct HR Analytics that are facilitated by staging and combining business, financial and talent data into a common repository. Organizations then can hoard the metrics produced by their HR Analytics, instead of getting them quickly into the organizational “light of day” where the information can be consumed by strong managers who can only manage better with better information.
Question: How do analytics, metrics and benchmarking relate to one another? Can they be viewed as three individual aspects, or are they intrinsically linked?
Answer: Loosely speaking, analytics can be defined as the practice of staging data to a common platform of comparison, studying underlying data and deriving relationships between various data attributes, testing various hypotheses and coming up with conclusions. Metrics or KPIs describes the collection and publishing of agreed upon metrics to measure or score business units, leaders or other organizational structures. Benchmarks refers to comparing to internal or external metrics to gain insight into meaningfulness of your own benchmarks. They are intrinsically links. Analytical studies could yield key metrics that are worthy of measuring organizational performance. External benchmarks or internal comparisons demonstrating relative performance then help guide the consumer of the information to the correct conclusion and actions to address the performance measure.
Question: As HR, do you need to start employing these methods simultaneously, or can you start with any of these three?
Answer: It’s most important to start with HR Analytics. If you start comparing your organization to other organization through benchmarks, you will often be lulled into complacency, but are you comparing to stellar, average or mediocre performance. I’d rather know one important data relationship about what causes a hire to work out or not work out in a company, or what leads to the retention of a high performer or critical role than have a series of red, yellow and green scores. Because I will know that I can easily get the organization to respond to a data relationship, and that we can set relative performance improvement targets. HR Analytics is an important tool set that can help drive continuous improvement through measurement, which is one of the most important drivers of organizational success.
Question: Does it take months or years to get quality HR analytics up and running in an organization?
Answer: Quick wins can be achieved in weeks or even days if it is necessary to build organization support. However, it can take years and a long-term commitment to develop a fully fleshed out program. Remember that people can only digest so much information at a time. By focusing incrementally on quick wins and making recommendations based on data relationships that are easy to implement and easy to measure, an HR Analytics program will flourish. Then it will not seem to be a program that takes a certain time to launch, but rather an important part of managing the business that is a continuous focus. Anyone who claims that there is a instant solution that will serve the long term
Question: Can you imagine a future for HR without analytics?
Answer: HR has little future without analytics or talent management. There is an inexorable trend towards self-service, and HR is a function that is rapidly being reinvented. But the problems of human resources, talent, individual performance and potential – and how people performance drives organizational performance and potential – are among the most challenging organizational resources to solve – and a new generation of HR practitioners is needed to solve these problems. Ninety nine percent of companies find themselves competing for scarce resources from a skill and behavioral basis. HR can steward the right decisions by providing the right analytics – which means that HR Analytics is a core competency of today’s HR function and not a side-endeavor occurring in the organizational basement.