Get Onboard the HR Analytics Movement

It’s common knowledge that an organization’s greatest expense is the people. On average, human capital costs come close to 60 percent of all corporate variable costs. So, managing that cost analytically makes good sense. In fact, 41% of organizations told Brandon Hall Group that the second biggest driver of human capital management (HCM) technology acquisition was to enable better reporting and analytics of HR data.

Source: 2015 Brandon Hall Group HCM Technology Trends Study (n=365)
Source: 2015 Brandon Hall Group HCM Technology Trends Study (n=365)

But when asked how they are executing on the analytics priority, 56% of organizations admitted they do not yet have workforce planning and analytics in place, or if they do, they manage it manually via spreadsheets. This is time-consuming and often creates calculation errors, prompting poor business and talent decisions.

The benefit of analytics is the ability to make predictive fact-based decisions that influence business goals. An analytics strategy starts with using ad hoc metrics and reports to understand “what happened.” For example, how many supervisors attended that new supervisor boot camp?

At the next level of maturity, an organization uses ad hoc metrics and reports, as well as benchmarks and dashboards, to understand “what happened and how we compare to others.”

At the third level of maturity, an organization is beginning to use true analytics – not just metrics — to create correlational people models to understand why something happened and how it can be improved.

And finally, at the most mature stage, organizations are fully leveraging predictive analytics to understand “what is likely to happen and how we can be better prepared.” For example, the probability of just 10% of our supervisors successfully completing boot camp is just 50%. What can we do to improve the completion rate, which will influence talent retention and organizational engagement scores?

Metrics versus Analytics

In describing the business benefit of analytics, a clear distinction exists between metrics and analytics:

  • Metrics are the building blocks to analytics. Metrics are single data points that reveal information about the past and the present often presented in spreadsheet format.
  • Analytics is the computational and statistical analysis of multiple data points that predict answers to compelling business challenges. Here are a few examples of each:
Metrics Analytics
How many employees do we have? What are the best sources from which we can recruit top performing employees?
How many high-potential leaders did we turn over last year? Which high-potentials are considering leaving?
How many mid-level leaders did we hire externally this quarter? How many mid-level leaders can we promote internally next quarter?

Workforce planning and analytics — or evidence-based decision making – is quintessential in spotting potential business issues before they become performance inhibitors. While an analytics strategy won’t guarantee organizational success, it will reduce cost, eliminate lost talent, and improve productivity – all factors essential for a thriving organization.

Moving Forward With Analytics

While the analytics uptake is slow, and organizations are still prioritizing their human capital budget in other people processes (see below), sincere interest is growing, driven by a number of factors:

  • Talent shortages and skills gaps
  • A volatile business climate
  • The changing role of the HR professional from HR leader to business leader
Source: 2015 Brandon Hall Group HCM Technology Trends Study (n=365)
Source: 2015 Brandon Hall Group HCM Technology Trends Study (n=365)

In executing on workforce planning and analytics, the best course of action is to take action and keep it simple. Get started with these five easy steps:

  • Identify 2-3 questions you want answered to inform decisions and actions on your business goals. Examples:
    • Who is at risk of leaving?
    • Are we improving our quality of hire?
    • How many leaders will we need in the new business unit?
  • Use technology to extract existing workforce data relevant to the questions.
  • Answer the questions by analyzing the data and sharing it with key business leaders (CFO, senior business leaders, etc.) to fully understand the implications.
  • Share the answers to the questions with all stakeholders.
  • Define a solution to the challenge that may have been prompted by the answers.

Don’t think of workforce planning and analytics as an annual event shaped by a beginning and end to each of these five steps. It is a continuous process to proactively engage all stakeholders about what may be changing in your business and staying ahead of the decisions and actions that need to be made in response.

Getting started with analytics is the key. Commit to taking small steps and execute. Without execution, you are giving your competition permission to scoop up your customers, your employees, and what was your revenue and profit.

Until next time….

Laci Loew
VP and Principal Analyst, Talent Management
Brandon Hall Group


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