Posted on: 30 June 2015
How to build your confidence in HR analytics
HR Reward | Reward Consultancy | Reward Intelligence | Reward Strategy |
Is HR relevant to your business? The answer is of course yes. If you don’t believe HR can have a positive, strategic impact on your business through helping it get the most out of its most important (and expensive) asset, then you may as well as go home and start looking for a new role. But do you regularly demonstrate that relevance to the business?
Think about other functions in your organisation. What does Finance do? How does it work? My guess is that it is fairly well-regarded. They are the people to go to understand the money, costs, revenue, and sales success or failure. They have a place at the top table, a solid reputation, credibility and independence.
What would you think if Marketing ran a promotional campaign and the Marketing Director couldn’t back up its success with measurable outputs, but reported that he had ‘heard good things’ anecdotally? They are using solid data with a link to the business to show the relevance of what they do.
How do you establish credibility?
So what can we learn from that in HR? Can we develop a strength in creating an architecture around people in the same way? Does it count to our detriment when there isn’t an easy answer to our fundamental question; “how are our people performing and how can we make that better?”
HR analytics purports to be that answer. Not only can it gather descriptive analytics, rear-view mirror stuff, but also shows us how we can predict the future through predictive analytics. The view is that HR analytics might work for huge firms with a massive data set – the Googles of this world, but most of us work in smaller organisations without access to ‘big data’ or in the public sector whose track record on data management is poor and un-integrated.
Ask yourself; what would be different for you if you could reliably track and report on key bits of People data?
Every journey starts with a single step
Developing HR analytics takes time, so the key message is always stay calm, start small, be patient, and build over time.
If you’re doing nothing at the moment and/or aren’t too confident working with data, it’s counterproductive to suddenly try and tackle everything. There are potentially hundreds of things you could look at, but trying to do everything will leave you overwhelmed with too much information, losing focus, and letting analytics fall by the wayside as too hard. Instead start looking at only a few measures. You can add others over time as you build your confidence and get to know your data.
The 'golden rules' of HR analytics
As you build your HR analytics capability there are four ‘golden rules’ you need to bear in mind if you are to be successful:
1. Interpret your data
Analytics is the interpretation of data to generate insight. Your data is not analytics, your HR system is not analytics, and your reports are not analytics. These are only tools to allow you to look for trends in your data, ask questions to understand the drivers for those trends, and find how it impacts on the business.
2. Link to the business
Analytics should always be linked to the business. Every organisation fundamentally wants to know four things: where is our money coming in from (revenue), where are we spending our money (cost), how we can we best deliver our product/service (business plan), and what are the obstacles to doing this (critical problems).
If you want to show relevance to the business and build your credibility, then any insight you share from your data has to be linked to one of these four things. This can be done by identifying a specific current business problem or goal and finding how you can provide insight and support from HR’s perspective, or by simply putting a £ value on your numbers. If you talk about reducing average sickness by a day per employee, you get blank looks, but if you can talk about saving the business £100,000 you are linking your work to the bottom line and showing why the Exec team should care.
3. Embrace the power of beta
Everyone has bad data – even Google, the ‘kings’ of HR analytics. The majority of companies acting upon their data are fighting a never-ending battle to improve and maintain its quality. But, your data doesn’t have to be 100% or even 80% complete to be useful. It’s easy to get bogged down in improving your data quality or refining the output but don’t be put off actually delivering an output to the business.
‘Beta’ is a product development term referring to the stage where you share your product with a wider audience to get real life feedback and find all the bugs and kinks before your official launch. Use this ‘work in progress’ tag to take your work out to the business and ask for feedback. If you admit it’s being worked on and invite managers’ collaboration to help improve it, you create a positive working relationship from the start.
4. Be transparent and open
HR analytics sits in HR, but should not stay there; transparency and best practice HR analytics go hand in hand. Open communication of analytics is what will help it thrive and succeed; your long-term goal should be to create a culture of collaboration and interpretation of data between HR and the business. My experience is that this can take years so be patient, but if HR analytics stays strictly guarded inside the HR silo, then it will die there.
Your next steps
- Take charge: have a central person or small team who ‘own’ HR analytics
- Start slow: keep it simple to build confidence and avoid overload
- Find your business problem: solving a business problem gains you credibility and typically at least one supporter on the Exec
For help and advice with your HR analytics please get in touch 020 3457 0894.