October 14, 2019
Why Is Everyone Talking About Analytics?
Interest in HR analytics has been steadily rising for the past 10 years, which is no surprise considering how analytics-driven data can be harnessed to help sculpt corporate strategy and impact the bottom line. Would the ability to make data-supported decisions to attract, manage and retain key talent be helpful? How about boosting employee collaboration and maximizing employee productivity? Strategic leaders are increasingly aware that optimizing talent can advance return on investment like no other single internal business factor, which explains the rush to get ahead using the power of analytics. Here, the HR and payroll consultants at Wise Consulting detail the power of HR analytics and how it can help you take your workplace to the next level.
What is HR Analytics, Anyway?
HR analytics, also known as people, talent or workforce analytics, is the process of collecting key data about employees—preferences, pay, performance, churn—to apply statistics, modeling, and analysis of critical factors to identify opportunities and elevate business outcomes. Kate Rodriguez, reporting for The Economist, writes that “Champions of workforce analytics say analyzing data taken from HR systems (e.g., payroll, engagement surveys, talent suites) and business operations reveals insight that helps companies raise the quality of new hires, build high-performing sales teams, predict future staffing needs, implement more effective training solutions and drive up customer satisfaction rates, among other things.” In other words, you can leverage key data from your HR service provider to maximize the efficiency of your workplace, the productivity of your employees, the quality of your onboarding process and so much more!
How can Analytics Improve ROI?
Leveraging data to improve hiring practices, increase retention rates and engagement, identify learning and development opportunities and streamline task automation and processes can directly impact employee happiness. As expressed in an equation: Happy Talent = More Productive Talent. In addition, “Talent matters,” writes Bernard Marr, a contributor to Forbes.com, “and the acquisition and management of talent is often a critical factor in business growth. Competency acquisition analytics is the process of assessing how well or otherwise your business acquires the desired competencies. You need to start by identifying the core competencies your business requires now and in the future. Then assess the current levels of these competencies within your business and identify any gaps. You can then monitor how effective you are at developing these competencies in-house or spotting and recruiting candidates with these competencies.” When analytics are applied to identifying barriers to achieving a business strategy, hiring can become more targeted, skills and pay gaps can be filled, goals can be met more effectively, employees can feel more successful, productivity can increase and value can be added to the bottom line.
How do Metrics-Driven Dashboards and Reports Work?
Most of the data needed to provide this incredible insight into your organization is collected organically through your normal day-to-day HR and payroll operation. Some data may be supplemented by employee surveys or external market data but it is not necessary to get started. Most HCM solutions provide basic analytics and dashboarding capabilities within their solutions. Other add-on systems are focused specifically on digesting core data and rendering pre-developed HCM-specific dashboards with nearly the ease of “a push of a button.”
The metrics collected populate a dashboard customized to display reports and key performance indicators in the form of charts, graphs and other visuals designed to be easily evaluated. Accessibility is important to help users monitor everything at a glance, spotting trends before drilling down into the guts of objectives that are top priority. The process by which a company makes decisions about what to measure and track on the dashboard is important. Too much data dilutes the ability to follow actionable items effectively. “Just because you can monitor dozens of KPIs doesn’t mean you should,” advises Jenna Puckett on TechnologyAdvice.com. “The goal is to monitor metrics which can be linked to a future course of action. Let’s say HR needs to meet aggressive hiring deadlines due to the company’s rapid growth. If all your top-performing employees were found through LinkedIn ads, then should you spend time and money sourcing new candidates at job fairs? Only monitor data from which you can glean insights for decisions.”
What are Companies Measuring?
While we can’t speak for every company out there, and organizations have a wide spectrum of goals and strategic objectives, there are five major categories that are widely examined:
- Employee Churn Analytics (also known as ‘Turnover’)
- Capability Analytics
- Organizational Culture Analytics
- Capacity Analytics
- Leadership Analytics
The amount of data that can be collected and analyzed on a dashboard and the number of reports that can be produced are dizzying. Jenna Puckett provides words of caution; “Remember, a dashboard is a means to an end. Monitoring data alone won’t revolutionize a company; taking action will. If your HR dashboard isn’t driving informed decisions and strategies, then modify it until it does. Continual advantage comes from continual improvement.”
What can go Wrong?
Outcomes forecasting based on analytics is only as sound as the quality of data collected. Absorbing too much data to sift through, or failing to recognize which data is important, can lead to inconclusive or useless reports. Also, like your laundry, data needs to be cleaned periodically. Inaccuracies within a data set can negatively impact your data integrity, which leads us to the next challenge: finding people with the right skill set to gather, manage, report on and clean the data. If you don’t have someone on staff who can do this, it might make sense to hire a consultant who can provide expert data management. Data privacy and compliance is another area to be aware of. Rules and regulations are changing as employee data collection and leveraging social media applications as an HR tool is becoming more common.
Want to Learn More from the Professionals at Wise Consulting?
The power of analytics is solidifying HR’s role as a strategic partner in decision-making and shaping corporate goals. Recognizing the need to provide our clients with a solution, Wise Consulting has partnered with Visier, an industry-leading analytics software provider, to assist clients in setting up personalized dashboards loaded with data to track retention, turnover, diversity, gender equity, organizational trends, performance, compensation and benefits, absences and industry benchmarks–and to do it quickly! If you would like to learn more about the power of analytics, contact our VP of Culture & Innovation, Chris Davies at 443-541-3927 or firstname.lastname@example.org. You can also visit our website today to learn more.