February 17, 2020

Part 1: What is Analytics and How is it Changing the Future of HR?

Continuous Improvement, HR Analytics, Human Resources
Group of Multiethnic Busy People Working in an Office

Analytics has been a big buzzword in human capital management for a while now. Why should we care about it and how can its power be tapped? In the first installment of our two-part series, “What is Analytics and How is it Changing the Future of HR?”, we take a deeper look at what analytics really means and how it’s transforming the role of HR professionals as well as the employee experience. Eamon Mulholland, Senior Innovation Consultant with Wise Consulting,  took on the challenge of providing an explanation.

How is Analytics Different from Data?

“Five to ten years ago the conversations were all about ‘big data’. People were beginning to capture the data but not really doing much with it. Now the technology has caught up and people’s mind-sets have been evolving to really do something with all this data. What analytics allows you to do is make data-driven decisions. You may think you know where a problem is or where an area of opportunity is, but it’s a lot more powerful when that information can be supported or disproved with factual data.”

Mulholland underscores that HR analytics is not just about automating the data capture and manipulation exercise. It’s also about making data more accessible in order to glean real insights that affect the bottom line. “Most people are accustomed to being stuck in Excel hell where you have all this data that you have to manually manipulate to see the big picture. Data is information, analytics is what people are doing with the data. How are you looking at it to try to evaluate problems and engineer solutions? What you do with the raw data depends on the type of tool and technology you are utilizing. Excel is still a viable method to perform data analysis, but it’s extremely tedious and cumbersome. There is now a lot of technology out there that will take the data and do the analyses behind the scenes to minimize the amount of manual labor and free the end-user to truly dig in and understand the information that you now have greater access to.”

Do Cloud HCM Software Systems Come with Analytics Dashboards Built In?

“A dashboard is a visualization of certain data points. Most Cloud HCM technologies have some sort of analytics dashboards available. They can be simple or complex depending on the technology and the data you are applying to those dashboards. For some organizations, this can be enough for their needs. For others who want more, there are companies that specialize in providing the equivalent of the luxury car model analytics dashboard. Finding out how much and which specific data the people at the top of the food chain want to see in order to drive their organizational goals and decisions can be your guide to knowing what kind of product you need. “If you don’t know the type of data people want, and you’re just providing data, what is the value there? You can say your turnover is high, but the real question is going to be, what are you going to do about it? That’s where analytics comes into play,” says Mulholland.

If your needs exceed what your HCM system provides, take a look to see what new HR technology is available as an adjunct tool. “Companies like Visier take data from your HR software and import it to prepopulate different templates that are customized to evaluate specific data points and metrics including turnover, diversity and inclusion, attendance, and a slew of other things. So instead of exporting data from six different sources or reports and trying to marry those all together by spending hours and hours in Excel, the data is there at just a few clicks.”

What are People Measuring Most with Analytics?

It really depends on organizational need, but there are some things that most people want to make sure they are measuring. Mulholland outlines some areas of universal interest: “When organizations are experiencing challenges with turnover, they want to understand why, and also, what they can do to remedy it. So that is one data point people are always looking at. Increasingly, people are looking at metrics of diversity and inclusion because studies have shown that the more diverse an organization is, the most profitable they are.” You can read an article about the business case for diversity here.

Analytics Seems Overwhelming – Where do I Start?

“The most logical place to start is ensuring you have quality data. Just like with any measurement with data, it’s garbage in, garbage out. When you are looking at it, you can start as big or as small as you want and grow it as you know what your goals are.” Mulholland suggests polling leaders at your workplace to identify the number one metric you want to improve. “Every organization has different goals. If your turnover rate is high and you want to understand why, which age groups and genders are leaving more frequently and which areas of your company they are leaving from at higher rates, start there.”

How do I Know Which Pieces of Data are Valuable?

Often, it’s best to use several pieces of data to cross-check the patterns and behaviors you are seeing. If you use just one point of data, it can actually be deceptive. Mulholland cites an example where a company has observed that people are leaving at a higher rate from one specific business area of the organization. The business area leader says people are leaving because they are being offered more money elsewhere, so the logical fix is to give across-the-board raises in this business area.

Yet, just because the business leader says the answer is giving raises doesn’t mean it is the right solution. They may not fully understand what else is going on within their organization because they have not taken time to gather that data. “This is where HR as strategic business partners can add a lot of value when they have access to multiple data points, evaluate the analytics and make true data-driven decisions. If you go on just one piece of data, you could go ahead and give everyone raises, but that is a huge expense for the company and decreases profitability. Maybe it will fix the problem and maybe it won’t. Through interviews, collecting additional data and analyzing all the info, you may come to find out that money is not the issue. Maybe the business leaders in this area are not supporting staff effectively. Maybe the employees feel there is no growth potential for them, or perhaps they feel overwhelmed with their workload. Or it could be something tied to recruitment such as a large percentage of staff live a long way from the office and the commute has become too much for them.  Where HR business partners can provide true value is by challenging solutions that are presented without having a full understanding of the root problem. This can be greatly helped with data analysis. Ask whatever questions might reveal valuable clues. Without understanding all the pieces of the puzzle, you don’t know if the proposed solution is actually going to solve the problem. Analytics gives you the tools to be a better business partner when you can back up decisions through solid data and ultimately drive the organization toward the strategy most likely to mitigate the problem.”

Continue on Your Path to Mastering HR Analytics

Analytics can be a gold mine for HR business partners—it’s just a matter of knowing what to look for and leverage it to its full capabilities. While you may understand the potential of analytics in HR, you may be wondering how to specifically implement it in your own company. To learn more about your specific role as an HR business partner using analytics, and if it is possible to rely too much on analytics, click here to read Part 2 of “What is Analytics and How is it Changing the HR Game?” To have your questions answered, contact Wise Consulting today.

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