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Business Relevance – Necessary But Not Sufficient

photo of Mark Berry, on HRExaminer.com where he is an Editorial Advisory Board Contributor.

Mark Berry, HRExaminer Editorial Advisory Board Contributor.

Much has been made in the last several years about the importance of business relevance as it relates to workforce analytics. That makes sense. Proponents of the “business relevance” perspective as it relates to HR analytics argue that the most critical factor in any workforce analytics initiative is the degree to which the work is relevant, as in, applicable and impactful to the business in terms of outcomes, as in improved effectiveness or efficiency.

By relevance, most practitioners, authors, and speakers on this subject are focused on the ability to connect HR analytics efforts to key business outcomes, such as productivity, quality, or other key performance metrics. It’s a noble effort, intending to better aim the work of the HR analyst from generating insights that will be of value only to human resources professionals to those insights that will be relevant to business leaders. In this context, relevance is about impact and proponents of this approach to analytics argue that workforce analytics can have the most significant impact when they answer key business questions, issues, or challenges. Proponents argue that in order for workforce analytics to truly be relevant they need business leaders who will respond to analytics initiatives with a hearty, “Wow, that is important. I need to act on this,” versus a tepid “Well, that’s interesting” (or “cool” or “fascinating”), but fail to be inspired to act on the findings presented.

Business Receptivity – An Often Missing Ingredient

Although I applaud the efforts of those who seek to align or connect the work of HR analytics practitioners to solve for or answer pressing business issues, I believe there is another equal or more important question to raise when considering whether to engage in workforce analytics: business receptivity.” In my world, workforce analytics must not only be relevant to business leaders, but we also need business leaders who will be likely to act – or receptive – to the findings derived from an analytics project. Let me provide a few examples:

Example A: Identifying the Causes of High Turnover in Key Job Groups

In this case, the business leader has indicated that they want to understand what is causing high turnover in a key job group. The analytics team undertakes the work to quantify the level of turnover, the causes of turnover, and what must be done to reduce turnover. In one actual case, the key causal factor in high turnover was pay. More specifically, it wasn’t that employees were not paid competitively, it was that employees didn’t understand the company’s pay processes and practices. It was not an issue of pay equity; it was an issue of pay transparency. When the findings are presented to the business leader, the leader refused to approve moving forward with the required intervention – making the company’s pay practices more transparent to employees. For whatever reason, they were not comfortable doing what was required to improve employee retention. The issue was not business relevance, but rather business receptivity. The business leader understood what had been found, but refused to take the requisite actions to address the issue. As a result, the findings derived from the analytics team were interesting but not actionable.

Example B: Pay Inequity for Female Employees

In this example, the business leader, acknowledging the importance of attracting and retaining high performing female employees, agreed to sponsor a project by the workforce analytics team to evaluate pay equity between male and female employees in a specific, revenue-generating role within the organization. By all estimations, the question to be addressed – “Are female employees paid comparably to their male employees in this role for comparable performance?” – was relevant to the business leader. After all, the business leader sponsored the project. However, when the analytics team presented their findings (that there was – in fact – pay inequality and in order to improve retention of female talent, steps would need to be taken to eliminate this disparity), the business leader refused to take action and address the disparity. In simple terms, the project met the standard of business relevance but did not meet the standard of business receptivity.

In both examples provided, the initiatives addressed by the workforce analytics team were highly relevant to the business. Addressing these issues would help to retain talent critical to the success of the respective business. However, relevance didn’t translate into receptivity and in the end the findings of the analytics teams were never implemented. What was missed? The analytics leaders failed by not helping business leaders understand in advance of beginning the analysis what the findings could be, the implications of these findings on business (and human resource) practices, and being prepared to take the requisite actions based on the findings of the analysis.

How to Improve Business Receptivity

What can be done to avoid issues of business receptivity (or specifically a lack thereof)? I’ve found three things can help improve analytics leaders’ ability to realize true business relevance and impact from their work. They are:

  1. Ensure that business leaders, in many cases, the true “stakeholders,” are engaged in the analytics project being undertaken from the beginning. It’s lunacy to expect a leader to act on findings from a project in which they were not engaged until the work was completed.
  2. Educate business leaders about the potential outcomes of the analysis to be undertaken. Smart analytics leaders will identify potential outcomes and be able to illustrate for business leaders what may be required to remediate the most likely outcomes.
  3. Only undertake work where business leaders have committed explicitly to addressing whatever is found through the analysis process. This isn’t a hard commitment, but rather an effort to further engage business leaders to not only seek to understand the outcomes of an analytics initiative but also to act on the basis of those outcomes.

To the degree HR leaders in both workforce analytics and CHROs seek to promote both business relevance and receptivity, HR analytics will deliver business-impacting results and elevate their respective status within the organization.

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