graphic for The 2019 Index of Intelligent Technology in HR Tech

 

By understanding the business you are in and the challenges the business face, HR can truly have influence and impact on the organization by analyzing the right data and telling a great data story.

By understanding the business you are in and the challenges the business face, HR can truly have influence and impact on the organization by analyzing the right data and telling a great data story.

HR is the owner of a ton of transactional data. We have reams of data on recruiting like candidate sources, knowledge, skills and abilities.  We have a treasure trove of data in our performance management systems on things like competencies and average employee performance scores.  Not to mention the engagement and turnover data that is just lying around just waiting to be analyzed and used for great decision-making.

I just read an article in this month’s HR Magazine that state that HR’s big data is here to stay.  The issue is not that HR has big data, it’s that HR has been scared to death of data for decades.  For the non-analytical HR person it can be a little overwhelming.  However, as my colleague Dr. Scott Mondore, Partner, Strategic Management Decisions, states, “You don’t have to be a PhD in order to GET HR analytics, you just have to be a good consumer of data.”  In other words, there are many data analyst inside and outside the organization that can do all the geeky magical stuff with the data.  HR just needs to understand what drives outcomes for their business and be able to tell a great data story.

According to Josh Bersin, currently with Deloitte, there are is a hierarchy when it comes to HR data:

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If you ask where most companies are in the hierarchy to the right, the majority state they are still at the operational reporting level,  tracking transactional metrics like cost per hire and time to fill.  According to Bersin, only about 14% of the companies surveyed in a study on HR Analytics were at level three and four where all the organizational insights take place.

The big question becomes how to you move from time to fill to strategically linked metrics?

There are many ways to do this, but the easiest way is to solve a business issue using data that you already have.  Take a metric like turnover.  We use it in a very transactional manner currently.  HR reports monthly, quarterly and yearly turnover rates.  What the business really needs to know is who is leaving?  Is it good or bad turnover?  Why are they leaving? How much is this costing the business?

Think about this, what if HR analyzed turnover by performance scores and engagement scores and found out that the highest turnover (17%) was coming from those that are the most engaged and those performing at the highest rates.  Upon further examination, analysis revealed that the high performers were dissatisfied with the lack of career development and growth opportunities within the organization.  By analyzing the turnover cost data, HR was able to determine that each high performer that leaves the organization was costing the company $38,000 in HARD costs.

Using this data you can be “predictive” about your high performers leaving.  Wouldn’t you business leaders want to know if your high performers are at risk for leaving the organization?   Now, that’s a level four example of how you can use data to be strategic and discover something the company leaders didn’t necessarily know.

To continue the example, it would make sense for HR to create a career development program and/or a succession plan for high performers.  You could even calculate an ROI for these programs by tracking turnover due to dissatisfaction with growth.  By assigning a dollar value to the turnover decrease, HR no longer is viewed as tracking activity but adding to the bottom line in a real way.

The demand for HR analytics is higher than its ever been.  HR professionals have a huge opportunity with the data that they already have in their own databases and HRIS systems.  By understanding the business you are in and the challenges the business face, HR can truly have influence and impact on the organization by analyzing the right data and telling a great data story.

graphic for The 2019 Index of Intelligent Technology in HR


 
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