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By Hannah Hager Renowned research institute ScottMadden recently surveyed IQPC’s HR community on the hot topic of HR analytics. The study focused on formal HR analytics functions and how they were supported and organized within organizations. Survey respondents represented a variety of industries including energy and utilities, and retail and customer products, among others. The study captured metrics related to:
• The function’s current maturity level • Analytics‘ current impact on the HR
organization • Organizational location of HR Analytics
within the company • Activities supported by HR Analytics • Number of systems leveraged for data
aggregation • Realized or anticipated benefits of
implementing HR Analytics • Challenges encountered since
implementation
More than half (53 percent) of those who participated have a formal analytics function in place—meaning they have dedicated resources looking at data and analyzing trends. For those that did not, more than 50% planned to implement a formal analytics function within the next year. Why? Respondents claimed a key benefit is the ability to gain better insight to manage the workforce and drive HR strategy. “The most important HR metrics/analytics are those focused on the outcomes created in the human capital value chain,” says Jon Ingham in his Strategic HCM blog. And the analytics a company decides to use, should depend, in part, on the answers that will be most useful to the questions about how HR impacts the business,” he says. The best metrics and analytics for 2015 will most likely focus on 15 certain areas. Analysts agree on many of those areas, but some research show areas of development greater than others. Research conducted by the Corporate Executive Board shows that more than 90% of human resources leaders
The Top 15 HR Metrics & Analytics for 2015
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plan to significantly increase their investment in HR analytics by 2016. This is perhaps due to the advantageous benefits by firms that already use analytics effectively and have achieved 12 percent better outcomes with their talent. Below are the top 15 metrics advocated by Ingham, Gartner, ScottMadden, the CEB, TLNT and more. 1. Creating value in human capital. It’s no surprise that the most successful of organizations will have strategies to engage and motivate employees to not only meet short-term business goals but to ensure they develop talent over the years and further help the business in the long run. The time has past to view strategies as measurements, instead firms must take analytical approaches, Ingham says. In order to create value through engagement, organizations could use a range of demographic or sociographic factors to identify groups of similar individuals who could be engaged in similar ways. Featured Session: Enable Organizational Effectiveness with Data-Drive & Strategically-Aligned Hiring Strategies with Albert R. Quisumbing, SVP of Global HR Programs and Analytics, Edelman 2. HRIS organizational transformation. According to the CEB, the Human Resources Information Technology team should change its role in the business from “demand taking” to “demand shaping.” HRIT teams also must get better at being able to transform HRIT trends and opportunities into tangible business value. 3. The new frontier of Social Capital. Ingham says social capital is often one of the greatest opportunities for organizations to develop new capabilities because the way people work together is more important than the quality of each individual employee. An analysis of social network coupled with engagement activity measurements
will help companies understand which employees are most apt to work together as a community. 4. Look inside at your Predictive Data Don’t immediately jump into outsourcing your big data and predictive analytics needs, says CEB. Harness the talents of your existing team to generate critical talent analytics. CEB says “HRIT teams should also look for analytical skills inside their firm’s finance organization before building or buying these skills.” 5. Leverage quick results. When in doubt, seek out an expert. There are multiple HR analytics vendors that can get you started in just a few days. Outsource what you need to quickly gain a bit of one-upmanship in the market. Featured Session: Maximize the Bottom Line Impact of HR with Mary Rumley, VP of Americas – HR Services, Volvo Group 6. Sources of performance. Organizations should use analytics to better understand the qualities that indicate which employees will perform well in their jobs, according to Ingham. Has a certain employee ever held a leadership position? If so, for how long? What are his or her competencies, tenure, and number of promotions etc.? 7. Talent mobility Teams must become more flexible to respond to individual talent demands coming from different generations, regions, etc. “If talent can’t move inside your company, it will move outside of your company!” said one participant of CEB’s survey.
Featured session: Close the Gap between HR and the Business with Holly Paine Magnuson, Director of HR Analytics and Insights Center of Excellence, The Hershey Company
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8. Reduce your risk. You’ve already invested in your own data resources and understand what you have, but do you know what you “don’t have?” Answering this question will enable you to begin to focus on the data you require to round-out how your company stacks up against your competitors and the market in general, says TLNT. 9. Leadership performance. Companies should analyze the things that make the leaders of an organization effective, Ingham says, and maybe even analyze what effective leadership looks like in the first place. 10. End-user adoption of HR systems. Ever heard of always put your customers first? Likewise, CEB encourages HR teams to always put end-user experience first. “HR solutions should be intuitive to use and easy to integrate into the HR process. End-user adoption of HR systems is the most critical issue for achieving significant return on HRIT investments.”
Featured session: Transform the Operating Model of HR with Michelle Deneau, HR Business Intelligence Leader, Intuit 11. Human capital supply chain. Organizations need to take a cold, hard look at how well they are investing in their employees. According to a Cornell study, many organizations use dashboards to collect and share this engagement information and therefore HR staff should be encouraged to use dashboards as tools to plan for the future, according to Spotfire Tibco. One way companies could use these dashboards is to predict potential problems or monitor how HR practices affect the workforce.
12. Focus and strategy alignment. With all the opportunities to come, CEB says HR executives will need to align HRIT opportunities with
HR and business strategies to gain the maximum value out of the HRIT investments.
Featured session: Enhance Decision-Making Capabilities and Drive Business Growth with Wendy Hirsch, Executive Director of Workforce Analytics, Johnson Controls
13. Move from Nice to Have to Must Have Analytics are no longer a nice to have. Gartner Group released a graphic showing the progression from information collecting to optimization. Essentially, the value of the data increased with its difficulty. First, you start with descriptive analytics – What happened? Then you move to diagnostic analytics – Why did it happen? Before reaching predictive analytics – What will happen? After you’ve achieved all of these things you can rely on prescriptive analytics – How can we make it happen?
14. Don’t invest in a huge Big Data infrastructure. “Your Applicant Tracking System or HRIS should provide you the basic query tools needed to report out and better understand the meaning in your data. If your company is already using an advanced reporting tool like SAP’s Business Objects, then you should pursue using that type of tool as well. It’s imperative, though, that you understand your own data before taking the next step – comparing outside data against your own,” according to TLNT.
15. Learn from role models and mentors. Even if you understand your data, the number of ways it can be analyzed is somewhat daunting. Sometimes the tools are at your fingertips, but your organization lacks the internal analysts or statisticians required to make sense of all this data. Make sure you consult the proper data scientists, hire them and welcome them full force into your team, says TLNT.
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13th HR Metrics & Analytics Summit Join us at the upcoming 13th HR Metrics & Analytics Summit this February 23-25, 2015, in Orlando. There are three ways to register: Visit www.hranalyticsevent.com Call 1-800-882-8684 Email [email protected]
