Five tips for starting your people analytics journey
Any business serious about growth needs to embrace analytics. All companies have data – often far more than they realise. With data and analytics tools they can collate and analyse it to increase operational efficiency and inform strategic planning. The pandemic has revealed just how precious a capability this is, especially for the HR function.
Companies that invested in workforce planning analytics platforms were quickly able to build scenarios when the UK government announced its furlough scheme. For example, they had a much clearer view of the impact of furloughing and then un-furloughing specific individuals, even in an enterprise-level organisation with thousands of employees.
By utilising business insights to provide actionable real-time intelligence, data analytics technologies make ‘what-if’ scenarios far easier to create and much more accurate than is possible with spreadsheets alone. They help move HR from a purely administrative role into a strategic driver of business initiatives and decisions.
But where should an HR department start if it wants to embrace analytics? While most managers believe that data analytics, automation and AI are increasingly essential for business survival, they also acknowledge that there is a widespread lack of understanding to underpin it. In the HR space specifically, an MHR Analytics YouGov poll of 500 HR leaders found 44% of respondents do not currently have a main focus on ‘HR analytics’ or technology that uses ‘people data’ to solve organisational issues, even though they consider this to be vital to business operations.
HR specialists have much-valued expertise in people management and regulatory requirements, but are seldom experts in data science. And they may face scepticism over the adoption of analytics unless they can make a good business case.
Here are five tips for HR departments setting out on the journey towards analytics.
1. Form a plan
Identify where processes are slow, or reports are difficult to compile and require detail that takes days to complete. Often, organisations are still relying totally on spreadsheets. These are the areas where analytics will make a transformative difference. Data can be pulled from business systems by analytics platforms, removing the time consuming drudgery. Analytics enables HR to roll out results in a fraction of the time taken by manual methods, bringing a deeper level of insight which is necessary for critical decision-making.
HR must also consider a longer-term plan for more advanced platforms, where analytics automates the measurement of a range of indicators on engagement, providing more up-to-date and accurate insights than the conventional approach using quarterly surveys. With the right technology, HR departments can go one step further and use predictive models for managing retention, flight-risk, payroll fraud, pensions or pay gaps. All have immense strategic value in the boardroom.
2. Start small
Don’t get carried away. A good tactic is to start with a small project. The aim is to show value and results, to get buy-in from a senior leadership data analytics concept.
That initial project could be automation of spreadsheets, building a simple dashboard, or the collation of data for the next board report. It should be sufficient to prove how analytics can transform operations and planning in HR.
The project could, for example, show how the business could save thousands of pounds by reducing absence. Emphasise how with analytics, workforce planning becomes more accurate, identifying costs and ensuring the right people are performing the roles that best optimise their talents for the organisation.
3. Spread the word
The next step is to evangelise across the organisation.
If the initial project makes the right impression, as it almost certainly will, move on to a piece of work that will cut through at the top level. Retention, for example, is always a hot topic, but workforce analytics can make businesses far more likely to keep their employees beyond the two years that is the average period of time in one job.
In a demonstration of how this works, the HR department can gather retention data about people leaving, within its full data set for all current employees. Predictive analytics can be used to create a model of why people left, using variables such as date of last performance review or training course, revealing which contributes most to departures. This in turn enables prediction of which employees are most likely to leave, opening up opportunities for intervention to keep them in the fold.
The same goes for expenses fraud or mistakes – identifying who is overestimating mileage claims, for instance.
4. Face up to ugly data
A quick word about the data. Data can be a problem if a business wants to expand its use of analytics tools. Data may be stored in different formats on a variety of legacy systems, making access and integration difficult. Lack of standards leads to sporadic, “messy data” with data-inputting inaccurate or inconsistent, leaving gaps.
To resolve this, an organisation may have to change the way it processes data, setting new standards and ensuring it is more highly valued. Improving data quality is all about creating an environment where data is treated as the genuine asset it is.
5. Choose the right software
Rather than considering the specific capabilities or latest developments in analytics, focus instead on a provider that will address immediate requirements, can act as a strategic partner and will provide the necessary training.
According to IBM, workforce analytics systems can make companies up to 66% more likely to increase HR performance efficiency – without any extra headcount. As such, it’s clear that an upfront investment in these technologies can pay long-term dividends, both from a financial and an efficiency standpoint. And in these uncertain times, this sort of safeguard is vital for ongoing business confidence.
The future of workplace analytics
In this age of post-pandemic recovery, where digital transformation has been forced into acceleration, HR departments need analytics. From reporting to creating new what-if scenarios and predicting flight-risk, reducing absence and fraud, or showing the impact of restructuring on pensions, data analytics is essential.
Investment in HR analytics technologies can truly help businesses gain a competitive edge – reducing admin, engaging workforces and building for the future.
Laura Timms, pictured below, is HR analytics expert at MHR Analytics
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