People Analytics: Making a Strategic Impact Through Data

People Analytics Blog

Over the last few decades, roles within human resources have continued to evolve in the business arena.  Studies show that more and more CEOs expect HR leaders to play a key part in enterprise strategy.  

Shifting the HR focus from transactional to strategic-minded can often be difficult. People analytics can assist with building collaboration through transforming data into business solutions.  

Converting metrics into analytical results can be overwhelming, however understanding the fundamentals will allow you to proactively predict and prevent workforce challenges. It is key to understand the difference between metrics and analytics. It is important to recognize that data does not make decisions, it merely assists in developing an informed conclusion. 

Metrics are real-time data points that can assess a specific process or function. They provide quantitative information. Analytics, on the other hand, uses both quantitative and qualitative data to uncover meaningful connections that can drive solution-minded initiatives. Analytics is a strategic approach to better decision-making. 

There are typically four steps involved in the analytic process. It is imperative to be intentional when building the right insight; understanding the root cause of a problem, identifying the best data to connect-the-dots, and determining how to collectively analyze the information.

1. Organize & Plan 

Understanding the business is a crucial component to people analytics. What promotes organizational success within your organization? What are the core challenges? Who are the people driving success? Having the foundational understanding of organizational performance metrics can then assist with understanding ‘why’ these are significant.   

Once there is a basic organizational comprehension, you can start to look at issue resolution. Common issues today include increased turnover, hiring delays due to talent shortages, and employee burn-out.  Look to discover the root cause of the identified problem. 

There are simple methods that can assist in determining a root cause such as a fishbone diagram and/or The 5 Whys approach.  Once a potential root cause has been determined, create a hypothesis statement. The hypothesis will then become the anchor to the analytic process. A project plan and leader buy-in should center around proving, or disproving, the identified if-then statement.  

2. Capture Data

What data is available today within your organization?  Is there relative industry benchmarking that would be applicable?  What other contributors can you involve in the data collection process? Data should not only reflect human resources metrics. To make a strategic contribution, it is important to look at all facets of the organization, as well as, outside sources for data.  

When collecting information, it is important to consider both qualitative and quantitative measures.  Quantitative data is measurable and objective, making it a common source for insight. Quantitative data is often sourced through systems such as a Human Resource Information System (HRIS), Applicant Tracking System (ATS) or Client Relationship Management System (CRM).  

Often however, quantitative data is not enough to capture the complete picture. Qualitative data can bring an element of greater understanding to an issue.  The data is often collected through employee surveys, focus groups and/or interviews, and is used to identify trends/patterns. Qualitative data can be considered subjective and difficult to interpret at times, however plays a vital role in the analytical process. 

3. Analyze

Look to organize the collected data in a way that will ensure the information is clean and categorized appropriately.  Identify variables within the data. People analytics ultimately attempts to find an affiliation between variables to further prove or disprove a defined hypothesis. For example, turnover and employee engagement may be two variables within the data.  Turnover may increase or decrease based on engagement.  

When analyzing data, there are several factors to consider.  Bias, sample size, data integrity, and data type are all things that can affect data.  You want to ensure the data you are utilizing is accurate and meaningful. Did you get the most out of the data that was collected?  Are the outcomes correct and free of bias?  Confirming the integrity of the analysis is significant when drawing conclusions and proposing recommendations. 

4. Story Tell

The final step in the analytic process is presenting the findings to the appropriate stakeholders. This final step helps provide context and meaning in real time. Create concise, impactful messaging to prevent overburdensome details. Align the recommendations with data findings and business initiatives. Utilize data visualization to show trends and predictions.  Create a call to action, involving any necessary stakeholders in the process.  

People analytics is a method that will require practice and additional learning. Start out with small business needs that may not require robust data analyzation.  Look to gain leader buy-in through increased proactive approaches. Work to collaborate as a strategic contributor for business initiatives throughout the organization.  

Finding strategic solutions by utilizing more than HR metrics can feel taxing. ERC is here to assist! We can be a partner in aligning people management with strategic visions. We specialize in assisting organizations with qualitative data such as engagement surveys, focus groups, and assessments. ERC can be a guiding partner in becoming less reactionary and more visionary.  

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7 Ways to Use HR Metrics

Using HR metrics and data can be a useful strategy to uncover areas of opportunity and improvement, establish yourself or department as a strategic partner, and demonstrate your case when recommending new courses of action or programs. Here are 7 ways to effectively use HR metrics in your organization.

1. Have the right data…at the right time.

It’s important to track information and be able to present data and metrics. You never know when this data will be needed by you or your management team, so track well and often. Any analyst will speak from experience that being prepared with the numbers people are looking for is the key to success. You may not need to calculate or showcase them regularly, but have the information readily available so that you can tabulate the metrics when they need to be presented. Have the right data and the right time, and you’ll be hero in your business.

2. Select the most meaningful metrics.

There are plenty of metrics to consider, but not all of them are created equal. For example, consider turnover, which many HR professionals rely on to tell the whole story of their workplace’s effectiveness. Turnover can be measured in a number of ways – new hire turnover, voluntary turnover, and involuntary turnover, among others; but for some organizations, turnover isn’t a meaningful metric.  Sometimes it’s too non-specific. Additionally, it may not affect the bottom line or business objectives. A good rule of thumb when selecting metrics is to: Track what is valued. Track what is actionable. Track what best tells the story of what’s happening in the workplace.

3. Remember to measure the intangibles.

You may think that many aspects of HR can’t be measured because of all of the intangible aspects of the workplace, such as quality of relationships between employees and their supervisors, engagement or commitment, culture, or even trust in leaders. It’s important to keep in mind that there are many “softer” aspects of the business that can be measured accurately through a variety of means, including observation, surveys, and assessments. Sometimes these “intangibles” can also manifest themselves in objective data.

4. Speak the language of management.

Know what your management values. When presenting metrics data to back your decisions, speak the language of your managers and executives. If their focus is budget impact, industry comparisons, cash flow, sales, and/or revenue, be sure to convey how your data impacts all of these. With managers, specifically, make the information meaningful to their specific segment of the workforce.

5. Keep it simple, but insightful.

It’s rarely about how many numbers you have and how complex they are, but rather the impact of these and the insights you have gleaned from them. Make the information simple to understand and preferably visual, but useful and practical. Complement your numbers with concrete examples and try to always include a comparison – an external or internal benchmark – to help stakeholders understand what the numbers mean.

6. Connect the dots.

Connect the dots by explaining how your numbers and information relate. Explore relationships between data points and current workplace processes and programs (i.e. how a performance management process is linked to improved performance ratings, how training programs are linked to higher product quality, etc.) as managers and executives alike may not see the relationships between these. You must translate these relationships into actionable items, explaining how the data point can be impacted or improved.

7. Don’t assume you need an HRIS.

There’s no question that an HRIS can be a very useful tool for efficiently collecting metrics, but it’s not the only way and plenty of organizations use simple Excel spreadsheets to collect information. Don’t let not having an HRIS or other fancy dashboards and tools stop you from measuring important aspects of your business and workforce that will boost the effectiveness of your HR department.

There are countless HR metrics and data points, but more importantly than collecting these metrics is being able to use them effectively to help advance your career, department, and organization.

Additional Resources

If you’re looking for HR metrics as well as information and examples of HR best practices, check out our NorthCoast 99 Winner Reports, a comprehensive benchmark report that helps you compare your workplace against the top ones in the region and also provides employers with great ideas and information for how to improve their workplaces.

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