Masterclass: Fundamentals of HR analytics
“Every problem is really a people problem.”
There is ample evidence to show that most problems are, or at least a part of them are, people problems. Moreover, it is this approach to the world of analytics that can help HR leaders and CHROs utilize next-generational analytical tools. Analytics, driven by numbers, evidence, and proof, when combined with HR, a field so intrinsically human and emotional, can help organizations drive their people policies and manage their workforce using the power of data. HR analytics, when applied to organizations, can help decode data to determine what to do and the best way to go about doing it.
Shift to prescriptive analytics
Over the years, the use of analytics has evolved from static reporting to dynamic decision optimization. Traditional analytics provided us with descriptive and explanatory reports that helped us understand what is happening and why it happened. Today, on the other hand, advanced analytics offer predictive and prescriptive analytics functions that also help us answer questions like ‘what can happen?’ and ‘what should be done?’ This shift has helped organizations come one step closer to realizing the highest value of analytics by increasing the level of analytics modeling sophistication.
Ability to derive value
With an increasing number of ways in which data can be easily gathered, the focus today has shifted from comprehensive data collection to deriving value from it. The key differentiator for organizations is to leverage improved decision-making to generate business value. This requires an alignment of analytics to key business objectives and a burden-of-proof approach to decision-making. Hence, HR analytics is no longer about collecting as much data as possible, but using it to create tangible value by embedding it into decision-making through a closed-loop process from strategy formulation, tactical execution, and performance tracking.
Asking the right questions
With the right focus, HR analytics can provide answers to critical CHRO questions, like, ‘Do we have a good organizational culture?’; ‘Are we able to attract, retain, and develop our best talent?’; ‘Have we organized to achieve maximum productivity and meet our goals?’; ‘Is our workforce ready for future challenges?’; ‘How well are we doing on ROI of people investment?’. Thus, organizations can use HR analytics to determine what they are doing right, what needs to be changed, and what their people value. For example, organizations can measure their employee engagement or rewards much more effectively, as they will have an understanding of what the workforce values, what is the true cost and ROI, and what components of their engagement or rewards package work well.
Reaping business benefits
Obtaining the answers to relevant questions can improve organizational agility, identify the potential for workforce automation, support strategic workforce planning, assist in recruitment-led analytics, and also provide insights on employee value analytics. Furthermore, research suggests that using an analytics approach can help organizations prepare for the future of work by helping them understand their skills demand landscape, compare these demands to external demands, discover similar skills to support skills transition, build a comprehensive understanding of their future workforce opportunities, and undertake succession planning.
Leveraging analytics can help organizations predict and prescribe on people questions of commercial consequence. Thus, HR analytics can deliver critical insights about our people, their preferences, what makes them most effective, and their contribution to business success to plan, hire, develop, engage and retain key talent.
(This article is based on the Masterclass ‘Fundamentals of HR Analytics’ by Japneet Sachdeva, Senior Principal, Accenture, and Sameer Mathur, Senior Principal, Accenture, at TechHR 2019.)