Using
analytics in HR to show business impact and predict future performance is the
next trend in our profession. Many organizations want to achieve success using
this approach, but are unsure how to get there. Unfortunately, HR analytics has
gotten off to rough start because it hasn’t been well-defined. True analytics
that drive the business and show a real return-on-investment is about linking
HR data, using cause-effect statistics, to actual business outcomes
We
often hear from organizations that a key challenge in adopting an
analytics-based approach to HR is "getting all of our systems (i.e. HRIS)
in one place so that they can talk to each other.”
Although
system integration is important, it is not the key to successfully implementing
analytics as part of your HR strategy.
Here
are five practical paths that organizations can take to achieve the goal of
creating an HR strategy based on analytics.
·
Big
Analytics Behind-the-Scenes
Data collected at organizations are
typically housed in different places (i.e., on different servers/platforms).
When data are housed in this manner, analytics can be conducted
behind-the-scenes by gathering the relevant data – including business outcome
data - from the disparate platforms. The process is not sexy, but executives
don’t need to know how the sausage gets made.
·
Big
Analytics and Big Integration
The integration of multiple HR platforms
can be a huge undertaking for big companies. Organizations in this position can
put together a comprehensive approach in which the analytics (and impact!)
begin immediately while an IT transition plan is executed in tandem. The key
here is to do the real cause-effect analytics work behind the scenes and expose
the leaders to the outputs of the analytics – make them want more. This is an approach that is quite effective
because getting executives excited about analytics now, but spending multiple
months/years to integrate data will reduce that excitement very quickly.
·
Start
Small—Generate Interest
Many organizations think that they have to
examine all of their HR data at the same time to conduct rigorous analyses and
have a meaningful impact. Not true. Start with one HR process or piece of talent
management data and show how it impacts an important business outcome. A great
one to start with is your employee opinion survey. Using cause-effect
analytics, you can show which specific attitudes have a direct impact on
important business outcomes (e.g. profit, productivity, safety, turnover). Use
this initial analysis to get leaders bought into the process of HR analytics.
·
For
Small Business—Start Strong
Small businesses often have a distinct
advantage when it comes to integrating their HR data and conducting
analytics—they don’t have old legacy technology platforms or vast quantities of
data….yet. Strong analytics can be done within small businesses in much the
same way as in large businesses. The focus is typically on individual
performance, so having a strong performance-based culture and performance
management tools are keys to analytics success.
·
Have
Integration, Need Strong Analytics
It is scary to think that putting all of
this data in one place and paying a company to house it all will actually
increase costs for your organization. Warehousing your HR data in one place is
a good thing, but the critical next step is to pull together the business
outcomes from other functions to show how HR has a cause-effect relationship
with those business outcomes and calculate an ROI.
The
good news is that any of these paths can be taken quickly and effectively, and
all will lead you to being a business partner by showing the impact of HR on
real business outcomes.
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