Wednesday, February 20, 2013

Going from "I Think" to "I KNOW" with HR Analytics

For the last few days, I have been co-facilitating a workshop with Scott Mondore, PhD and Shane Douthitt, PhD called "Becoming an Effective HR Business Partner Using Metrics."  We had some very smart HR professionals in the room.

As I sit here listening to the last day, it dawned on me that really where HR wants to be is in a position to say I KNOW what drives XYZ, rather than I THINK this is what drives XYZ.  Where XYZ can be employee engagement or regrettable turnover or sales, or profit.

Can you imagine as an HR professional going to line management and saying any of the following:

1) I analyzed your engagement, performance and turnover data and I have identified a group of employees that are at risk for leaving the organization.  And oh, by the way, here are the 3 reasons why they are at risk and here is a game plan to correct those issues.

2) I analyzed your problem with shrinkage in your stores and I know the top 3 employee drivers that impact shrink.  If you do these 3 things it will reduce shrink by X%.

3) I analyzed your competency data and found out that these 3 competencies are driving productivity in your group.  I also looked at the scores of those competencies for your people and 30% of them have a skills gap in one or more competencies.  Let's work on a game plan to close these gaps.

So after the manager picked himself up off the floor, you will be an HR Rockstar in his/her mind.

I know you are asking yourself how can I be an HR Rockstar?

It's all in the metrics and analytics.  You can't hardly get away from the "big data" discussion unless you go to a different planet.  HR has been discussing metrics for years and years...just ask Dr. Jac Fitz-Enz.  It's really time to move away from data/metrics and talk about analytics.  Analytics get you to the "I KNOW" and the "OMG, I DIDN'T KNOW THAT."

What I know for a fact is:

1) You don't have to be a statistician/PhD to get to the analytics listed above in 1-3.  Yes, statistics are used, but if you/your HR department doesn't have that skill, you can find that skill set either internally in the organization or externally with consultants and/or stat students.
2) You DO have to be curious, understand the business you support, and have data accessibility.
3) An analytical/technical focus is a plus!
4) You need the basic data like turnover, performance data, competency scores, training data which is usually tracked in many organizations.

The demand for people analytics is going up on a daily basis.  Now, more than ever CEO's are making decisions based on data.  The time is now...go and be curious.  Find a business problem and solve it with data you already have.


Dale Burks said...

It's odd that HR would be conducting this self-analysis in 2013, but it is true. The data is available, but using it to make critical business decisions is not happening. HR ought to walk proudly through the organization KNOWING it has key insights that impact revenue, beyond CPH, who are our HiPos, and what is cost in moving learning to a vendor. Being able to say: our Des Moines division can launch that product by May 15th, or that training has us X months ahead on the competition, etc will have HR professionals attending their own President's Club.

paraman52 said...

Great piece, Cathy! The important point under the 'analytical focus' bullet is that you have to identify the key performance indicator (KPI) that drives the problem. Your value add is to cut through mounds of data and home in on that/those item(s) which is/are impacting the behavior (i.e., high turnover) and which can be influenced (very important). There may be external factors beyond management's control which impact the problem, and all you can do there is to make them aware of it.

Unknown said...

thanks for the kind words. I couldn't agree with you more. You can't explain all the causes of issues liek engagement or turnover but you can explain a good number of them using regression and other methods that get to causal drivers.

I think it is key to identify this issues as most of the time we guess or we focus on things that really don't matter...

Thanks for reading!

Unknown said...

Absolutely a wonderful post! This is spot on. Being someone who can speak the business's language blows their minds and allows you to really partner and be a full resource to your clients. Not just a problem fixer.
Love it!

Unknown said...

THanks so much Michael and thanks for reading!!!

seethru said...

I couldn't agree more.. While there is little scope for people analytics in India currently, there is a whole lot of potential for organizations to start depending on atleast a combination of thinking and knowing.

In fact I usually do not refer to HR analytics as the latest trend in HR. I call it "the original HR" as analytics is indeed(in principle) going back to basics and depending on scientific observation techniques( like time work study) and inferring decisions from evidence.

Unknown said...

Thanks for reading @seethru. I agree observation techniques do yield evidence, but what I am talking about is measurement of performance, productivity, and impact a firm's human capital has on results. That approach is definitely new for HR as historically we have not measured impact only HR activities.