On the journey to HR analytics, knowing where to start is half the battle. Does it start with a well thought out strategy or do you jump in and begin with ad hoc problem solving? There is no right or wrong place to start but this lack of clarity has many HR teams frozen in place waiting for something to kick them out of neutral.
Hats off to the top 20% of companies who have invested in analytics tools and have well thought out strategies focused on solving business questions. But this article isn’t for you. Every day I hear HR people talking about workforce problems but they still don’t have the knowledge or tools to measure and manage the issue. These are the companies who most need help just getting on the road to analytics.
Strategy or measurement
Let me tell you about a large diversified retail organisation. A few months back, I met their CHRO and asked if they were doing analytics yet. ‘We’ve decided to wait until we have a robust and comprehensive analytics strategy in place first’. Yes, best practice tells us to figure out why and how you need to use analytics so that it can address business problems. I understand the logic. However, just this week, I was at a networking group where a mid-level member of the same company’s HR team was addressing a real issue.
The recruitment of retail store staff is done solely by store managers. The extremely lean HR team does not have the capability to train each manager on recruitment best practices or coach them on good interview techniques. Despite managers having access to the right recruitment tools, they don’t see the value in the structured approach to interviewing so they default to their own interview style. The result is a mixed bag of employees.
There is business problem here that needs to be addressed. Hiring the right candidate impacts customer experience, store profitability, morale and turnover not to mention the manager’s time required to re-hire positions as employees come and go with the regularity of a turnstile. Do you wait for the analytics strategy or do you just start with metrics to measure your current state and give managers feedback to encourage change?
A simple slice of data can go far. Imagine if the HR team was able to produce turnover stats by store or division and compare them to a store average or an internal best practice. This is the kind of information that gets the attention of the executive. Targeted, measurable, key performance indicators that can be part of a larger dashboard on manager and store performance. This is the kind of data that shifts the responsibility from HR, who are trying to push good recruitment practices, back to the manager who knows he will be measured on the retention rate of his team. It changes the mental ownership of the process and HR moves from task master to skills coach.
In the hype around analytics and being predictive, there are still so many companies who have yet to embrace the power of historic, descriptive metrics as the first step on the journey. Metrics are a key foundation to analytic interpretation and insight. Learning to recognize opportunities where HR data can add value and address business needs is the first step in embracing evidence based decision making.
Selling your executive team on the opportunity presented by implementing an HR analytics strategy is easier when you can leverage successful data insights. Time to shift out of neutral, tackle smaller targeted business issues and get a few wins under your belt as you work on the longer term strategy.