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HR Analytics - Is Data Driving Your Decisions

26 Oct 2020
Ewan Anderson

The growth of analytics in every area of business has been exponential. Our lives are run by the data that we provide, and that is held on us, through the digital devices we use.

HR Analytics has become an essential business function for some businesses, whereas, for others, it is still very much a functional tool that provides necessary data on absence or timekeeping.

There are many stages between the elementary, manual assessment of people data, to the machine-learning analysis that takes place in a data centre, and produces business-critical information, that generates millions of pounds of return-on-investment.

So where is your business and what is the next steps?

McKinsey & Company outlined critical steps in what they call, 'The stairway to impact'.

Poor Data

This is when the data is flawed, but there is an impetus from members of the HR function to change. It is one of the most challenging stages. It requires buy-in from several people for a project that almost certainly, not everyone is fully on-board.

There are so many pockets of HR data to align. The goalposts inevitably change as the exploration of the data reveals variations in language, systems and processes that make the interrogation of existing data painful.

Good Data

At this level, you will come face-to-face with the challenge of trust. There will still be anomalies as you interrogate your data, issues with data capture as people start to change mindsets and focus on the accuracy of their information.

It is vital for HR professionals to work closely with their tech teams to acquire the data need, ensuring that the HR analytics align with the business objectives.

Strong Data

There is quite a spectrum at this stage of the process. Businesses will have the capacity to share business-critical information that will shape the decision-making of the company leaders.

However, it is crucial to identify the best way of delivering that information. You may be at an advanced stage where automated reporting provides information for dashboards that are presented at board meetings. Or, your organisation may still be sharing HR analytics at set intervals via spreadsheets in monthly reports.

Some organisations start to think about the messaging at this stage and invest in influencers to manage the awareness-raising amongst decision-makers, smoothing the transition.

Advanced Analytics

Now you have built a strong case for the use of HR analytics, which is providing meaningful insight for business leaders, the more advanced analysis can begin.

This requires the introduction of data-scientists who have extensive knowledge in programming languages. These can be used to build out more complex models and reports that will provide the insight necessary to make strategic business decisions.

At this level, the analysis can require more specialist knowledge. The Tech element of the HR team will now need to grow, with expert insight into the likes of psychometrics.

Data Led Decisions

Some of the analysis may seem like it is a long way off for your business. Perhaps you are a smaller organisation, and the data you might get back doesn't seem statistically beneficial.

Perhaps you know for sure that convincing your leadership of the value of this level of analysis will be a challenge against a backdrop of so many competing demands.

But the biggest challenge in introducing any new approach is showing return on investment. If you can focus in the early stages in mapping out a scope of works that aligns with the business objectives, you will give yourself a solid base to build from and find that return on investment.

Author

Ewan Anderson
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