The Power of HR Analytics

Why HR Analytics?

The power of analytics drives informed decisions, and that’s especially true in human resources. Data bring credibility to strategic decisions, link HR initiatives to organizational performance, and help forecast business needs to maintain a competitive advantage.

Traditionally, HR has been considered as a cost center. I believe in measuring human resources and in developing and executing HR programs that can deliver a positive return on investment. Such measures require a cross-functional approach so that they contribute meaningfully to business objectives.

HR metrics involves collecting data from project initiation through to completion as the first step in acquiring business intelligence. The process of collating and analyzing this data lays the foundation for HR Analytics.

In this series, I will focus on different analytical paradigms that come together in a toolset enabling organizational efficiency. The concepts weave through the structural framework as per the following six categories, and can be applied to bring any project to fruition-

Significance of HR Analytics Development of Business Case Building HR Shared Services Scorecard Configuring Dashboard Analytics Implementation of Six Sigma methodologies in HR A Case Study based illustration HR Analytics can serve as the cornerstone of measuring and sustaining organizational success, to address both immediate needs as well as longer-term strategies.

To paraphrase Sir William Osler, "driving HR without metrics is like sailing on uncharted seas, whereas gathering business intelligence to make decisions without analytics is like not going to the sea at all."

The Essentials All of us are awash in data. However, when you’re in command of the various data streams through HR analytics, you’re more likely to be swimming in a sea of actionable insights instead of drowning in disparate information. HR analytics help us make informed decisions based on evidence that is collected and analyzed according to business priorities, and producing tangible outcomes for stakeholders (see image below, click to enlarge). Ironically, the core concept of HR analytics is not limited to data analysis but involves taking a deep dive into the metrics to let the data morph into a cogent story that generates HR intelligence. We, as HR professionals, constantly struggle to effectively forecast the trends and predict the future. We need reliable and accurate data to develop effective models that guide business strategy and decisions. HR analytics is the process of developing such evidence-based models. In this sense, it is the health-meter of an entity, measuring its performance and well-being, and driving transformation to prepare for future challenges.

All HR professionals and business leaders should be at least conversational, if not fluent, in the essentials of HR analytics; and be familiar with various dimensions of data collection, measurement, and assessment of metrics. These include variables such as productivity, time, cost, dollar savings etc., which are mapped against indices of efficiency and effectiveness. This, in turn, drives innovation and learning, laying the foundation of a lean and nimble organization well equipped to handle the challenges of a rapidly transforming economy.

To tell a compelling story through data and HR analytics, you need to consider a few essential elements:

Entrain top management support – Leaders should embrace the culture of analytics and empower employees to utilize and interpret this information into initiatives aligned with the business goals. Use technology to ensure the integrity of data – Data pertaining to HR should be funneled through a common node to ensure that it is accurate, reproducible and comprehensive while maintaining efficiency in the process. Such a well- integrated and scalable HRIS system can be queried as a robust reporting tool. Generate a knowledge base – Employees should be equipped with knowledge and resources on HR analytics. A professional training course or on-the-job experience will help HR Business Partners to understand the scope and requirements of the business. The focus should be on predictive modeling, to monitor future uncertainties. Perhaps analytics should be a mandatory course in HR specialization so that we sow the seeds for a future generation of metrics-savvy HR graduates. Paint a picture – Understand the nuances of the data up close, and then get a 20,000 feet view to see the complete picture. Your ability to communicate these elements of the data to leadership can infuse a new outlook based on HR analytics, and enable desired outcomes for the organization. It’s the Future HR Analytics is here to stay and will lead an exponential change in planning and decision-making. It will require a shift in attitude and expertise that will support a continued evolution to gain a competitive advantage. Staying afloat is not enough anymore. Being agile enough to leverage HR analytics to lead your organization through uncharted waters is the new definition of "sink or swim."

Note: Anupam will be writing a regular column for SSON online. Look out for her next piece in October.

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