Companies serious about growth need to embrace analytics, especially in the HR function. Collating and analysing the masses of data that most organisations have will increase operational efficiency and drive strategic planning. The pandemic has revealed just how effective a capability this is, especially for the HR function.
Businesses that had workforce planning analytics platforms were quickly able to build scenarios when the UK government announced its furlough scheme, for example. They had a much clearer view of the impact of furloughing and un-furloughing specific employees, even in an enterprise with a distributed workforce of thousands.
By employing business insights to provide actionable real-time intelligence, data analytics technologies make ‘what-if’ scenarios far easier to create and much more accurate than is possible with spreadsheets alone. They help move HR from a purely administrative role into a strategic driver of business initiatives and decisions.
Where, however, should an HR department start if it wants to embrace analytics? While most managements believe data analytics, automation and AI will become essential for business survival, they also acknowledge that there is a widespread lack of understanding to underpin it. An MHR Analytics YouGov poll of 500 HR leaders found 44 per cent of respondents do not currently have a main focus on ‘HR analytics’, or technology that uses ‘people data’ to solve organisational issues, even though they consider this to be vital to business operations.
HR specialists have much-valued expertise in people management and regulatory requirements, but are unlikely to be experts in data science. Unless they can make a good business case for investment in analytics, they may make little headway.
Here are five tips for HR departments embarking on the journey towards analytics.
- Draft a plan
Identify where processes are slow, or reports are difficult to compile and require detail that takes days to complete. Often, organisations are still relying totally on spreadsheets. These are the areas where analytics will make a transformative difference. Data can be pulled from business systems by analytics platforms, removing time-consuming drudgery. Analytics enables HR to roll out results in a fraction of the time taken by manual methods, bringing a deeper level of insight which is necessary for critical decision-making.
HR must also consider a longer-term plan for more advanced platforms, where analytics automates the measurement of a range of indicators on engagement, providing more up-to-date and accurate insights than the conventional approach using quarterly surveys. With the right technology, HR departments can go one step further and use predictive models for managing retention, flight-risk, payroll fraud, pensions or pay gaps. All have immense strategic value in the boardroom.
- Begin on a small scale
HR specialists need to start with a small project. The aim is to show value and results, and obtain buy-in from senior leadership for data analytics.
That initial project could be automation of spreadsheets, building a simple dashboard, or the collation of data for the next board report. It should be of sufficient scale to prove how analytics can transform operations and planning in HR.
The project could, for example, show how the business could save thousands of pounds by reducing absence. Emphasise how with analytics, workforce planning becomes more accurate, identifying costs and ensuring the right people are performing the roles that best optimise their talents for the organisation.
- Spread the news
The next step is to spread the good news across the organisation.
Once the initial project has made the right impression, move on to a piece of work that will cut through at the top level, such as retention. Explain how workforce analytics can make businesses far more likely to keep their employees beyond the two years that is the average period of time in one job.
In a demonstration of how this works, the HR department can gather retention information about people leaving, within its full data set for all current employees. Predictive analytics can be used to create a model of why people left, using variables such as date of last performance review or training course, revealing which contributes most to departures. This in turn enables prediction of which employees are most likely to leave, opening up opportunities for intervention to keep them inside the company.
The same approach works with expenses fraud or mistakes – identifying who is overestimating mileage claims, for instance.
- Face up to problems with data
A quick word about the data. Data can be a problem if a business wants to expand its use of analytics tools. Data may be stored in different formats on a variety of legacy systems, making access and integration difficult. Lack of standards leads to sporadic, “messy data” with data-inputting inaccurate or inconsistent, leaving gaps.
To resolve this, an organisation may have to change the way it processes data, setting new standards and ensuring it is more highly valued. Improving data quality is all about creating an environment where data is treated as the genuine asset it is.
- Take care to select the right software
Rather than considering the specific capabilities or latest developments in analytics, focus instead on a provider that will address immediate requirements, can act as a strategic partner and will provide the necessary training.
According to IBM, workforce analytics systems can make companies up to 66 per cent more likely to increase HR performance efficiency – without any extra headcount. As such, it’s clear that an upfront investment in these technologies can pay long-term dividends, both from a financial and an efficiency standpoint. In these uncertain times, this sort of safeguard is vital for ongoing business confidence.
The future of workplace analytics
As we go forward into a period of post-pandemic recovery, where digital transformation has been accelerated, HR departments need analytics. From reporting, to creating new what-if scenarios and predicting flight-risk, reducing absence and fraud, or showing the impact of restructuring on pensions, data analytics is essential.
Investment in HR analytics technologies will hone a new competitive edge for any business by delivering greater agility, reducing the admin burden, engaging the workforce and building more effective strategies.
Laura Timms is HR analytics expert at MHR Analytics, providers of Data, Analytics & AI solutions that help organisations make sense of disparate data, generate insights and empower them to make intelligent decisions.