What steps should HR be taking to make high-impact use of people analytics? Michael Carty found out at the Tucana People Analytics conference in London.
“We are on the cusp of something with HR analytics,” was the claim made by HR consultant Steven Toft, speaking at April’s conference in Westminster, London. But he added a note of caution: “There is a lot of aspiration around HR analytics. But HR seems to be stuck in neutral.”
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The issue, according to Richard Doherty, senior marketing director at software company Workday, is that while analytics can help HR drive change, boost workforce engagement and enable strategic decision making, HR must think about who the end use of this data will be.
“HR needs to look outwards at how it can use people data and analytics to help the business grow,” he said.
“All employees need access to your people information to make better decisions. We need to open up the richness of people analytics and make it as accessible and digestible as possible.”
Three key themes emerged on how HR can take ownership of people analytics and use data to build strategic influence, which we explore below.
Use HR data to solve business problems now
To achieve full value from people analytics “HR needs to be able to use data to find the business problem and solve it,” says Luk Smeyers, chief executive at iNostix. “HR needs to be capable of bridging difficulties with other functions and breaking down data silos.”
Helen Gowler, global HR leader at Avon, did just this, launching a successful two-year project for her HR team to harness the full potential of people data. Previously, the people data for Avon’s operations across 60 countries was stored in disparate legacy systems with no common definitions of data and no standard approach to updating.
“This was diluting HR’s impact,” says Gowler. “We weren’t comparing apples with apples.” Gowler decided to up the ante for HR at Avon by putting people data front and centre.
In 2014, she began an ambitious project to standardise people data across Avon’s global business and create “a global source of truth for human capital management”. Gowler set global standards and definitions for key people metrics such as headcount, turnover and long-term absence.
She then introduced people data dashboards with a friendly user interface. These give local HR and line managers immediate access to the people data they need for their day-to-day work, including data on absence and paid leave taken, and monthly turnover and termination rates.
“Our dashboards make data available immediately, with charts and Excel downloads,” she says. “They are designed to be quick, simple and accessible. The dashboards are all about answering the question: ‘What exactly is it you need right now?’
Managers just have to switch on their laptop, push a button, and there it is.”
As a result of this project, people data is more visible, and the business is more reliant on it, she adds.
Toft applied similar core principles in his work with car retail technology provider CDK Global to integrate people data fully into the organisation’s business strategy. Two key questions guided this project, he says: “What does the business need? What data do we have right now?”
Learn the language of data
HR needs to learn and become confident in the language of data to make effective use of analytics, says Toft. He believes that modern HR departments require “people who can understand the business, who get HR and can do data”.
People data and how to use it
But the hard truth is that many HR departments do not currently possess all the skills required to meet this challenge, argues Smeyers.
“HR must change the mix of its department and its priorities, or it will never evolve,” he says. This might involve looking beyond traditional talent pools when resourcing the HR team. “For example, when you’re hiring HR business partners, look at ex-consultants, people who can present business cases cross-functionally and with a lot of data.”
Another option is to upskill the current HR department in people analytics skills. Gowler cites the example of one member of Avon’s HR department who two years ago “wouldn’t have opened an Excel spreadsheet. It just wasn’t her”.
All members of Avon’s UK HR department were provided with training in data skills and numeracy, and encouraged to take a positive view on incorporating people data insights into their work. “We went from being an old-style HR function to becoming data enablers,” says Gowler.
Her previously data-shy colleague, for example, has become a confident and enthusiastic data user, making a strong contribution to the success of Avon’s people analytics activities.
Balance people analytics with “traditional” HR insights
The most effective uses of people analytics are those that balance the ability to derive insights from data with the people management insights that are unique to HR, argues Toft.
“Don’t lose sight of what it is to be an HR person,” he says. “HR has always been good at storytelling. HR just needs to apply these storytelling skills to data.”
This is particularly relevant to reporting data insights. “The biggest challenge in HR analytics is reporting,” says Doherty. “HR analytics reporting must be integrated into the business strategy. It needs to have a good narrative, and to be targeted and transparent.”
Kevin Ball, HR vice president at IT solutions provider CDK Global, agrees. “HR has been deficient over the years in contributing hard numbers to the organisation. We need to find a way to make our intuitive decisions more data-based and our data-based decisions more intuitive.”
CDK Global achieved this by integrating its HR data with people data held by other departments. HR worked with finance to create an agreed set of people metrics, cutting the 2,000 people data points used across the global business to 120 people metrics for use in business reports.
But as they get to grips with the insights and stories offered by data analytics, HR professionals must also be willing and able to challenge that data, argues Tim Ringo, vice president at HR software provider SAP.
“HR shouldn’t just blindly trust the people analytics algorithm,” he concludes. “You have to have a sceptical HR team.”
This could make the difference between being on the cusp of something great, and making real progress.