Keith Rodgers, Co- founder of Webster Buchanan Research, a company
specialising in IT and human capital management research www.websterb.com
Software tools exist to provide organisations with better workforce
intelligence, but HR analytics – and HR’s use of them – still have a long way
When the history of the HR technology industry is finally written, one big
chapter deserves to be reserved for ‘wasted opportunities’. And somewhere near
the very top of the list should be human capital reporting and analysis.
For years, leading enterprise HR software vendors have offered analytical
tools that give organisations better insight into workforce planning and
performance management. And for as many years, large numbers of customers have
steered clear of them.
Part of the blame lies with the software industry itself – after all, if the
applications really were ‘must-haves’, we’d all have them. But some of the
blame must be set at the door of the HR department, as many HR metrics fall
short of what business leaders need. For example, it’s important to know if the
number of voluntary terminations at your organisation increases year-on-year,
and HR will be expected to identify the problem areas, help establish the
causes and draw up a plan to tackle them. But the chief executive might want
this put in a wider business context. For example, how does the increase in
attrition affect productivity? Without this Information, it’s hard to get the interest
of senior executives – and if they’re not interested, HR may as well not
produce the data.
This level of analysis can seem daunting. You can correlate employee data
and model what your workforce will look like on 5 March 2006, but it takes a
lot of effort and, in the meantime, you’ve got day-to-day issues to deal with.
The solution lies in a combination of market maturity and a healthy dose of
realism. First, software vendors are striving to make analytical applications
easier to adopt, so you may be able to meet many of your needs more easily than
you think. Second, you might be able to put your existing reporting capability
to better use – no other department uses its IT systems to its fullest
capacity, so it’s unlikely that HR does so.
Finally, like many IT projects, a step-by-step approach to improving
reporting may help make your analytical projects more manageable.
While it’s good to think big, it’s often more practical to start small.