A More Practical Approach to HR Analytics
HR analytics invokes images of big data sets and smart data scientists. There’s a place for that, but it’s difficult to do in any but the most sophisticated of firms. Others narrow their view of analytics to better dashboards and storytelling, but that’s a tightly restricted vision that overlooks 90% of the what analytics could be. There is a more practical approach to HR analytics and it’s found within the existing work your HR team is already doing.
Analytics isn’t a thing, it supports things
It’s only in exceptional cases that HR should “do analytics” as if it were a thing in itself. Most of the time HR should just keep doing what it’s always been doing—but do it better. Doing it better means being clear about the underlying business issue then choosing how to address it based on the best available evidence. Analytics is a tool for gathering evidence. For example, you are revising your onboarding but rather than just going ahead and making some changes you ask where onboarding has the biggest impact on the business, what options exist to improve it, and what evidence exists as to which is the best option.
Don’t we do this already? Sometimes, but not often enough. Too often we take action based on what first comes to mind, what a business leader asks for, what we’ve always done, wishful thinking, or any number of other less-than-analytical approaches.
Analytics is really about using clear thinking and available data for whatever you happen to be working on now. Analytics can be applied to problems in employee scheduling, the design of a new training program, a reorganization of the HR department, or a response to new legislation on data privacy. Almost all HR problems can benefit from the application of some analytics savvy. It’s a methodology for bringing data into HR decisions as a matter of course.
The analytics group can’t possibly address every HR issue, but they don’t have to. Most analytics can be done by the existing HR team. Usually it’s just a matter of going from a world of no data to a world of some data; and you don’t need a PhD to master that. I’m always surprised how numbers-savvy most young HR professionals are today; they just need a little training and support to bring analytics into their day-to-day practice. To start doing analytics, get your HR team to list the problems they are working on; then ask them to bring some data and other forms of evidence to the table to guide how they address those problems.
Analytics savvy can’t be divorced from business savvy or HR transformation
Whenever you start analytics by asking an HR professional about a problem they are working on, you almost always have to step back and say, “What’s the real business issue?”. For example, if the problem is managers complaining about too many open positions, and the HR professional wants to address that, they need to step back and ask how much impact does this really have on the business; is it equally serious for all jobs or are there just a few where it’s critical; is it really a problem at all?
What I’ve discovered over the years is that you can’t separate analytics savvy from business savvy. We often say that what matters most is asking the right question, well the right question always comes from a clear understanding of the business issue.
The other thing I’ve discovered is that as you move down the path to a more business savvy, analytics savvy HR function you are inevitably moving down the path to HR transformation. Companies are used to HR departments that provide services; an business/analytics savvy HR function inevitably becomes more of a partner that drives business performance. Other departments may not be used to this, and it takes some change management to handle resistance.
You will need some kind of analytics team or at least designated analytics-savvy individuals who can champion analytics and provide some support for the HR teams if they get stuck. Next, train and support all your HR professionals in going from a world of no numbers to some numbers; and to go from a focus on the HR problem to the business problem. Finally, the CHRO has to take the lead in changing the business’s perception of HR a bit at a time. It’s hard at first, but once business leaders discover that a business and analytics savvy HR function is actually helping them solve their business problems, then they will be delighted.