Workforce analytics is changing the way talent management leaders recruit, engage, and maximize the productivity of their employees. It offers unbounded potential to correlate HR investment with business results. To achieve these results, HR organizations manage human capital assets to generate four principal outcomes: generating revenue, minimizing expenses, mitigating risks, and executing strategic plans.
Workforce metrics, such as termination rates, offered in isolation of other data sets have a limited effect on these outcomes and are consequently of limited interest to the C-suite. However, every HR executive wants to know: “Did the money we spent on Talent Initiative X deliver the intended business results?”
To answer such questions, HR organizations must have well-organized workforce analytics programs or centers of excellence, and run efficiently. HR leaders must make a number of important decisions regarding governance, organizational structure, and data access, and acquire capabilities for designing, executing, and communicating analytics investigations.
When all this is done, workforce analytics can deliver its defining value by showing that it’s not just about big data, it’s about relevant data.
Core Competencies for Analytics Professionals
A commitment to workforce analytics requires that the staff running the program or center of excellence have certain core competencies. The following four skills are especially crucial to a successful analytics practice:
1. Proficiency in quantitative techniques: The ability to understand and apply data would seem obvious, given that numbers are the foundation of workforce analytics. However, statistical knowledge will vary by HR role — data analysts might be expected to possess greater skill in pure number crunching, whereas HR business partners should understand how data is managed in systems and how common metrics are defined via formulas.
2. Business acumen: Workforce analytics derives much of its value from applying analytics to business issues. This can mean identifying which metrics align most closely with business unit goals or calculating the financial impact of a human capital initiative. Familiarity with the organization’s strategic plan, growth strategies, and risks increases the likelihood that analytics deliverables mesh with business priorities and prove the value of quantitative analysis.
3. Consulting skills: Modern HR transformations involve a commitment to becoming a better business partner. HR professionals need to possess internal consulting skills to facilitate stronger two-way conversations with line managers, hypothesize the root causes of current business problems, leverage workforce analytics data to design suitable interventions, and measure the results of those interventions.
4. Communication skills: Applying data to business problems means little if the data cannot be positioned effectively for executive consumption and action. Incorporating visualization and narrative techniques such as infographics and storytelling increases the likelihood that analytics-driven messages will be received loud and clear.
Supplementing these skills are several personal attributes that are important for analytics staff, particularly those embarking upon workforce analytics in a culture unaccustomed to HR’s commitment to data-driven analysis. Let’s look at these in more detail:
- Natural curiosity: It is difficult to improve the way HR professionals use data if they lack a natural curiosity for investigating and solving human capital and business issues. In working with their teams, HR leaders should give careful consideration to which staff members possess the greatest interest in analytics, and position those individuals as “data champions” who can engage their colleagues and drive action.
- Dynamic problem solving: Delivering workforce data to a potentially skeptical audience is a daunting task. The ability to preempt difficult questions, manage audience assumptions that contradict the findings, and handle skepticism about data credibility will inspire confidence — something especially important for employees who are just getting started with workforce analytics.
- Experience: There is certainly no substitute for experience with data-driven decision making. HR professionals with longstanding analytics capabilities are better equipped to navigate the corporate landscape, especially when dealing with internal politics or resistance to analytics, and are more likely to be seen as credible when presenting data.
Data Scientists in the HR Function
Several SuccessFactors customers have built analytics centers of excellence around em-ployees who possess PhDs in industrial and organizational psychology. Moving forward, an even more specialized group of experts — data scientists — will become a staple of those HR functions that buy into the notion of an evidence-based organization, in which data is readily accepted and acted upon.
We’ll also see much more of the networked HR organization. For example, the concept of workforce analytics data being closely guarded and available only to a small minority of HR staff will change. Crowd-sourcing tools such as corporate social networks will be used to disseminate non-sensitive data to expedite decision making.
Bringing It All Together: Packaging Data for Manager Consumption
Even if HR organizations possess the right skills and attributes for analytics, it is critical that the data consumers — front-line managers, leaders, and heads of talent management processes — are educated on how to act upon data analysis, without the risk of information overload.
At SuccessFactors, we strongly believe in packaging metrics with relevant, easy-to-digest insights that tell the story of a workforce. Providing managers with on-the-go access to talent metrics via their mobile device significantly increases the speed at which talent decisions are made.
For example, a manager might click on a headline, shown in the red box in Figure 1, to see that his or her division is losing far too many high performers to turnover, and that two supervisors are contributing to most of the departures. Armed with the data, simple analysis, and built-in recommendations for next steps, the manager can begin to address the problem’s root cause.
Next Steps for Gaining an Analytical Advantage
Companies that have adopted analytics as a core competency within their HR function have a competitive advantage. However, with limited resources at their disposal, HR leaders need to create a vision of how workforce analytics can answer the most important questions their organizations face. They then need to determine the best and most cost-effective ways to build or acquire the staff capabilities to execute that vision. Download the SuccessFactors Workforce Analytics resource bundle at http://www.successfactors.com/en_us/lp/your-roadmap-to-high-value-hr-analytics.html and learn how businesses are making better, data-driven decisions about their people.