Your human resources department is on the front lines of getting the best people in place to drive success for your organization. Yet a 2016 study revealed that while 64 percent of HR practitioners believed their efforts and tactics were actively contributing to the organization, only 23 percent of company leaders agreed.
This disconnect in perception around HR’s key role in driving business strategy is understandable, given the limited value of current HR metrics, the difficulty of collecting inaccessible data and a lingering uncertainty around what areas to measure. Introducing analytics can help your HR team leverage greater insights from available data and use that information to drive performance, productivity and other key business strategies.
I already track metrics – why do I need analytics?
In short, metrics describe concrete measures of past performance: i.e. how many candidates applied, how many employees left the company, the average salary and headcount. Analytics use data to gain insights or predict future patterns: What educational background best indicates future high performers? Or, why are top performers leaving? It’s estimated that 97 percent of HR departments already have some sort of metrics data. HR is data rich, but often insight poor. Ask yourself: What data do you have available to you for analytics?
How could analytics benefit my HR team and organization?
Putting a greater emphasis on analytics can go a long way in giving HR evidence of its strategic, bottom-line business impact. For example, demonstrating that effective hiring, retention and training reduces the labor cost of one unit of product. It can build better relationships with all lines of the business, and win executive support, earning HR professionals a seat at the decision-making table. It can also be a way to leverage the skills of millennials in a new way. Predictive analytics have the ability to help your business foreshadow changes and actively tackle them in the present. For example, developing a profile of employees at high risk of leaving the organization, fostering deeper engagement and retaining top tier talent.
Where do I start?
In collaboration with your CEO or other leaders, identify two or three important metrics for HR to track, ensuring that they are aligned with corporate strategy. Identify where to pull the data from, and how to obtain it consistently. It is important to report on this regularly, including context and insight on your analysis. Consider segmenting to the department level to drive behaviors. And, don’t limit analysis solely to the HR department – make sure to tap into other skillsets within your organization to compile and analyze the data.
Contact us to learn how to tap into your organization’s HR analytics potential. By putting the focus on outcomes, you’ll deepen the connection between your HR department and your strategic goals, better positioning your organization to win over top talent and foreshadow future turbulence.