Analytics as a Lifestyle Within HR
Adopting the Analytics Lifestyle
The four trends we described are making analytics a strategic imperative for HR organizations. So how do HR organizations embrace analytics and leverage data to drive value? We believe, HR needs to adopt analytics as a lifestyle to evolve to the next stage of driving value to the business through data. Organizations that are adopting analytics as a lifestyle are focused on four key principles in how they are organizing, synthesizing, evaluating and communicating data and insights to their business leaders.
1. Start with the Business Issues and "Right Questions"
In order to have targeted impact, HR should start with the "critical few" questions that matter to its specific business/business unit. Our experience in consulting with organizations on HR analytics and HR data has led us to discover a few patterns. Business leaders tend to focus on large business issues and related talent issues; they do not have a siloed view of compensation or talent acquisition or benefits. The richer the dialogue and the deeper the impact on the organization, the greater is the credibility of the HR leaders. HR needs to start combining data across HR disciplines to answer the integrated questions as well as predicting the drivers of human capital – retention, engagement and career growth patterns.
2. Focus on Data-Driven Narratives
Once HR has a deep understanding of the talent questions and challenges and has gathered data from the various systems; organized it with a keen eye on patterns and insights; and experimented with it, the next step is to build a cogent narrative with insights based on the data. We recommend creating a storyboard that connects to the strategic business priorities and their resulting implications on talent, along with a set of analytics that highlights and addresses the business leaders' key priorities for human capital.
3. Develop a Narrative - Building Analytical Capability
While HR teams have been building capabilities in organization design, change management, evaluation of top talent, and interview and selection of top candidates, they have frequently neglected the use of data when consulting with business leaders. Instead, HR has been celebrated for its intuition and gut-based decision-making. In a 2014 research study led by the Harvard Business Review, 47% of the surveyed companies reported that lack of analytical acumen or skills in HR professionals was a large obstacle to achieving better use of data, metrics and analysis. There is a need for HR to elevate itself to focus on strategic business questions rather than more functional HR questions. In order to be effective at identifying key questions, seasoned HR professionals should be able to understand the key business priorities and the impact of those priorities on talent needs.
4. Establish a Cadence
The next step and a core principle in making analytics a lifestyle within HR is to develop a regular and disciplined cadence of reviewing data, metrics and findings. We believe it should become second nature for HR to look at the key metrics each month/quarter, select insights from the data and be able to consult proactively with the business on ways to move the needle and monitor results when specific interventions have been put in place. HR needs to be able to tell stories with the numbers in the same way that its counterparts in finance do. HR needs the discipline to be able to review data on an ongoing and sustainable basis and not just in an eventdriven manner such as during annual compensation cycles or at talent reviews. HR's review of data should be proactive and should bring business insights before the business is looking for them. Continued cadence will drive the next evolution of HR as the HRBP gets closer to critical talent issues within the business and is able to revise and tune the focused narrative to meet new needs as the business continually evolves.
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