An approach for implementing and embedding HR analytics

13 September 2017 Consultancy.uk

The interest in HR analytics is growing. Directors expect their HR teams to anticipate developments in the HR field and advise on future HR policy. HR teams, in turn, hope that HR analytics will support them in realising this, and given the possibilities HR analytics has to offer, they are quite right to do so. Unfortunately, many organisations struggle with embedding HR analytics – Petra Schrijver, a Consultant at Improven, looks into the adoption barriers in the realm and provides tips for how organisations can improve the roll-out.

The advantages of HR analytics are substantial. It provides an insight into the efficiency, effectiveness and impact of HR activities. This allows the HR organisation to better quantify its contribution and advise the organisation on a strategic level. Especially in today’s world, where the war for talent continues and organisations are faced with personnel shortages in crucial functional areas, this is more important than ever.

Recent research conducted by Deloitte shows that 71% of the organisations surveyed give HR analytics a large priority. Looking at the current trends and developments in HR, this is not a surprise. HR processes are increasingly optimised and digitalised and E-HRM allows managers and employees to be in control of their own HR matters. As a result, the role of HR is changing from an administrative and operational function to a more strategic and advisory one. HR professionals consider HR analytics to be a condition to successfully fulfil this new role and provide the organisation with data-driven advice.

It turns out that the number of organisations where HR data is gathered and actually used for predictive analyses has remained stable over the past three years. At the same time, the demand for reliable HR data is increasing. I also see this with many of our clients at Improven. HR functions not only require reliable HR data for reporting purposes but they are also keen to start using data for predictive analyses. So, if the interest in predictive analyses within HR is increasing, why has the number of organisations using this actually remained the same?

Obstacles

The stagnation can be explained by the lack of preconditions that are in place. Organisations are simply not ready to start using HR data for such advanced analytical purposes. Many analyses start with discussions around definitions of HR data and HR KPIs. Common definitions that organisations often do not (yet) have in place. Furthermore, many organisations have limited analytical and statistical competency within their HR department. In order to conduct analyses, affinity with, and knowledge of, statistical methods is necessary. However, these are requirements you don’t typically find in HR vacancies.The pyramid of HR data usage

HR analytics : a definition

How can organisations make sure they are ready for HR analytics ? Above all, it is important to agree on the definition of HR analytics. Many organisations classify everything that has to do with HR data as ‘HR analytics’. Research indicates that the majority of HR managers, when asked what HR analytics actually is, think it is about HR reporting and the justification of investments in HR. At Improven we define such activities as ‘HR Metrics’. HR Metrics describe and measure what happened in the past. HR analytics is more analytical and predictive, and therefore future-oriented. We use the following definition for HR analytics: ‘The use of HR data for the purpose of analysing and predicting the efficiency and effectiveness of HR activities, and their impact on overall organisational performance’.

The four levels of HR data usage

In using HR data, we distinguish between four levels. Level 1 consists of operational HR reporting. Level 2 focuses on dashboards with HR KPIs. Level 3 concerns tactical analyses on the efficiency and effectiveness of HR activities. Lastly, level 4 consists of strategic analyses regarding the impact of HR activities on the organisation’s overall performance. Levels 1 and 2 describe and measure what happened in the past (HR Metrics). Levels 3 and 4 are more analytical and predictive in nature (HR analytics).

Cumulative preconditions

To make progress in the use of HR data, organisations need to meet specific preconditions. These preconditions differ for each level but are cumulative, meaning that if organisations want to conduct tactical analyses (level 3), they not only have to meet the precondition for level 3, but also those for HR reporting (level 1) and HR KPIs (level 2).

I will further elaborate on these cumulative preconditions with an example. Let’s say an organisation wants to know whether the duration that their recruiters have worked with them affects the quality of their new hires. In fact, this is about analysing the effectiveness of HR activities. A tactical analysis at level 3. An important element of this analysis is ‘length of employment’. If we don’t know the length of employment of the recruiters, we are not able to conduct this analysis. The first step would therefore be to run a query on ‘length of employment’ for all recruiters in the organisation – HR reporting at level 1. A question that logically follows is how ‘length of employment’ is determined. Does it follow from the employee’s last hire date? Or initial hire date? What if an employee is re-hired after working for another organisation for a period of time? Or if an employee was employed as a contractor first?

In summary, where do you start and stop counting? By agreeing with one another on what ‘length of employment’ means and how it is determined and registered, you avoid strategic decision-making based on misinterpretation and unreliable outcomes, which is obviously highly undesirable. Therefore, defining HR data is considered to be a precondition for properly reporting on HR data (level 1). A similar question can be asked for the definition of the KPI ‘quality of new hire’. When is a new hire considered to be successful and how do you measure this? In the example above, we first have to define ‘length of employment’ and ‘quality of new hire’ and agree with one another on how they are determined or measured.

Challenging preconditions

We see many organisations struggle with the preconditions that are associated with levels 1 and 2. Moving towards clear, unambiguous HR data definitions is a challenge that is easily underestimated. Besides defining HR data and HR KPIs, organisations experience difficulties in creating a ‘single point of truth’. By using multiple systems, organisations run the risk of data being registered more than once and not kept up-to-date in a consequent matter. How do you know which data to use in your analysis? The challenge becomes even more complex if there’s confusion about who ‘owns’ the data. Quite often, when HR data, or reports, are incomplete or (appear to be) incorrect, the finger is pointed at IT. How can IT be held responsible or accountable for the data entered by HR employees or line managers? Organisations should assign responsibilities related to data ownership but are sometimes reluctant to start this discussion.

Are employees unaware? Do they wonder why they have to enter or report on specific data when nobody ever looks at them? Are data definitions missing and responsibilities related to data ownership not assigned? And are agreements on HR processes and HR systems lacking? This will lead the quality and reliability of HR data to drop rapidly. When organisations are not able to move towards using HR data at level 3 and 4, we call this ‘hitting the wall’. HR departments want to quantify their contribution to the organisation’s overall performance, but are hitting a proverbial wall in doing so.

Maturity model for HR data usage

How to gain control

Improven has developed an approach that offers a solution to this problem. We help organisations to get ready for HR analytics by creating a basic foundation. In doing so, we use Nolan Norton’s maturity model. This model allows organisations to mature in their use of data by focusing on the following areas: organisation, systems, people and processes. For each of these focus areas, Improven has defined critical preconditions, for both level 1 and 2, see also image 2. By meeting these preconditions, organisations create the right foundation to start working with HR analytics .

HR Scan

How does Improven translate this approach into practice? Using an HR scan, we determine the current level of HR data usage. We assess the extent to which preconditions on level 1 and 2 are currently met and suggest improvements for each focus area: organisation, systems, people, and processes. We then work with our clients towards meeting these preconditions. Which of the focus areas need most attention varies from one organisation to the other. Some of the organisations have their processes standardised, digitalised and clearly described but somehow still experience difficulties in providing reliable management information. This can be due to missing HR data or KPI definitions, for example.

In other organisations, employees are lacking necessary knowledge of the HR data chain. They don’t understand what the HR data is used for or by whom, both inside and outside of the HR department. Even though the focus of improvements differs between organisations, the ultimate goal is to let organisations meet the preconditions up to level 2. This enables them to be in control of their HR Metrics, thus creating the necessary foundation for HR analytics.

Related: Four success factors for the adoption of HR analytics and reporting.

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Why leaders must balance technical expertise with soft skills

17 April 2019 Consultancy.uk

Soft skills matter in the workplace just as much as technical expertise, writes Samantha Caine, Managing Director of Business Linked Teams.

For too long technical expertise has been seen as the marker of a strong candidate for development into a sales or leadership position. Sales and leadership candidates are tasked with demonstrating a diverse and wide-ranging set of technical skills, yet their aptitude in these technical skills or ‘hard skills’ cannot signify great leadership potential. This is why a healthy balance of soft skills and technical ability is required. 

So what exactly is the difference between technical skills and soft skills? In engineering, it’s crucial to demonstrate knowledge of physics as well as a strong grasp on mathematical equations. Yet, in any industry, it’s important for leaders to be able to interact with other people effectively with soft skills like communication, empathy and adaptability. 

Business Linked Team’s 2018 study into internal leadership development revealed that 69% of large organisations are prioritising the identification and development of future leaders from within the workforce. As more and more organisations begin to invest in sales or leadership development within their existing workforces, more focus needs to be placed on ensuring the right soft skills are in place. 

With those soft skills in place throughout the workforce, the business will benefit from a wider pool of potential leaders developing under their noses, and it should be the same where sales candidates are concerned. 

It’s not just about easier access to ideal candidates for these positions without the rigmarole of recruiting from outside of the organisation. The leadership development study also found that 89% of HR decision makers say succession planning has become a top priority. Those currently serving in leadership positions can’t lead forever and the same goes for those generating sales for the business.

Why leaders must balance technical expertise with soft skills

From people leaving for new opportunities or retirement, to people simply stepping aside to focus on other areas of the business, successful leaders and salespeople require experienced and capable successors that will be ready and able to confidently step into their shoes and pick up the mantle without the business experiencing any lapse in performance.

Soft skills make stronger candidates

When it comes to the soft skills required, a strong leader must be able to manage through clear communication and effective time management, coaching and goal setting. They must be able to demonstrate empathy and empower their teams to be successful, productive and fully engaged. And beyond simply giving direction, they must also be able to take direction from those above them and cascade the business strategy down through their teams. 

A strong sales candidate must possess the ability to communicate value to the customer, negotiate well and protect margin or the ability to increase the scope of a particular sales opportunity. 

With the relevant soft skills in place, the business will benefit from increased productivity, greater agility against changing market conditions and greater transparency. In turn, this will provide visibility on issues and inefficiencies while removing opportunity for miscommunication. All of this can transform the culture of a department, improving employee satisfaction and reducing staff turnover. 

Ultimately, developing leadership or sales candidates will require the business to strike the right balance between technical skills and soft skills, and this requires an effective and sustained learning journey.

A balanced learning journey

Facilitating and supporting the development of leadership and sales is best achieved by establishing training groups. By cultivating training groups, businesses are creating talent pools that will inspire and support each other on the learning journey. However, personal goals and learning objectives must be defined for each individual based on their own existing skillsets and the skills that each individual needs to develop. 

With the emergence of e-learning, businesses recognise the value of online-based learning activities, yet many make the mistake of opting for one-size-fits-all solutions which are solely focused on self-study. A development solution will only deliver true return on investment if it combines e-learning activities with group learning activities that provide opportunity for shared experiences and support.

A blended learning solution that combines self-study and face-to-face group learning activities will aid strong development of the talent pool through shared experiences. Through these shared experiences, those undergoing the training will organically develop a support network that supports the development of the group as much as it supports the development of each individual. 

The blended learning approach is supported by one of the seven principles of human learning that socially supported interactions aid the individual development of expertise, metacognitive skills, and formation of the learner’s sense of self. The strongest opportunities for development can be unlocked by blending workshops with online activities such as virtual sessions, peer coaching, self-study, online games and business simulations. But it’s crucial to provide a blend of one-to-one and group sessions too.

Beyond delivering a better learning outcome for the employee, the blended learning approach allows organisations to adapt their training quickly and easily to shifting business demands in an ever-changing landscape.