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HR Analytics is the latest buzz word in every HR professional’s dictionary. So, what is it all about? HR Analytics is essentially the correlation of people data with business data to create people strategies based on available information so as to positively impact company performance.

While we are all talking about HR Analytics and all claiming to be using it, the reality is that most companies are still stuck with basic Operational Reporting only. Dozens of man hours are poured in to make reports like Time to Hire, Cost per Hire, Attrition Rates, Headcount Changes, Training days per employee, etc. We even go ahead and prepare some charts and dashboards out of this data. These are used for presenting the output of your HR team to the organization in board meetings.

While there is no harm in doing so, do these reports help the business in any manner? At most, these are only good indicators of how well the HR department is functioning internally. Nothing beyond it. They may be good to track operational efficiency, but the time and effort spent on them can be used elsewhere for more productive purposes. And how do you achieve that?

Of course, by using a software. And you get them by the dozens these days. HR automation is the focus areas of most big companies like IBM, TCS, Oracle, SAP, Accenture etc. If this were not enough, there are a host of companies catering with Software as a Service (SaaS) products in HR – Ramco, Successfactors, Workday, HRMantra, Adrenalin, etc. the list goes on and on. There is a HR software for every company size and every budget available in the market these days. Most of these HRIS products come with in-built reporting modules which take the effort out of basic Operational Reporting. You can drag and drop fields and generate reports on the fly. Trust me; it really saves a lot of time.

And what do you do with the time thus saved? You use it, for more advanced reporting – Predictive Analysis. Most ERPs come with their Business Intelligence or Business Anlaytics add-ons. Alternatively, you could opt for standalone tools like Tableau, Visier, Aquire, etc.. Once you have data and the tool, you need to start forming your own hypothesis as to what is the cause and what is the impact. Gather all relevant data points and find out the correlation factor to see if your assumption was actually true.

We have all probably read about how Google uses People Data to Influence People Decisions as diverse as workplace design, hiring criteria and cafeteria menus, all linked back to productivity. I am sure many of you have done some bit at your end as well.

In one of my previous organizations, we piloted an ‘Early Warning Signal’ tool to predict attrition and fine-tuned it over a period of 18 months and 6 iterations to assign weightages to employee behaviors which could predict attrition more accurately. We figured, ‘If a manager is also on a team member’s personal friend list, the employee is more likely to stay back longer. This triggered training programs for managers to develop personal bonds which in turn reduced attrition (measured by month-on-month attrition rates before and after training).

One of our Talent Acquisition managers was able to plot the performance of our new hires (measured by sales registered in first year) vis-à-vis their source of hire to conclude that employees hired from Tier 2 B-Schools out performed those from Premier institutes. Some of them even outperformed their tenured seniors. This predictive analysis helped us fine tune hiring strategy, reduce costs and also increase profits.

These are mere examples. Remember. Before running any analysis, you must have the required data in place and in standardized usable format. More importantly, you must have a hypothesis that you are trying to prove right or wrong. And of course, it has to link back to business outcomes. Without either, you will only be wasting time and efforts.

A structured approach is to define your HR Metrics, analytics and dashboards based on business goals. For example, if the business goal is ‘To become the most profitable Real Estate Firm in India by 2020’, you can brainstorm and discuss with business heads to finalize how can HR contribute to the goal. Once you know that, you can decide how you will measure HR performance against business goals. Creating a Strategy Map (like the one in image below) can help you in this exercise. Based on it, individual teams in HR can then have their own metrics for reporting and analytics.

ʘ The Talent Acquisition team will have its goal cut to hire the best people for specialized roles (decided by first year ratings) who are stable (decided by first year attrition) so as to fill the manpower needs required to achieve the goal.

ʘ The HR Business Partner team who manages Employee Life Cycle will have its work cut-out to foster collaboration among existing employees so that they are highly motivated (measured by e-Sat scores) and perform better than previous years (measured be y-o-y ratings) so as to achieve the goal.

ʘ The L&D team has to focus on training Customer Service Agents (measured via training effectiveness surveys) thereby creating better Customer Satisfaction (measured by customer surveys) as a key to help business achieve its goal.

ʘ The Compensation team will have to develop Performance Linked Rewards Scheme which motivates employees to perform better (measured via discretionary Rewards given out vis-a-vis Business Performance achieved).

The idea is to build and present an HR dashboard showcasing the impact of HR on business, establishing a cause-and-effect relationship between what HR does and actual business outcomes. And that, in a nut shell is the crux of what HR Analytics is all about.

And do not need to worry about the mathematics or the statistics. Modern day tools are very user friendly and can be effectively used by any person with good logical and reasoning skills. Drag, drop, experiment and you can master the tools in a very short span of time. This is one up-skilling investment that is really worth making for every HR professional.

Happy Analytics!!

Vishal Nagda
linkedin.com

The author combines skills acquired by him while graduating as an Engineer and mastering in HR to give a logical touch to HR. He is a Certified HR Analytics and Metrics Professional and also the Founder of HR Professionals - LinkedIn Group (https://bit.ly/hrprofessionals) having more than 280,000+ members worldwide. Leading and moderating global discussions on HR related topics gives him a rich and varied perspective of HR trends all over the world.

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The above article was published as part of the Cover Feature on HR Analytics in Business Manager HR Magazine's - Dec 2015 Issue.
http://businessmanager.in
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Hi all, Strategy Map illustration for above discussion is attached herewith for your reference. Regards, Vishal Nagda

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