HR Analytics: Back to Basics
HR systems are the “pot of gold” in terms of data for a lot of organisations, especially companies that run people business.
From my experience with customers around HR reporting and analytics in the last few years, the phrase “we want the reports that we always had” seems common. This is unlike the case with finance departments or supply chains and sales, whose reports change every time. New information raises new questions that in turn require new information — it is a never-ending circle of quality improvement.
Sticking to what you have been used to doing despite the changes around you will not open new roads or generate new insights. The current worldwide economic recession requires everybody to mind costs, which is the case especially with HR. Standardization is one of the key elements going on in HR at the moment, together with SAAS. At NorthgateArinso, we experience this every day. On the HR Analytics side, however, companies keep using their old reports even when processes and systems have changed while the value of the data in HR remains so high.
There are many articles and books on HR metrics and even more on dashboarding and reporting. But do these tools convey the truth? Probably yes for a big part, but what is more important is that HR departments realize where they are with analytics and their data and start entering the never-ending circle. Set goals and align to the corporate strategy. If certain activities are of no use to your senior executives, be careful about spending time on it. Use one version of the truth and make the reporting system leading; this is the most important thing. No matter what you measure and which metrics you use, make sure they come out of a system, with maximum automation, and are not reported in Excel. Discussing definitions (“I added xyz because last week this was missing”), content and calculations is not necessary and is simply a waste of time.)
One should start with information management, not with metrics, business intelligence or expensive systems. Perform an in-depth analysis before you initiate the project and define goals on learning, describe how to improve the system and set targets you want to achieve with information management and analytics.
The above changes and their impact are not without challenges. They may not come easy to quite some people in the HR organization. Information will become transparent and it will take some months before everybody is used to it. After that, the real favorable effect of the never-ending circle will start. Figures can be followed, trends will be recognized and behavior will improve. This is your way to optimized performance.
It might be useful to exchange ideas with consultants to guide the organization through the first 3 steps:
- Align with corporate strategy and define the top 10 metrics for the next year;
- Implement a reporting hierarchy for the top 10 metrics and assign responsibilities for departments and people.
- Create a report set, based on data in the HRIS and make sure the reports are aligned from operational over tactical to strategic level and use these frequently in meetings.
The next steps after these initiatives are more complex but will make HR data even more valuable, for example, in combination with other main processes in the organization. But first go back to the basics and optimize the value of HR data.