How HR Leaders Can Take Small Steps to Begin Utilizing HR Analytics
When Drinking from a Fire Hose, Take Small Sips
Today, there’s no shortage of talk about Big Data and how to use it to improve all kinds of aspects of a business. Because employee costs are one of the largest expense categories at most companies, the business world is keen to discover how to put Big Data to use in the HR department. According to Deloitte’s 2017 Global Human Capital Trends report, 71% of companies see people analytics as a high priority in their organizations, but far fewer have been able to make analytics a reality.
To some extent, Big Data may be a misnomer for HR data analytics. Big Data typically involves millions of data points collected at all times. But as Peter Kapelli recently noted in Harvard Business Review, most HR departments collect data on a few hundred or a few thousand employees, and most of that information is collected annually, not continuously. However, this HR information can still be a source of valuable analysis.
In an earlier article, we identified the three types of HR analytics and how they could be used in practice. Gallup recently provided a successful HR analytics example about a government agency that was able to surpass its recruitment goals by 25% by combining internal recruiting data with external sources of data and applying a data-driven approach to its advertising strategy.
5 Initial Steps Towards HR Data Analytics
If you’re just starting down the road of HR analytics, it’s important to know that good planning is half the battle. And you don’t have to analyze everything at once. Here are five small steps to help you get started:
- Define one or two problems to solve. What do you want HR data analytics to do for your organization? Do you want to identify the top causes of employee turnover? Do you want to lower your costs for recruiting? Choose one (or maybe two) question(s) your organization would like to focus on first. Without good definition, analytics will fall short of expectations. Currently, the top areas of HR analytics are recruiting, performance measurement, compensation, workforce planning, and retention, according to Deloitte.
- Collect the right data. Look back over the problem you identified in step 1. Do you currently collect any information about that problem? For example, you can’t solve the challenge of lowering turnover if you don’t collect any information about the causes of turnover. So you’d have to start collecting that information going forward. Deloitte found that only 8% of organizations report that they have usable data to analyze today.
- Leverage your HR technology. Human Capital Management (HCM) systems, including any applicant tracking or recruiting systems, and talent management systems, can be important sources of data points. Your HCM system should already contain lots of employee demographic information, salary levels, and benefits costs. Depending on your system’s functionality, you may also have information about sources of hire, performance assessments, learning objectives, skills and more.
- Get help from IT. For complex analytics, you’re going to need an analytical tool and also help from people who understand all of the various sources of data available across the organization. You might need information from your company’s Enterprise Resource Planning (ERP), sales automation or manufacturing systems. Sit down with IT to describe the problem you are trying to solve and identify the data that can be brought to bear. You can often get started faster with analytics if your software systems are in the Cloud because it can be easier to extract data streams.
- Get the right people involved. Is there someone in HR with data analytics skills? How will you communicate your findings and actionable insights to the rest of the organization? To top executives? You need to be sure you have the right team in place to collect data, analyze data, draw insights from data, and receive those insights in order to produce any data-driven organizational decisions.
HR Analytics Require Technology
To carry out effective analysis of HR problems, there is usually too much data involved to track by any paper-based or spreadsheet methods. You’ll need to capture employee data in a Human Capital Management (HCM) system and also identify external sources of information that you could feed into your analytics for a more complete picture. Asure Software’s Human Capital Management and Talent Management solutions collect and centralize many types of essential data about HR programs and employees.