The business questions to be answered through analytics should be prioritized by the order of their impact. Crunching all HR data available, in order to identify patterns and correlations won’t yield effective results and hence, should be avoided. Experts suggest that companies should start with measuring simple metrics such as workforce diversity, attrition levels etc. over regular intervals of time to get an initial grasp on company position and eventually move on to solving complex issues such as finding the impact of training investment on profit margins.
Identifying Right Data To Provide Strategic Impact
Most of the organizations rely on data residing with ERP (Enterprise Resource Planning) systems for analysis. In most cases, it serves as a good starting point for deriving insights on recruitment, and performance. However, combining this data with data from exit interviews, employee engagement surveys etc. would lead to even better insights. Some of the important metrics can be overall talent retention rate, cost to hire talent, time to hire talent, revenue per full-time employee, diversity statistics etc. For more complex business problems, for instance, which kind of staff resolve customer queries most efficiently, HR data needs to be integrated with customer service data.
Incorporating Findings In Business Conversations
HR needs to make sure that there is a clear line of sight between HR metrics analysis and business profitability. In some cases, it is observed that HR department carries out the analysis regularly, but fails to present the results in a business context. An investment In HR analytics involves a lot of investment from the company, and hence, needs to prove its worth.
The Roadblocks
While analytics can deliver higher return on investment (ROI) in a standalone manner, HR departments in organizations are finding it difficult to synthesize “multiple unintegrated sources” of people and organizational data to build a comprehensive plan around this technology. One research study shows that more than 80% of HR professionals rate their ability to analyze data as “low” – a worrisome trend in a function that is now increasingly data-driven. In another study, 75% of surveyed companies believed that using people analytics was “important”, but only 8% believed that their organization was “strong” in this area.
Organizations must take cognizance of the fact that investing in people analytics is essential for gaining competitive advantage, and requires substantial investment at the earliest to get traction. However, they must also understand that analytics is no substitute for direct employee engagement, but just a supplemental tool to gain better insights. The need of the hour is to build a strong intersection between data and human behavior, so as to drive phenomenal results for the organization.
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