I recently read the 2021 Human Capital Management Market Assertion report by Ventana Research, which stated, “Among seven emerging technologies, organizations most often cited business analytics (77%) and mobility (54%) as important for improving their HRMS.”
It was not a huge surprise to learn that analytics was at the top of the list given the number of decisions human resources needs to make on a daily basis.
I had a chance to chat with Nigel Dias to discuss people analytics. Dias is the managing director of 3n Strategy and the chair and founder of the HR Analytics ThinkTank research. He specializes in supporting businesses to make better HR decisions using people analytics and enabling a data-driven HR culture.
Q: Analytics and data mean different things to different people. Cutting through the hype, what is people analytics and data-driven HR?
A: If you strip away the hype and the buzzwords, the practice of people analytics and data-driven HR is really about enabling organizations to make better HR decisions. Whether we are talking about dashboards created in SAP SuccessFactors Workforce Analytics, reports created in Stories in People Analytics, data science done in python or anything else, if we [people analytics professionals] are doing our job, we will increase the likelihood that HR decision-makers make the right choices.
Recently there seems to be more urgency and importance about using people analytics. Why do you think that is?
I think there are a few reasons for why these topics have become more important in recent years. Firstly, and obviously, there is the general awareness of data and how most HR functions want to be seen to “do” analytics.
Secondly, and more practically, HR decision-making has been in the spotlight recently. Arguably, many issues organizations have related to – things like #MeToo and #BlackLivesMatter – are the result of historically poor decision-making and businesses will need to make better HR decisions to fix them. At the same time, organizations that could make better HR choices during the COVID-19 pandemic were more likely to succeed in 2020. Even now, business and HR leaders are making decisions that will directly impact how effective their workforce can be in the “new normal.” What HR leader would not want to make better, more informed, and fact-based decisions and increase their chances of success?
What types of decisions can organizations use analytics to answer?
Any time a decision is made about the workforce, there is the potential to use data and analytics to make a better choice. When you look across the entire employee experience, organizations make thousands of HR decisions – from high level, once-a-year decisions about strategy to detailed, daily decisions about recruitment. When we meet with CHROs and their teams, we can usually identify hundreds of decisions from these leadership teams alone. The real trick is to prioritize decisions and HR questions and then decide on the most appropriate analytics to answer them.
Is there a difference between reporting and analytics? How should businesses choose which one to do?
Reporting and analytics are very closely related, as they are both about providing someone with evidence so that the decision-maker can make a better choice. If you were building a vision or strategy for data-driven HR, personally I would include them both.
The difference between them is usually the nature of the decision being made and the nature of the metrics being provided. Reporting is usually about providing transaction data to a decision-maker so that person can make a choice about their team or division. Normally the context is quite straight forward, as are the metrics, like simple headcounts, ratios, and percentage breakdowns that SAP SuccessFactors customers can access from Stories in People Analytics.
The analytics component of your data-driven HR strategy will probably be more strategic in nature. It will involve looking at historic data and trends in order to make decisions about HR strategies and policies for the future. Emerging analytics teams might focus on dashboards and reports in SAP SuccessFactors Workforce Analytics for example, but in many modern functions they will aspire to aid more important HR decisions using more complex evidence based in data science and statistical modelling.
Do you have any tips for SAP SuccessFactors customers that want to adopt a data-driven approach to HR decision-making?
I would encourage any organization to build an adoption and change management plan dedicated to data-driven HR. Many businesses think that simply implementing an analytics or reporting tool will be enough, but it usually is not. An organization will need to enable people decision-makers with the right skills and behaviors to embrace a data-driven approach.
Don’t worry though – most HR decisions and questions that people analytics will help with are already being made. You just need to find them. And once you successfully created the foundations of data-driven HR and people are making better choices, it is like cumulative interest in a savings account – as your teams make more and better decisions, you will see a higher return on your analytics investment.
If you would like to hear more insight on this topic, be sure to register for the upcoming webinar, “Debunking the 5 Common Myths about Workforce Analytics” on April 13, at 11:30 a.m. ET or visit our website.