Are You Using Your “People Analytics” to Create Value?

Human-resources executives have aspired to be strategic advisers to business leaders for at least a generation. But it’s been a struggle for many because it’s so difficult to measure the business value of HR approaches. Questions such as “What is the ROI of training?” and “Which screening techniques yield the best performing recruits?” or “What target-setting approach will best motivate performance?” have been met with imprecise answers.

By analyzing the links between people practices and productivity, some companies are improving their bottom line.

That’s how the McKinsey Quarterly blog article that inspired this post started out.

If you haven’t started yet..

What new tools and methods are you using to analyze data linking “people practices” and performance more effectively? CEOs are hunting for value anywhere they can find it, so if you and or your head of HR haven’t begun searching for ideas for using data to generate a talent strategy that’s more closely linked to business results, you’re already behind the pack.

Where’s your analytics?

The widespread adoption of enterprise resource planning and HR information systems has made data on business operations, performance, and personnel more accessible and standardized. Furthermore, the rise of HR information systems has generated a community of software and technology intermediaries that can help HR and business executives use data to find links between talent management and labor productivity. So my question to you is what data are you using, and how objective is it in the analysis that’s it reporting back to you?

There has always been a universal imperative to get more for less, and this has led many companies to seek new ways of using “People Analytics” to create greater value, and linking this value back to traditional company bottom line results.

The specific people-related practices that add value will differ by company / industry dynamics, talent scarcity, growth rates, and corporate cultures. However, a vast majority of organizations getting the most value from investing in People Analytics all use some variation of these four steps.

1. Focus HR on business priorities

Most HR teams view, organize, and measure their activities through the traditional employee life cycle: starting with recruiting, hiring, and “on-boarding” and proceeding to evaluation, training, and development. However, for People Analytics efforts to work, the function’s leaders must view problems, and value creation opportunities, as business leaders do. Their efforts have to drive business outcomes & bottom-line results.

Learn to spot the pain points in your organization and then establish the metrics that are going to relieve these. I’ve found the use of a One Page Strategic Plan is an ideal way to tie individual actions directly back to business results, whilst increasing over-all engagement of the team as a whole.

2. Start and finish with objective data

Engage business leaders in efforts to identify issues and structure problems in a way that data gathering and statistical analysis is objective. Instead of turning a leadership team into data analysts, use tools such as WorkMeter to empower your employees to take responsibility for their own performance and productivity standards.

3. Go beyond traditional HR solutions

Albert Einstein is quoted as saying; “We cannot solve our problems with the same thinking we used when we created them. The very definition of Insanity is insistence on doing the same thing over and over again and expecting different results.”

New insights require additional problem solving to go from theoretical solutions to practical ones. People Analytics succeeds only when human-resources and business leaders work together to address the root causes of problems, pilot new ways of solving them, and focus on transforming learning into new more productive habits.

4. Make it sticky

Build a lasting source of value creation by integrating analytics practices into day-to-day business rhythms. A Great best-practice I used just last week was integrating “operational people” into strategic business reviews to identify priorities for analysis. This practice helps senior line executives conduct problem-solving discussions around issues sometimes yet to emerge. ** “Word of caution, don’t try this at home without parental supervision.” At the beginning, this is best done with the help of a Strategic Facilitator in order to extract the most value & guarantee a “safe environment” for success.

In our case, we identified a problem 30 days before it would have had a significant negative impact on the business bottom-line, and therefore were proactive in addressing the short-term impact, as well as the long-term process change requirement.

Commit yourself to the habit of measuring and reporting regularly, for this rhythm helps business leaders understand that progress is happening even when traditional results may take weeks or months to appear. More importantly, it also provides a clearer understanding, in both directions, of changing priorities and emerging findings from the work.

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