Organisations that build their HR analytics strategy well start with two questions: what are our business objectives and how can we use analytics to optimise the effect of our people practices on attaining these objectives?
A new study shows that most organisations don’t focus enough on HR analytics to make it successful, with over two thirds of HRs saying they are not good enough at it.
The study, Organising for HR analytics success, by the Top Employers Institute and Bright & Company, surveyed 200 HR executives in 36 countries, exploring trends and developments in organising and executing analytics.
Those who see themselves as ‘advanced’ (24%) or ‘experts’ (7%), say that four key considerations are needed to make HR analytics successful.
Analytics needs to be positioned strategically.
HR analytics efforts are organised to optimise the impact of HR interventions on their business. This increases the chances of successfully attaining business objectives.
For instance, experts know what issues business management are facing (80%) and have strong senior management support for data driven HR (87%).
Specific roles and capabilities are needed.
Analytical capabilities, IT capabilities and management capabilities are all important, but experts say it is important for HR business partners to be the link between business and HR (93%).
Many organisations struggle to attract good analytical talent in-house (38% possess such capabilities), while others benefit from a company-wide central analytics function (42%).
Good governance and cooperation is required.
Developing and documenting guidelines on execution is an important step in creating a more data driven mindset in HR. All key players and other stakeholders should be on board and involved, know what to do, and understand the relations and interdependencies between roles (38% of total respondents agree).
Data is the most important fuel of any analytics project.
Yet, most organisations did not get a perfect score in this respect. On average, experts outperform normal practitioners 83% versus 48%.
Plus, many HR organisations cannot fully rely on their IT function and are lacking support from their CIO in promoting and implementing HR analytics in the organisations.
Rob van Dijk, leading expert HR analytics at Bright & Company, told us: “Only when organisations take HR analytics seriously with senior management support, can they make it a sustainable success. By demonstrating business impact through HR analytics, HR is able to claim a place for data driven HR at the core of strategic decision making.”
Finding out how HR can have a positive impact on achieving important objectives for the organisation is the essence of HR analytics.
This means it is crucial to know what issues business management are facing and for them to know how HR can help. You need senior management support to be able to position HR analytics strategically.
Usually, a scoped but appealing pilot with a clear link between HR and business results will get the support from senior management.
The next challenge is to gain momentum and start building capability to grow and add sustained value, by integration of a relevant HR analysis in every important business decision.
Ultimately, you’ll want business management to act on insights provided by HR. For that to happen, they need to see the business value of a proposed HR intervention.