Monday, December 20, 2010

5 Ways to Introduce HR Analytics in Your Organization




When I ask my readers for questions they never let me down! This week I received a great question from across the pond from Ade Adetukasi (@adetukasi on Twitter). His question to me is below:
How do you introduce Analytics to an organisation where the leadership has a "personnel management" mindset of HR.
Well, that is a great question and one that I have been asked many times. I think it is definitely a hard sale but it is not impossible. Before I answer the question I want to clear up some terminology first. Metrics and Analytics are used interchangeably a lot. I happen to think there is a difference. Someone summed it up really well for me this year.....Metrics are like accounting and Analytics are like finance. To me metrics are those measures we track in HR that tells us how we are doing as far as efficiency and effectiveness. Hopefully they are closely linked to the strategy but in order to really PROVE impact on results, you must use analytics. In other words take all the data in the organization HR metrics, Customer metrics, Financial metrics and use statistics to get to insight and impact.

So back to the question with your leader with his head stuck in the sand.....in this situation I believe you would start with metrics so that the leader can see what is possible. Starting with Analytics would probably be too much for the non-strategic leader.

Here are some ideas to help with that situation:

1) Find out what is important to the leader and see if you can't help him solve a problem using data you already have. Maybe he wants to grow market share. Maybe you can talk about retention of your top sales people. Looking at sales data with turnover data would be a great place to start.

2) Start educating your leader on the strategic value of HR by sending him articles, blog links, etc.

3) Work with other functional areas like sales, marketing, finance and accounting to see if you can partner with those areas and come up with metrics that are meaningful to your business.

4) Start with the low hanging fruit like tracking common metrics and see what emerges from there. (time to fill, training spend per employee, turnover by department, and by manager)

5) Demonstrate that HR is dedicated to providing the right people, at the right time that perform well. Make sure HR understands the business and the strategy so that you can talk your leaders language.

If all else fails....you may have to find a place that values the contributions HR can make!

Any other ideas for Ade on how to introduce metrics into the organization?

5 comments:

Bonnie Beresford said...

Good stuff Cathy, and good question Ade.

I agree that finding that low hanging fruit and getting some quick wins is a great place to start. Any time you can take your standard dashboard metrics (yes, metrics) like training per employee or turnover and further segment them by demographics (age, tenure, gender, ethnicity, geography, formal education level, number of direct reports - you name it) you start to get interesting insights.

You never know what you may find. What if you found that your turnover was higher among ESL people? Or you weren't training anyone over age 40? Bringing these kinds of facts to the forefront should really raise your executive's awareness of what can be learned - and what actions (or further investigation) is warranted. This typically leads to more and more questions being asked, and pretty soon, you are into analytics without even "announcing" it.

One other thought is to hook up your executive with a peer in a different company that is doing analytics. Then you can just sit back and see how receptive your boss is. You'll know if you stand a chance with analytics!

Cathy Missildine-Martin, SPHR said...

Hi Bonnie:

Great to hear form you again and thanks for your feedback.

I like your suggestion about the executive and a peer. I can se how that would be a good education process for the executive.

Hope to see you in the coming year at another analytics conference!

Cathy

Steve Levy said...

Book a meeting with your CFO. At the meeting, ask two questions:

1. CFO, what metrics do you use to measure and track the health and wellness o the balance sheet?

2. CFO, can we partner to develop HR metrics that are based upon these business metrics?

Not an easy thing to do but a superior approach when one considers that in the end, (a) you'll have EVA-based metrics that are superior to the standard, used-for-decades HR analytics, and (b) your other business leaders will no longer accuse HR of being fluffy.

Cathy Missildine-Martin, SPHR said...

Steve:

Thanks for the suggestion. I like it!

That is how I got interested in metrics in HR in the first place. I reported to a CEO that really made me look at HR differently.

Thanks for reading and posting!

Cathy

Ade Adetukasi said...

Cathy,

Thanks very much for your response and the additional comments. It is really useful and practical.

Ade