HR Analytics: Seek And Ye Shall Find
Did you know that cynical and disgruntled employees are likely to decrease team productivity by 40%? Are you aware that a 0.1% increase in employee engagement resulted in Rs.65 lakh incremental annual revenue for a mid-sized company? Or the fact that you can predict how many new recruits are likely to quit within the first 6 months, if they excelled at individual sports during college days. Welcome to the mystically bewitching yet befuddling world of HR analytics; known to all, understood by few. “In God we trust; all others must bring data.” Little did W. Edwards Deming know that his off-the-cuff remark would become the mantra by which businesses operate in the future.
If information is touted as the oil of the 21st century, then analytics is indisputably the engine chugging it forward. Data analytics has become so pervasive in business circles that the term is becoming hackneyed, with savants proliferating everywhere. Core business functions are embracing and harnessing the power of analytics to great effect, but data analytics is to HR what a comb is to a balding person. In recent years, we have witnessed technological innovations fundamentally disrupting and changing the way our clients operate, but the HR fraternity has been sluggish in reinventing itself. Data analytics holds the key for HR to justify its seat at the table and progress from a support function to a valued business partner.
HR analytics must be viewed across three primary areas: data management, interpretation of data, and implementation of actionable insights emanating thereof. The first base is already covered with most HR functions deploying either rudimentary or sophisticated HRMS solutions nowadays. The real treasure trove exists in the mining of employee-related data that gets churned out voluminously. For starters, recruitment provides enough fodder for analysis. Meaningful analysis of candidate data, coupled with correlation against background data available for existing high performers, can predict good quality of hiring, thereby improving effectiveness of recruitment and limiting future attrition. HR analytics decode the enablers or motivators for productivity, engagement and retention so that the success of few can be replicated across many.
We recently consulted with a large-sized organization where we put this theory to test and crafted ideal candidate profiles across job families; the resultant outcome was a 6% dip in early attrition. Analytics is taking the guesswork out of manpower planning and provides early indicators of shortage or excess of key competencies and capabilities within teams. Predictive analytics help tide over volatile business cycles and support strategic HR initiatives. Rigorous data analysis and integration with succession planning is ensuring human capital readiness for the future. All of this is possible only if HR professionals maintain high quality data and are willing to understand business a bit better to contextualize the data into business solutions. Knowledge of statistical modeling is useless if we don’t know what are the questions that we ought to be asking of the data. And that brings us to the final weapon in the arsenal – problem solving approach to decision making.
The success of HR analytics is inextricably linked to HR leaders acting and implementing in line with the findings, while eschewing their traditional beliefs or gut instincts. Building a winning team for tomorrow starts today, and data analytics will guide HR to stay ahead of the curve.
Article Written By: –
Upohan Management Consultants