A guide to HR analytics
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Day two of the Human Capital Institute 2013 Workforce Planning and Analytics Conference in Atlanta featured testimony from three companies about their use of HR analytics. But Lisa Sullivan, vice president of workforce planning and analytics at publishing giant Pearson, was quick to remind the audience that in general, HR analytics initiatives are still in their infancy.
"When we were asked to speak at this event, I didn't think we had enough to talk about, because we weren't [done] with our journey," Sullivan said. She then asked for a show of hands from audience members who felt their workforce analytics campaigns were finished. When not a single hand was raised, she laughed and said, "I was hoping to get one hand up so I could hang out with you and get all the answers."
Although none of the presenters claimed to be experts in the field just yet, some recurring themes and lessons learned emerged throughout the day.
Getting started with HR analytics: What to measure?
Since analytics is a relatively new arena for HR, compared to analytics in other business functions, one challenge that HR managers face is not knowing where to begin. In the sea of metrics that HR can keep track of, how can leaders identify which ones "count"?
David Eberhardt, director of HR strategy and systems at Devon Energy, quashed the notion that meaningful HR metrics are universal. "What we're doing isn't for everyone," he said. "Go talk to [your] executive committee and see what's important to them and what the company strategy is, and then figure out what [you] should measure."
The same advice surfaced in a presentation by two HR leaders from Pearson on creating a global workforce planning and analytics movement. Liz Almeida, workforce planning and analytics manager, said Sullivan used Pearson's internal collaboration network to ask the organization's multiple HR executives which metrics they were interested in, allowing them to respond on their own time.
Robert Gibby pointed out, however, that even after metrics have been defined, it's critical to sync up the approach to measuring them. Gibby, global leader of the HR research and analytics practice at Procter & Gamble, said his organization created an "HR data dictionary" to homogenize practices. "Now there's a SharePoint site where we have a spreadsheet that lists all of our measures, our metrics, our dimensions and demographics in terms of how we can slice and dice the organization, and [it] tells you who the owner is in the company," he said. "That was important for our foundation."
But despite standardizing metrics internally, Procter & Gamble, which uses SuccessFactors cloud-based HR and talent management software, has not yet aligned its metrics to industry standards, Gibby said. "We've customized so many things, and that's really hurting our ability to leverage the benefit of going to Software as a Service in terms of benchmarking," he said. "Especially across geographies, we want to [see] how we're doing relative to others, and we can't do that yet […] so that's something to look out for."
To communicate HR analytics, tell a story
Presenters also stressed that to communicate HR analytics data to other business functions, HR leaders need to put it into context with a narrative.
"Data tells a story, so it needs to be presented like one," Devon Energy's Eberhardt said. He showed a sample of the HR analytics report that is distributed quarterly to Devon's executive team, and explained that each data point is presented alongside the historical number for that metric, as well as the target.
Pearson's Almeida expressed a similar opinion. "Data is abundant [but] if you don't give it context, it's just a bunch of numbers." She said the reports her team provides to Pearson's HR leaders include internal benchmarks to compare their business units to others in the organization.
Responding to an audience question about how to win executive buy-in for HR analytics initiatives, Eberhardt said that support comes after results are delivered, not before. "It really comes back to how credible you are," he said. "You get buy-in when you show up repeatedly with accurate numbers and you can relate the story to how the company's performing."
Building a strong HR analytics campaign requires time and resources
Another common thread among the speakers was the significant time and labor commitment required to get an HR analytics initiative off the ground.
Procter & Gamble's workforce analytics project started two years ago, Gibby said, and he called it a "huge initiative," partly because other HR processes were redesigned as well. In addition to a core project team of five HR people, employees from the operations and IT functions were involved in the effort, as well as senior executives, he said. The organization also enlisted the help of Accenture, a consulting firm, for system implementation and integration.
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Pearson's Sullivan said that although her manager asked her to start providing workforce metrics in 2002, it wasn't until 2010 that the data was truly in demand. "All of a sudden everyone wanted metrics, and that's when we realized we needed a bigger team," she said.
With a dedicated team in place, the effort began in earnest just last year. "2012 was [the] year to establish ourselves -- we started communicating to our HR business partners what we can do for them, extracting global data and redesigning reports," Sullivan said. She added that in general, steps along the path have taken much longer than anticipated.
Benefits of HR analytics make missteps worth the pain
With years of experience to reflect on, the speakers shared some lessons learned during their HR analytics projects.
Sullivan said she should have focused her training efforts more tightly. "We did a bunch of training on our metrics site," she said. "We trained everybody down to the lowest-level assistant, and they never used [it]. We should've just selected the people we thought would really benefit from the reporting and the insights."
Integrating data from disparate systems and functions was a common pain point reported by the speakers. Procter & Gamble's Gibby said that when he built automated reports, he enlisted members from other parts of the company to help align the data. "We actually pulled one person from finance into HR because of the linkage to all of the financial data, and that was a smart move in retrospect," he said.
But hurdles aside, the speakers said HR analytics projects have several important benefits, such as connecting HR more closely with the rest of the business and helping to make workforce decisions more strategic. "It supports decision making -- that's the reason to do HR analytics," Gibby said. "I don't think reporting's going to get you to predictive results, but it provides you a stable base to do that work."
Sullivan said she envisions HR analytics data gaining importance in coming years. "In 2014, we're hoping that workforce planning becomes embedded in the strategic planning processes, so it's not just a discussion about finances but also people," she said.
Emma Snider is the associate site editor for SearchFinancialApplications.com. Follow her on Twitter: @emmajs24.