HR Analytics for business performance

Brief: Talent Analytics is about understanding and making sense of workforce data to make decisions about people with the aim of aligning people decisions to business strategy. This article attempts to analyze what is talent analytics, how it is different from traditional human capital analytics, and where HR people are required to turn their focus.

************************************************************

Talent Analytics or Human Workforce Analytics is the way by which data is analyzed to generate insights on meeting the complex needs of the HR and business challenges and thereby enabling high performance organizations. In the traditional HR role, the expectation was to somehow manage the people processes through insight and interpersonal relationships. Thus the complex understanding of organizational and human dynamics happens by a most subjective process of hearsay, observation and interpretation.

Though the field of Business Analytics has made great strides in the recent years, HR processes have not yet caught up to the task of analyzing these complex dimensions to make decisions on talent management, be it acquisition, development or retention. The typical tasks that would fall under these heads would be assessing capabilities, identifying leadership behaviours, predicting performance indicators or studying retention patterns. Leveraging on analytics would mean an improvement in workforce planning, alignment of organizational capabilities, improvement of business strategies and the like, all of which lead to improves organizational performance.

Companies like Accenture are taking the lead in defining what is human analytics and developing an approach that would help companies answer some critical people-related questions on what programs really drive better workforce performance, what organizational and talent levers impact performance and efficiency, how to retain top performers etc.Companies like IBM have developed Talent analytics software that provides insight into recruitment, learning, skills, succession and retention.

In understanding what is Talent Analytics, it is important to review what gets measured in the name of metrics related to human capital. HR managers take pride in estimating their employees cost of hiring, turnover rate, replacement rate, contribution to bottomline, all of which do not have much strategic importance. They are useful in managing people and information, not in creating value to the organization.

The shift that is required is from managing efficiency to creating effectiveness. To give an example, most organizations measure employee satisfaction levels or customer satisfaction levels. Providing this data to the top management is not enough if HR wants to be a strategic partner in managing the business. The next logical step would be to understand what type of management or employee behaviours influence this level of satisfaction, what is the level of increased aspired, hence what are the behaviours that are required to improve the quality of employee or customer experience and finally, what would be the impact of this increased satisfaction on the company’s performance.

And ultimately, employee and client satisfaction do not mean anything by themselves unless they result in business performance, increased market share and profitability. Talent analytics helps in mapping how well the workforce is meeting the needs of its business, how they are aligned to the vision of the business, to identify ways in which a high performing employee will continue to contribute to the well-being of the company.

For instance, Thomas H Davenport, in the HBR article “Competing on Human Analytics”, talks about how some companies that are very high on valuing employee engagement can precisely identify the value of a 0.1% increase in employee engagement among employees on the performance of a particular store or brand. The transcript of his interview relating to the article is found at http://blogs.hbr.org/ideacast/2010/09/talent-analytics-how-do-you-me.html

Talent metrics is the most objective way of measuring what brings value to the organization, in fact, more objective than employee performance measures. The role of HR in providing intuitive analyses and creative thinking will still be required, but rather than applying it on behaviour, they will be required to apply it on strategy.

HR goes the Technology Way!

Abstract 

A function that is all about managing the needs of people uses a significant amount of technology to service its need. This article presents the role of technology in the HR function.

Article 

Traditionally, HR was about managing people, but not any more. The magnitude of information that HR has to manage regarding people and processes can no longer be carried out without the support of Technology. Technology made its presence in HR in the early and mid 90s through the advent of ERP in taking over the administrative functions of HR. Overnight, HR professionals realized the value of technology in reducing the time spent on all forms of data management. 

The HR function has three important roles to play – Administrative, Developmental and Advisory.

HR Administration & Technology:  

The use of technology has virtually replaced the administrative part of HR, which is related to HR data maintenance, Wage and salary administration, Employee welfare activities like medical insurance etc. Through this, the efficiency of HR in managing business-critical information has increased manifold. 

Efficient payroll management applications have ensured accurate, efficient and timely processing of compensation. The ease of analyzing salary data has helped in making benchmark studies and offer the right kind of salary to high-performers. The latest use of technology in HR is the usage of the online employee self-service modules (ESS), which enable the salary and other data to be available to the employee at the click of a button. This ensured more transparency and less ambiguity in what has traditionally been one of the more confidential areas of HR. 

For example, a leading company in the travel and tourism industry uses technology to optimize business processes. In fact, they introduced SAP in all areas including HR and even won the prestigious SAP ACE award in 2006 for best SAP implementation in service industry. The company claims that IT has moved from being a support system to a Business enabler.

HR Development & Technology:  

In the role of a Development catalyst, HR focuses on the key areas of Talent acquisition, development and deployment. Here, the impact of technology is greatly felt in the areas of recruitment, performance management and training and development. 

Technology has revolutionized the recruitment processes – sourcing has been made very easy through online job portals. Data is available at the click of a button for both employer and job-seeker. Social media has also impacted HR operations to a large extent, which makes use of this opportunity to network with candidates and the HR community. In the area of performance management, technology has facilitated the analysis of historical data for effective decision-making. Past data on performance, potential and achievements makes promotion and fast-tracking decisions easier. And online and e-learning solutions have completely revolutionized the way HR plans, delivers and implements its learning and development strategy in the organization. Virtual classrooms have become the order of the day, and this has helped not only in maintaining global standards, but in keeping up with the fierce competition in the global arena. 

In fact, the business of designing recruitment software to manage the entire selection process has become a very profitable business. Known as RMS or Recruitment Management Software in common parlance, the tool is used for maintaining a resume repository, screening, contacting the shortlisted candidates, and also sends the candidate information to the regular HR MIS for offer letter generation and payroll.

HR Advisory & Technology:  

In the advisory role, HR is now empowered with enough information to guide top management decisions on business. This is very evident when we see that the latest trend in HR is Analytics or the management of business-critical information. Sophisticated methods are used to analyze complex sets of employee related information to make meaningful decisions regarding selection, placement, performance and retention decisions. HR no longer provides just intuition-based data on people trends, their propositions are backed by rigorous analysis of historical data. In this, Technology has become the backbone for HR decision-making. 

Technology has taken over HR management too, as it has every other function in the organization. When we analyze some of the downsides, we see that there is grave danger in allowing technology to replace some of the human-intensive processes, like employee engagement, employee management and potential analysis and grooming. This is more critical for HR than any other function because HR is the custodian of human processes in the organization. The danger that the HR manager faces is the substitution of analyses and objectivity in the area of employee engagement, where empathy and intuition are required to manage what is essentially human.