Making Human Capital Analytics Work
Even though some organization leaders are making progress with their people analytics practices, there are many still asking the question, “How can I make analytics work in my organization?” While every leader approaches his or her practice differently, there are five pieces of the analytics puzzle, that when put together can help ensure that an analytics practice drives value.
Framework of Data
A framework of data is the foundation of any analytics practice and the projects undertaken. Frameworks represent a logical series of measures that reflect information valuable to all who consume it. For example, Dr. Jac Fitz-enz, whose founding of Saratoga Institute in 1980 put HR benchmarking on the map, suggests a framework that considers external and internal forces across organizational, human, relational, and structural capital.
ROI Institute’s framework represents a theory change based on the work of Dr. Jack J. Phillips. This theory of change includes data categories including measures of input, reaction, learning, application, impact, and ROI. i4cp offers a framework that includes efficiency, effectiveness, and impact measures.
Frameworks serve to:
- Align people investments with business needs – focusing on outcomes first
- Make meaning of the data generated through measurement processes
- Demonstrate value in terms that resonate with all stakeholders
- Offer information that can lead to process improvement
Whether you are building a new analytics practice or evaluating the impact of a specific initiative, process models matter. As renowned scholar and author Dr. W. Edwards Deming is noted as saying, “if you can’t describe what you doing as a process, you don’t know what you’re doing.” A process model shows step-by-step what needs to be done to achieve the outcome of interest.
Process models help:
- Communicate strategy
- Explain outcomes
- Maintain consistency
- Ensure efficiency
Standards ensure consistency in process implementation. They ensure that when a metric is reported in one context, it can be compared to another metric in a different context and have the same meaning. Standards help separate the wheat from the chaff, the right from the wrong, and the credible from the irresponsible. Today, the cry for standards among the people analytics community is louder than ever in the past. While standardization does not mean doing everything the same way, it does mean that we employ guidelines that support process and practice.
- Ensure the information we report is usable to the audience
- Support efficiency and effectiveness of the analytics process
- Increase the reliability and dependability of the information generated through analytics
- Enhance the credibility of the analytics practice and profession
A skill gap that exists in many organizations is the ability to report and communicate analytics findings in compelling ways. This goes beyond operational reporting and includes the ability to explain findings, trends, and opportunities (after all, ROI Institute/i4cp research shows that 67% of executive teams use human capital analytics data).
According to Buddy Benge, HR Service Center and Analytics Lead at Monsanto, and founding member of the i4cp People Analytics Board, “Clarity is one of the great differentiators between effective and ineffective analytics groups. Being able to succinctly and pointedly explain the data is just as important or more important than discovering it.”
Effective reporting requires practitioners to:
- Incorporate data from multiple sources
- Identify trends in data and predict future outcomes based on those trends
- Answer the business questions, compelling the audience to act
- Provide recommendation, answering the ‘so what?’ question
The real value of analytics comes when its complexity is no longer evident. When people don’t think about “doing analytics” they merely leverage analytics to drive business measures that matter.
Organizations that reach this level of integration:
- Conduct ongoing environmental scans, causal analysis, and predictions of potential outcomes
- Routinely assess skills and capabilities to ensure practitioners are maturing in analytics capability in keeping with the organization needs
- Leverage methodologies, technology, and governance to ensure efficient and effective use the information analytics avails to organization members
- Routinely evaluate programs and projects to determine if predictions were met and, if not, how to improve processes to better meet them next time
Making analytics work is not just a matter of dealing with data. It’s a matter of routinely incorporating a logical flow of information into decisions that drive business outcomes.
Given the five components above, in what areas do you need to improve most?
Patti Phillips, Ph.D., is the president and CEO of ROI Institute and Chair of i4cp’s People Analytics Board. She is also overseeing i4cp’s People Analytics Series, which kicked off in June 2017 and runs through the fall.