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Using Analytics to Improve HR Functions Growing More Common

This month’s edition provides an in-depth look at how technology is easing the workload for HR Professionals. Here are ways HR professionals can utilize evolving technology to improve hiring, staffing, employee morale, onboarding and other management tasks.Online reference checking tools

The opportunity for HR leaders to move beyond the limits of traditional “lagging metrics” of the past 40 years and start using forward-looking tools and analytics has arrived.

Although metrics on “time to fill” and “costs per hire” provide useful data, they do not provide strategic data. And although they identify costs already incurred, they do not provide any value-added information.

According to Robert Finnis at MindTree Ltd., HR analytics provide business leaders with insights into not only how something happened, but also what’s most likely to happen in the near future.

It extends what HR can measure beyond the cost aspects of traditional service-delivery and transaction metrics. Analytics apply recent advances in decision science, pattern recognition and statistical analysis to push the scope of analytics to measure intangibles such as leadership, corporate culture, employee loyalty and knowledge management   not as static metrics, but as leading indicators to predict future business outcomes.

HR executives, and especially their business partners, cannot ignore the fact that employee costs can be anywhere from 20% to 70% of corporate expense. Learning to measure the return on investment (ROI) in human capital becomes essential, and requires detailed information on employee-based activities.

CEOs, executive management teams, and even boards of directors are all asking HR leaders to be strategic business enablers. This transformation requires a new means of thinking within HR and in some cases, even changes in leadership, as more and more businesspeople are finding new careers in HR.

Successful HR professionals are learning how to correlate data from various sources such as: performance management, compensation, attrition and retention, succession planning, recruitment and training, to ensure the alignment of HR strategy with the overall business strategy. Correlating multiple data points allows HR to answer questions like:

  • Do we know who our top performers are, and do we have succession plans in         place?
  • Who are our most critical employees, and are we keeping them?
  • What recruitment channel(s) have our key performers come from?           
  • Are we getting ROI on our training?

Career-minded HR professionals also need to expand their companies HR analytic strategies to leverage key trends such as the multi-generational work force, the rise of social media, virtual working, mobile technology, a global and distributed work force, viral recruiting and outsourcing.

It’s no longer enough to measure just the productivity of the HR function. The strategic HR professionals need to use analytics to measure how well the enterprise is utilizing and optimizing its investment in human capital.

Finnis demonstrates how analytics can benefit a company by citing the case of one client, a U.S.-based manufacturer with a global work force and which sells its products all around the world. The company’s top two strategic initiatives are increasing sales and opening up emerging markets in the Asia-Pacific region.
MindTree was hired by the HR department to analyze data on a number of factors to see what the people gaps would be in realizing the business strategy. The good news was the company had great data. The bad news was:

  • Performance data revealed the lowest-performing organization in this company was the sales team as compared to other functions (R&D, operations, service, finance, etc.).
  • Tenure data revealed that many in the sales organization were older and nearing retirement age.
  • Performance data revealed the highest performers in the company were based in Singapore, which was the hub for their Asia-Pac sales, but attrition data and succession-planning data revealed that the highest employee turnover was happening in Singapore and that no successors were in the system.

So, how could this company achieve its two main goals of increasing sales and penetrating emerging markets in Asia-Pac if it has a sub-performing sales team and was losing all the talent in its most critical office? The biggest revelation was that no one knew that this was happening.
This is the power of HR analytics. This company now can move to rectify things and get growth back on track. This is also a great example of proving the ROI on HR.


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