Embedded in HR, analytics are helping enterprises become more strategic

The pandemic has confirmed how businesses with analytics capabilities have a real advantage, especially in HR

As the crisis has developed and changed, companies with data and analytics tools have been able to build scenarios and adapt their plans far more quickly than those relying solely on spreadsheets. When, for example, the UK government announced its furlough scheme, businesses with analytics had far more clarity on the impact of furloughing and un-furloughing specific individuals. This was true in all sizes of organisation, even those employing thousands of people.

Any business serious about growth needs to embrace analytics to gain advantage from their data – which is often far more extensive than they realise. With analytics tools, they can collate and analyse data to increase operational efficiency and inform strategic planning.

Business insights from data analytics technologies provide actionable real-time intelligence, making ‘what-if’ scenarios far easier to create and much more accurate than is possible with spreadsheets. They help move HR from a purely administrative role into a driver of business initiatives and decisions.

But where should an HR department start if it wants to embrace analytics? While most managers believe that data analytics, automation and AI are increasingly essential for business survival, they also acknowledge that there is a widespread lack of understanding to underpin it. An MHR Analytics YouGov poll of 500 HR leaders, for example, found 44 per cent of respondents do not currently have a main focus on ‘HR analytics’, or technology that uses ‘people data’ to solve organisational issues, even though they consider this to be vital to business operations.

HR specialists have much-valued expertise in people management and regulatory requirements, but are seldom experts in data science. They may struggle to convince their board that analytics transforms HR and generates far greater efficiency across the business. What they need, is a good business case.

Here are five steps HR departments should take on the path to building a convincing business case for analytics.

Formulate a plan

Identify where processes are slow, or reports are difficult to compile and require detail that takes days to complete. Often, organisations are still totally reliant on spreadsheets. These are the areas where analytics will make a transformative difference. Data can be pulled from business systems by analytics platforms, removing the time-consuming drudgery. Analytics enables HR to roll out results in a fraction of the time taken by manual methods, bringing a deeper level of insight which is necessary for critical decision-making.

HR could also show it is considering a longer-term plan for more advanced platforms, where analytics automates the measurement of a range of indicators on employee engagement, providing more up-to-date and accurate insights than the conventional approach using quarterly surveys. With the right technology, HR departments can go one step further and use predictive models for managing retention, flight-risk, payroll fraud, pensions or pay gaps. All have immense strategic value in the boardroom.

Start on a small scale

HR’s entry into analytics needs to start with a small project in order to show value and results.

It could be automation of spreadsheets, building a simple dashboard, or the collation of data for the next board report. Whatever the project, it should be enough to demonstrate how analytics can transform operations and planning in HR.

It could, for example, show how the business could save thousands of pounds by reducing absence. Emphasise how with analytics, workforce planning becomes more accurate, identifying costs and ensuring the right people are performing the roles that best optimise their talents for the organisation.

Spread the good news

The next step is to ensure the entire organisation gets to hear of the project.

If it makes the right impression, move on to a piece of work that will cut through at the top level. Retention, for example, is always a hot topic that triggers interest. Workforce analytics can make businesses far more likely to keep their employees beyond the two years that is the average period of time in one job.

In a demonstration of how this works, the HR department can gather retention data about people leaving, within its full data set for all current employees. Predictive analytics can be used to create a model of why people left, using variables such as date of last performance review or training course, revealing which contributes most to departures. This in turn enables prediction of which employees are most likely to leave, opening up opportunities for intervention to keep them in the fold.

The same goes for expenses fraud or mistakes – identifying who is overestimating mileage claims, for instance.

Be ready to change how data is processed

A quick word about the data. Data can be a problem if a business wants to expand its use of analytics tools. Data may be stored in different formats on a variety of legacy systems, making access and integration difficult. Lack of standards leads to sporadic, “messy data” with data-inputting inaccurate or inconsistent, leaving gaps.

To resolve this, an organisation may have to change the way it processes data, setting new standards and ensuring it is more highly valued. Improving data quality is all about creating an environment where data is treated as the genuine asset it is.

Select the right software

Rather than considering the specific capabilities or latest developments in analytics, focus instead on a provider that will address immediate requirements and can act as a strategic partner. It must also provide the necessary training. According to IBM, workforce analytics systems can make companies up to 66 per cent more likely to increase HR performance efficiency – without any extra headcount. As such, it’s clear that an upfront investment in these technologies can pay long-term dividends, both from a financial and an efficiency standpoint. In these uncertain times, this sort of safeguard is vital for ongoing business confidence.

The future of workplace analytics

As we enter the period of post-pandemic recovery, where businesses are having to accelerate digital transformation, HR departments need analytics. From reporting, to creating new what-if scenarios, reducing absence and fraud, predicting flight-risk or showing the impact of restructuring on pensions, data analytics is essential.

Once embedded in HR departments, analytics technologies will help businesses gain a competitive edge – reducing time-consuming drudgery, engaging workforces and strategising for the future.

About the Author

Laura Timms is an HR analytics expert at MHR Analytics. MHR Analytics is a specialist provider of business intelligence and analytics solutions. Our suite of solutions offer an end-to-end service that transforms complex data into useful insights. We help our customers go beyond intuition and make decisions based on hard-evidence, sharpening their competitive edge and helping them to stand out from the crowd.

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