There was a time when Human Resources was seen as the purview of managers who had the “soft skills” to deal with people rather than widgets. But as one of the largest expenses on the company balance sheet, HR is under growing pressure to quantify the return on this huge investment and make data-driven decisions that improve the entire business.
“Human Resources cannot be a strategic partner if we are not talking the language of business and that’s data,” says Christine Geissler, Vice President & Chief Human Resources Officer with KERRY North America. “HR needs to help drive strategic business decisions, align with the overall business and impact the bottom line.”
Effective metrics that tie how an organization is leveraging its people to improving overall company performance is one way to do that.
From tracking to analysis
HR departments have tracked basic metrics for years, such as employee turnover. But even that has been given an overhaul. “Today, our goal is not to collect data but to use analytics and insights in a predictive way,” Geissler says. “If you’re going to track something, you have to be willing to do deep dives, to really understand it and then build plans around those findings.”
By digging deeper into turnover statistics, for example, a company might learn why people are leaving and, ultimately, predict where the greatest turnover is likely to be in the future. You might even find that turnover in part of the company is too low, suggesting a possible lack of innovation in an area not receiving an inflow of new talent. Or those findings might send up a red flag that a large number of people in an aging department might all leave at the same time.
“If you just track the turnover number it gives you one story,” Geissler explains, “but effective analytics help you ask the right questions to get the insights behind the data.”
Questions are key
The secret weapon Geissler relies on to help turn data into valuable insights is a strong analytics partner. At Kerry, that’s HR Analytics Manager David Summers. “Within three months of bringing David on at Kerry, the entire executive team wanted one-on-one meetings with him and we wondered how we survived without him,” Geissler says. “He asks the probing questions to make sure we fully understand how we plan to use data before we set out to collect it.”
“This is a key point to meaningful data,” Summers explains. “It all starts with figuring out what we really want to know. Then we can really drill down into the information to identify areas of focus that will enable us to build action plans that impact KPIs. And, if we can take the numbers and combine them with descriptive analysis to make an informed leap to diagnostic and predictive analytics, now we have real insights to change how we tackle a problem.”
One way to do that is to search for correlations and patterns. “Being able to correlate information and socialize the insights in the organization enables us to impact critical decisions in the business,” Summers explains. That’s the ultimate payoff — providing critical information in ways that facilitate new ways of doing business.
Using HR Metrics Strategically
From the Society for Human Resource Management (SHRM)
- HR metrics might show how efficient and effective an organization’s HR practices are but talent analytics focus on decision points and guide investment decisions.
- Go wide before going deep. Start from the business strategy and work your way back to a meaningful HR metric that will actually inform business decisions.
- Build the business case for HR initiatives by connecting them to organization goals and teasing out the workforce-driven components of business-wide metrics.
- Don’t settle for poor data quality – only data that is consistent, accurate and reliable and can be cost-effectively collected and used is worth the investment.