Analytics, supported by digital technology, are the bedrock that helps enable you to make better, quicker and more informed decisions that are aligned to your business strategy. Human capital analytics deliver critical insights about your people, their preferences, what makes them more effective and their contribution toward the success of the business. This is an opportunity for HR to develop innovative solutions, built on technology and analytics, across all HR process areas to help you answer questions like: Across all functional areas of HR, what is our headcount and what skills do we have by geography/ business unit? What skills are in demand, where do we have skill gaps and what are good options to close those gaps? How can we optimize our total rewards to improve talent engagement and retention?
Next generation business intelligence tools enable automated real time reporting with both descriptive and predictive analytics, delivered through cloud platforms. The costs to deliver analytics is significantly lower than what was feasible in the past. This is an important competitive advantage for leading businesses globally and has changed the role that HR has in developing and delivering the business strategy.
Data and integration "will be king"
The use of data to produce business-relevant insights that lead to action, has been recognized as the new step change for HR.
Increasing interest of senior management
Up-to-date information about employees and related external factors can be used to make business decisions and mobilize talent if strategies change.
“War for talent”
Recruiting, developing and retaining talent is more important than ever. There is a need to understand your workforce more in depth. Data analytics can provide detailed people insights and help organizations to build a strong workforce to deliver competitively differentiating capabilities.
Analytics could make HR a strategic business partner by moving from historical analysis to predictive analysis. Forecasting what’s likely to happen, what are potential risks to the business from a talent perspective, and what talent decisions will likely mitigate these risks, can help improve business performance.
Key Steps in Building an Analytics-Driven HR Organization
First, conduct a strategy assessment and identify areas that would benefit most from HR reporting and analytics. Understanding the link between talent decisions and business outcomes is key to build a business case for HR Analytics.
Once the assessment exercise is complete, the outcome is usually a set of use cases that are prioritized based on importance to the business and complexity of deployment. This leads to a roadmap with a defined set of actions for near-, mid- and long-term consideration:
Data Requirements – Determine the type of traditional and non-traditional data sets required, and the best methods to source, integrate and store such information with minimal manual effort.
Technology Requirements for Reporting and Analytics – Select the preferred analytics technology options available based on your specific requirements.
Operating Model for HR Analytics – There are different ways of organizing analytics teams. To make analytics a real and integral part of your business decisions requires a robust and well defined operating model.
A critical step in building a business case for analytics is a targeted proof of concept exercise to demonstrate how HR analytics can deliver value to the business, how HR can adopt analytics at scale, and the potential ROI on that investment.