Modern technology has brought our data capabilities forward immensely. Consider what most sales and marketing departments are up to – big data is playing a big role in the go-to-market strategies at most companies. After all, decisions based on data tend to be much safer than hazarding a guess.
The same can be said for the HR department, although HR Analytics is an area that is only more recently being mined. For forward-thinking companies who want a competitive advantage, the use of people analytics is proving invaluable.
This begs the question, what if your company is starting from scratch with HR Analytics? How can you build up your capabilities so that you can take advantage of this technology?
Steps to building HR Analytics capabilities
Just for a minute here, let’s talk about culture. If HR Analytics is something totally new to your company, then the chances are you need to work on building an analytics culture.
What does this mean? It means embracing the role that analytics plays in enabling better decision-making. It also means that looking for ways data can help becomes a norm within the HR department, not a one-off initiative – just as it is in other organisational departments.
Your HR Analytics capabilities won’t spring up overnight, but you can establish the strategic intent and roadmap to bring the HR department up-to-speed. Developing your capabilities will help to enforce the intent of an analytics culture.
Here are a few steps for building HR Analytics capabilities:
- Start with a mix of careful new recruitment, as well as upskilling of current staff. HR Analytics requires a good balance of analytical and statistical skills, along with HR knowledge. You can look for HR professionals who have skills with R programming, while seeking to upskill current staff.
- Be prepared to invest in training and new IT tools, especially open-source tools. R is a great example. I love to use it because it enables me to do more things with data than other programs have (for example, Excel).
- Allow staff time to experiment. The only way to learn and improve is to be able to practice and experiment. There are sample datasets available online that team members can use, and free resources for learning, such as those found here.
- Identify areas of governance for HR Analytics. Deloitte says:
“One key is to identify how analytical decisions are being made in your organization currently. Another is to determine who should be accountable for facilitating the analysis and leveraging its insights. A third is the need to create consistency and consensus around data definitions. Without a shared understanding of the data, including source and context, the analytical output may be questioned by the business.” - Know where your data is coming from and invest in getting the management part right. This means having a data governance policy, having a clear definition of what the data is and having clear KPIs for HR. Ensuring data quality and integrity is vital for getting accurate results.
- From my observation, it is better if senior management remain available to give guidance, but otherwise allow the HR Analytics team to work together. Allowing room to test ideas and learn tends to develop better analytics practitioners, especially if they aren’t under pressure.
- Participate in HR Analytics or People Analytics conferences. One caveat here – I’ve found it does need to be an active participation, rather than passive. By active participation I mean presenting your own pain points, collecting ideas, asking the knowledgeable leaders precise questions, and any other engaged activity there.
- Being constantly on the lookout for new tools and willing trying them out. It’s important to test, then filter out the most useful ones and demonstrate them to senior managers.
In my position I am contacted twice a month about new tools. There is a real explosion of new tools in the HR space. Most of the time those tools are stand-alone tools, however in my view to be successful they need to be working in conjunction with other existing HR tools. The interfaces are key. - Develop a culture of rapid prototyping of new ideas. One of the great things about working with data is that it is possible to quickly test ideas.
- Bring in consultants and allow them to do some work. This can be a great way to get an outside perspective and get new ideas, however the organisation needs to have done their homework on any consultants first, to ensure they’ll be a good fit.
HR Analytics requires a good balance of analytical and people skills Click To Tweet
How to build your HR Analytics skill set
Once you’ve set the foundation for growth of HR Analytics in your organisation, it’s important to continue to build and develop the skill set.
A great place for HR teams to start is by providing a series of smaller services to the rest of the organisation. For example, you might offer data visualisation, statistics, reporting, data extraction, automation, or elaboration. These are all areas that are great as starting points and can be built upon later.
In tandem with this, the HR team should check what data is available in the organisation and what is lawful to do. For example, privacy concerns are important to understand and manage.
It can be a valuable exercise if you’re able to interview knowledgeable subject matter experts too. These may come from either within or outside of your organisation, and may have some intuition based on their own experiences about what is worth analysing. The idea with HR Analytics data is that you need to be able to identify a business question from the data.
Lastly, a huge part of successful HR Analytics is to have an excellent knowledge of how your organisation provides added value and how this can be improved. For example, how does your organisation currently make hiring, training or succession decisions? What might you be doing differently if you have good data available?
Mastering HR Analytics
I’m sometimes asked what it takes to successfully master HR Analytics. After all, most of us who now practice in the field began with only a little knowledge of how it works.
The key traits or skills I have identified are these:
- Being a fast learner. Data can be vast and complex, while analysis involves understanding how to use tools and mathematical models. It definitely helps if you have some background in statistics or analysis, or can learn quickly.
- Being willing to experiment. As is the nature of experiments, not everything will work out. Sometimes you will spend a lot of time testing a theory or trying to find a business question for the data, but it may not work. A willingness to try, even if it doesn’t always bring results, is important for learning.
- Having a balanced mixture of skill sets. One of the challenges of HR Analytics is that it is a blend of two traditionally very different roles. On the one hand, an HR practitioner is traditionally someone with the ability to be socially engaging and generally relate well with people, while on the other hand, someone working in data analysis usually has a stronger focus on their analytical skills. The best HR Analytics practitioners have a mixture of skills that help them to gather more insight.
- Having good presentation skills. You can say that your analysis will only be as good as the data you have, but also, that analysis is only any good if it results in some kind of action. Within companies, this usually boils down to your ability to present findings convincingly. An HR Analyst has to understand some complex data points, but they also need to be able to boil analysis down to what really matters to key decision makers. So essentially, you need to present data and findings in a way that is easy to understand and make decisions from.
Final thoughts
Building HR Analytics capability begins with instilling and reinforcing an analytics culture. Sales, marketing and other departments are using big data for decision-making, and HR has the opportunity to make a difference.
Developing strong skills involves bringing in the right expertise, as well as giving team members the space to grow. An environment where experimentation and learning is encouraged will help that growth to emerge more quickly. The bottom line is that you can build HR Analytics capabilities by identifying key development areas and devising a defined strategy.