Moving people analytics out of the HR silo to include corporate partners
People analytics is now an important human resources sub-discipline alongside labour relations, compensation and employee development. This is the HR work that helps front-line and senior leaders make evidence-informed people decisions.
While all organizational success comes through its people, organizations are integrated organisms and leaders also require the financial, operational and systemic tools to bring about this success. HR cannot do this on its own. An integrated approach to analytics is essential.
Improving the skills, knowledge, competencies and motivations of employees is a major contributor to organizational success. In the private sector, investing in human capital through practices such as proactive safety programs and strategic workforce planning can be leading indicators of financial performance, according to the 2008 study “Toward a Human Capital Measurement Methodology” in the journal Advances in Developing Human Resources.
In the public sector, investing in people has seen improvements in employee engagement lead to positive outcomes in student grades and patient care, according to the 2018 study “Work engagement supports nurse workforce stability and quality of care: Nursing team-level analysis in psychiatric hospitals” in the Journal of Psychiatric and Mental Health Nursing.
Harnessing knowledge about employees is essential. And good HR analytics is about storytelling. The best human capital data is ineffective unless it drives discussion and action.
HR can bring the art of storytelling to ignite the emotion needed to drive action, according to the 2015 study “Data‐driven storytelling: The missing link in HR data analytics” in employment relations.
Numbers are not engaging — change comes when the stories told by the numbers emotionally engage leaders.
Leaders need to know what is broken (through performance reporting) and they need more than experiential evidence. They need to know what is working and what is not, and they need to know the evidentiary foundation on which they can base decisions.
HR, through an evidence-informed approach, can lead leaders to action. Data and knowledge is not enough. It is dangerous to think people analytics is the only tool leaders have to build success. Organizations are complex, interdependent organisms. And the decisions leaders make to improve their workforce are not made in isolation.
Financial decisions affect people decisions. Evidence-influenced approaches — people analytics included — are affected by IT systems and databases. Operational goals affect the workforce. People decisions affect all of these. An integrated approach to organizational analytics is necessary.
There is a human resources saying that there is only one front-line leader at the end of the funnel. That leader lives at the bottom of a funnel of operational and corporate information, programs and demands and is the single touchpoint on which organizational success depends.
This front-line leader makes decisions about people, dollars, capital and operations — and never in isolation. Therefore, the evidence through which they make their decisions should not be provided in an isolated, piecemeal manner.
To best support the front-line leader, HR and its corporate partners (including finance, IT, corporate planning and purchasing) need to work together. This can involve the following:
Build relationships: Without HR and its corporate partners working together, the front-line leader will receive a bunch of numbers from HR, finance and others that are at best confusing or at worse contradictory.
For example, finance data could show overtime costs are increasing while HR tells the leader that the ratio of overtime to worked hours is decreasing. Both could be right, but without the combined context, the front-line leader can be confused and ignore both stories. If HR and finance shared data and provided an integrated story, the front-line leader now has the evidence needed to make change.
Set up working groups: Talk to each other. Ideally, this would be a matter of course. But until the relationship is strong enough, set up monthly or quarterly meetings to share and discuss the analysis — including what story should be told to leaders.
Build tools: Once HR and others supporting the front-line leader decide what integrated evidence should be provided, build a common language and definitions.
An FTE to HR (an assigned or expected portion of a full-time position the employee works) can mean something different in finance (the total worked hours as a ratio of expected annual hours). Supporting quarterly reports or dashboards should be available at the same time to leaders.
Build storytellers: Expect and build HR to be the people’s storyteller. HR professionals usually do not go into HR because they are number people; but they can be storytellers.
There’s a ways to go before HR can provide leaders with the integrated people story, but the foundation is being laid. HR needs to keep building the analytic literacy and the relationships to support leaders this way because the leaders are getting it — they are asking the right questions, and they are asking for the story: the diagnosis, the prognosis, the prescription and the treatment.
If HR doesn’t become a leader, it will be left behind.
Organizations can build value through the effective, efficient and impactful attraction, retention, engagement and development of the workforce.
To achieve this, employers cannot be content with simply measuring human capital.
To see real returns on investments, organizations should be using a full continuum of organizational evidence.
This creates an analytics culture that uses strong evidence-based methodologies, according to The ROI of Human Capital: Measuring the Economic Value of Employee Performance by Jac Fitz-enz, and provides the information organizations need to know about what their workforce was, is and needs to become.
Human resources needs to position itself as the enabler and champion of a fully integrated human capital continuum. To do this, human resources needs to understand how to use people analytics and the analytics of its partners effectively, efficiently and impactfully.
If human resources does not take the lead role in integrated analytics, it becomes relegated to a transactional, advisory administrative function — not the strategic organizational leader it desires to be.
Tony Bennett is director of HR analytics and planning at Alberta Health Services in Edmonton. He can be reached at firstname.lastname@example.org.