There are two major opportunities for HR leaders to help drive both business results and improve the HR function through workforce analytics, according to an expert in the area.
The first opportunity for HR is in looking at workforce analytics from the perspective of how they intersect within typical HR process, from remuneration, learning and performance, through to talent, succession and retention.
“So for example, you could look at what the analytics are in performance, and how these relate to REM,” said Andrew Lafontaine, senior director HCM strategy & transformation at Oracle.
“That’s a really basic one and most organisations are generally looking in this, but it’s then about looking at analytics for performance, succession, risk or loss of talent in the context of the business.
“Questions you could ask include: ‘Over the last 12 months has our risk of loss materialised? What has that meant for performance? Where are we losing high performers? And where are we losing the people who we potentially weren’t that fussed about?’”
Lafontaine said not many organisations are doing this at the moment, primarily because the HR function is focused on a vertical approach to HR processes and most don’t have a reporting centre of excellence or someone who’s charged with driving workforce analytics.
However, if HR can start using workforce analytics across those business processes, then HR itself starts to become more effective around how the people agenda within an organisation starts to get managed.
The second opportunity for HR leaders is to take the analytics within these business processes and examine how they help overall business performance.
“So it’s not just about HR, but how these impact the business.
“So, for example, there might be a grouping of people with performance ratings of 5 out of 5 that have a certain type of profile.
“Using analytics to drive business performance is the Holy Grail for most organisations”
“Based on the analytics, we know where they come from, what schools they came from, how long it took them to get to a certain level of performance, who their line manager is, how they work best, and what their competencies are.
“And then we take the total talent profile of those individuals and then ask how we can use this and potentially start to recruit to this profile, for example.”
When companies start recruiting to the most successful performance-based profiles in the organisation, rather than recruiting to job descriptions, Lafontaine said this can have a direct correlation on how the organisation starts to perform.
In the process of improvement, Lafontaine said remuneration also needs to correlate with performance so that people are being remunerated in a way that is going to both retain them and guard against poaching.
“So HR needs to ask ‘which one of these profiles are most likely at risk of loss, because they are our high performers and sought by our competitors? What do we need to do to keep them?’”
This is probably the most important example of where HR can start to drive analytics to impact business performance – and not just drive a better HR function or a better business process, said Lafontaine.
Once HR understands how to impact overall business performance and lead with this focus, this is the springboard to predictive analytics around workforce modelling and strategic workforce planning for the organisation.
“Using analytics to drive business performance is the Holy Grail for most organisations,” he said.
“They all want to get there, but they need to start with the first step to really understand what’s happening within the HR business processes first.”
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