Building Workforce Analytics

Gaining Buy-In From the C-Suite | Human Resource Executive Online The top challenges facing HR executives when trying to build their organization's workforce analytics capability are outlined by an expert in the field.

Thursday, October 2, 2008
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If HR executives are trying to build their organization's workforce analytics capability then they already "get it;" that is, they understand the immense value that can be generated by properly utilizing data within HR technologies.

Even when HR executives do, in fact, "get it," do they have the ability to "sell" this value to other executives? This is required, as executives in operations, finance and other departments, along with HR itself, will be the primary customers of workforce insight, the product of workforce analytics.

The irony here is that experiencing workforce insight firsthand will determine whether or not they want it on an ongoing basis. So, how can an HR leader get those first one or two deliverables created and communicated in ways that generate enthusiasm among other organizational leaders?

Herein lies the challenge for most HR executives: They've heard the stories and read the case studies of leading companies using workforce-related data to improve the effectiveness of attracting, hiring, developing and retaining talent, or how talent impacts desired business outcomes such as sales and profitability. They may have even experienced the positive change such insight can inspire.

The trouble is, how can the ability to perform workforce analytics on an ongoing basis be created within their organization?

In my experience, I have observed six key challenges that need to be overcome in order for an organization to repeatedly generate workforce insight. They are:

* Providing quality data and clearly defined metrics;

* Generating the initial deliverables and exhibiting their value;

* Understanding the requisite processes -- and time -- required to generate meaningful insight;

* Understanding the technology requirements, limitations and possibilities;

* Commanding the resources (internal and/or external) and appreciating their capacity; and

* Packaging and communicating insight in exceptional ways. No ordinary deliverable.

Notice, there is only one point listed that refers to technology. Creating a workforce-analytics capability is not fundamentally a technology solution. In fact, despite what you might hear from many vendors, technology plays a relatively minor role.

There are many technologies that can do the job. What proves to be significantly more important are the people and process challenges around aggregating and analyzing data and, in turn, packaging and communicating the insight.

Providing quality data and clearly defined metrics.

This is square one. The data has to be good, yet not necessarily perfect. It has to be credible so customers of the insight don't greet it with cynicism. This, obviously, would undermine the whole process before it really got started.

The most critical point is consistency. For example, turnover should be calculated the same way throughout the study and should ideally align with the way it's calculated in reports. If there are conflicting metrics at the outset, then getting leaders to focus on the patterns, trends, and relationships -- the content that's truly important -- will be unnecessarily difficult.

While generating consistent headcount, turnover and other measures and metrics may be challenging, I do not believe the lack of perfection should inhibit a leader from embarking on a workforce analytics strategy.

The key reason is this: Analytics, itself, can provide the impetus for applying more rigor to metric definitions and data management and collection processes. Without such an impetus, there is a danger of having poor processes persist because there's little reason to improve them.

Analytics provides that reason, and sheds light on the opportunity cost of not having better data and more clearly defined metrics.


Generating the initial deliverables and exhibiting their value.

As mentioned, leaders in HR, operations, finance, etc., are the principle customers of workforce insight. Understanding their information requirements and building insight to fill these requirements is essential. After all, if you don't have eager customers, then why create a product?

Create the demand first; learn, then concern yourself with how to supply the product on an ongoing basis. Do not create workforce insight and hope it hits the mark.

All too often I have seen HR groups do this: They generate what they think is a game-changing insight when, in fact, leaders outside HR don't "get it" because they didn't want it in the first place.

Only a handful of times -- if that -- have I seen insight so powerful and compelling that leaders took notice and acted upon it when they didn't know what was coming; and in these occurrences I believe luck played as big a factor as any.

When insight is most successfully utilized, it is when leaders have expressed the desire to learn more about a certain topic and had an expectation around the deliverable and its timing. This sets clear expectations for those doing the work, while providing a platform to deliver tangential findings that add to the core story. 

Clearly understanding the processes -- and time -- required to generate meaningful insight.

You're reading it here: Generating workforce insight is not extraordinarily difficult. What it takes is focus, skill and commitment from executives, an operational team and a technical team. What is very unfortunate is that, in most organizations, one or all of these teams fail to fully execute their role.

Executives need to outline information requirements and understand that one to four deliverables per year that can help focus thousands if not millions of dollars of investments, or thousands of hours of employee time, is worth outlining, investing in, waiting for and acting upon.

An operational team -- those guiding the work and packaging the deliverable -- needs strong business knowledge, research and communication skills. The technical team needs to understand how to accurately aggregate data and then perform the most appropriate analytic technique for the business question being addressed.

If these roles are clearly understood and executed upon, then a big hurdle will have been overcome.

Understanding the technology requirements, limitations, and possibilities.

Many HR executives get hung up on the mentality that "We're not there yet." We can't even report accurately and efficiently so we have to wait until we get that right. Allow me to respond with a technical term: Phooey!

In fact, I am a firm believer that workforce analytics should precede a robust dashboard or enhanced reporting process. Why? Because once such dashboards or reports go out, how are leaders and others going to respond? They'll likely say, "What is this telling me?"

In the absence of an answer, confusion occurs, inaccurate assumptions are made and sub-optimal decisions become likely. To combat this, workforce analytics can be done as a series of projects, projects that do not necessarily require the presence of an integrated data warehouse (a common misperception).

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Analytics can be done in a variety of solutions that likely reside within an organization already: spreadsheet software to business-intelligence tools to statistical software. Once this perspective is achieved, HR leaders become very liberated insofar as they see workforce insight as being much closer to being achieved than they had previously thought possible.

Commanding the resources (internal and/or external) and appreciating their capacity.

The range of professionals involved in the workforce-analytics process is long when compared to other reporting processes. It involves technologists, research analysts, industrial and organizational psychologists or statisticians, communication professionals, and potentially others.

Identifying and organizing these individuals -- whether they are internal or external to the organization -- is often difficult. Also, for some in the process, performing workforce analytics cannot be a part time job. To the contrary, for some, such as a research analyst, it's a full-time job.

As such, multitasking is not an option. Most companies do not get past this hurdle. What they do is skimp and make generating workforce insight people's part-time job. This is impossible. It won't work, at least on an ongoing basis.

Contrary to what most corporate jobs are all about, those performing workforce analytics should not, can not, be measured by sheer number of deliverables. What they need to be measured by is the depth and quality of the insight.

For example, when submitting a turnover report that shows 30-percent turnover for the past year, an executive might say something like "So what. Is this good? Bad? What does it mean? What actions might I take and if I take them, what will likely be the return?"

Analytic deliverables answer these questions and others like them. For such deliverables to be created, however, leaders need to appreciate the nature of the work and the significant focus, time and effort it takes to create them.

Packaging and communicating deliverables in exceptional ways: No ordinary deliverable.

If the other challenges have been met, one high hurdle still needs to be overcome towards the end of the journey; that is, placing the insight into a compelling, meaningful and actionable story.

Many professionals who perform the mechanics of workforce analytics -- data aggregation, statistical analyses, etc. -- are often ill-equipped to package the deliverable into an engaging story that elicits a positive emotional response as well as a positive cognitive one. Further, communicating the insight in a presentation and through prose is often underappreciated.

Insight does not stand on its own. It is merely a product that needs to be sold like any other. If the packaging and communication is done well, then leaders will not only buy it; hopefully, they will actually use it instead of letting it sit on the shelf. Professionals from marketing, communications and training departments are often good partners to help with this challenge.

In the end, analytic deliverables -- insight -- answer fundamental questions about how the workforce delivers value to the organization. It takes leaders from "thinking" they know to "knowing" they know, at least to a much greater extent.

This increases their sense of control, which elevates confidence, reduces anxiety and improves decision quality. Ultimately, leaders can then allocate scarce financial and human resources on those activities with the highest probability of achieving desired business outcomes.

This is a compelling value proposition for sure, and one that is only a few challenges away from being realized in your organization.

Al Adamsen, founder and managing partner of People-Centered Strategies LLC, consults in the areas of talent management, leadership development, workforce analytics and workforce planning. Prior to founding PCS, he worked with leading companies such as Charles Schwab, Ernst & Young and Gap Inc.

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