Workforce Analytics 102

Presenters at upcoming conference pick up where one left off last year -- giving attendees the "starter's" advice for computing HR data and metrics that they're clearly clamoring for.

Wednesday, July 24, 2013
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Workforce Analytics has emerged over the last five or so years as a critical element of an organization's workforce and talent-management programs. Making more data-driven decisions, having the ability to match talent with opportunity, being able to leverage the organization's people capability to support business strategies -- these advanced practices are only possible with a deep understanding of the organization's people and their impact on the business.

Analytics tools and approaches are increasingly being used by HR leaders to enable these important initiatives. In fact, this area is so critical to HR today, this year's HR Technology® Conference is dedicating a significant portion of its program to these topics.

In advance of the conference, slated for Oct. 7 through 9 in Las Vegas, conference Co-Chair Steve Boese spoke with Mercer's Brian Kelly, partner and global leader of workforce analytics and planning, and Julia Howes, principal, both of whom will be featured presenters. Kelly and Howes, both leading subject-matter experts in the area of workforce analytics, will co-present a conference breakout session titled "Abandon Guilt, All Ye Who Enter Here! A Starter's Guide to Workforce Analytics," a reprise and update of Kelly's 2012 presentation. In the session, they will dive more deeply into the concepts, strategies, and technologies that HR leaders can use and are using to better understand their workforces, to align HR strategy with business strategy and to help achieve their organizations' business objectives.

Brian, last year at the conference, your session -- "Workforce Analytics 101" -- was the most popular breakout session of the entire event; and, based on the attendee feedback, one of the most well-received as well. Why do you think the topic of analytics, particularly a "starter's guide" to the topic, has been resonating so much with HR leaders?

Kelly: Wow, that's great! I'm pleased the session received such a positive response. I am not surprised that a large number of attendees were interested in learning about metrics and analytics, and specifically interested in better understanding some of the foundational concepts in starting such a program.

I believe we are at the tipping point [when it comes to] metrics, analytics and workforce planning being a core business process -- not just a "special project" -- at all organizations. I personally see this type of momentum in conversations we have with companies every day. Some organizations are pushing to finally launch a program, some have started a program but are not yet seeing desired results, while others have more robust programs but are always interested in brainstorming new ideas.

Howes: I think most organizations understand that they can better manage, engage and retain their employees if they apply data-driven decisions to the process, and they are ready to make a real investment in metrics and analytics. However, many organizations are struggling to understand the best way to do this. What is workforce analytics? How is it different from basic reporting? How do I get my data into a format that is appropriate for analysis? What measures should I focus on? How do I present analysis to my stakeholders to ensure that they can use the data to drive decisions? Should we be conducting predictive-analytics [projects]? These are all difficult questions, and it is easy to get lost in the noise.

What are some of the common barriers or difficulties that HR organizations are facing when they attempt to incorporate analytics into their practice? Which of these barriers are "real" (lack of data, systems that don't support their analytics goals) and which ones might be more self-imposed (failure to prioritize these projects, tendency to not know the right data to be collecting and analyzing)?

Kelly: Steve, I'm glad you brought up the topic of data -- lack of data, quality of data, systems that don't "work," etc. I can tell you that, in my many years of doing this type of work, I have heard the "data" excuse too many times -- and I just don't buy it. Every organization can improve its data governance and quality processes, but [organizations] should not use that as an excuse to not move forward with an analytics initiative.

In fact, I would argue that, only by moving forward with such an initiative will an organization understand how to prioritize which data clean-up efforts will deliver value. Think about it -- organizations have spent millions of dollars over the past decade purchasing integrated talent-management systems and are now afraid to use the data within the systems? It just doesn't make sense to me; if an organization pays its employees on time and in the right amount, [it will] have enough data to get started with an analytics initiative.

Howes: I completely agree. One of the biggest challenges we see is when organizations focus on one data source only (usually their human resource information system), and they have a desire to get that data source absolutely perfect and clean before they begin analysis. Then, after they spend all of that time and effort, they begin analysis and can be overwhelmed by the insight they get compared to the effort they have put into the process.

Instead, we recommend that organizations start with the critical workforce issue that needs to be answered and consider what data (often from different sources) is needed to answer that question. Focusing on a few data points from multiple sources is usually far more effective and valuable. It is also important to think about the analysis in phases and to think of the actions we are trying to drive by the analysis. What level of data accuracy is needed for that action? It is often different, depending on the critical workforce issue, and the decision maker.

In your conference session, you plan to talk about some of the fundamental and foundational concepts that are necessary when approaching workforce analytics. Without giving away all your secrets here, what are the first two or three things that HR leaders should think about and consider when launching what might be, for them, brand new analytics initiatives? Are there internal skills and training needs to consider in order to better equip their HR teams for these projects?

Kelly: One of the things we feel strongly about at Mercer is that the process of using metrics and analytics is like a journey; there are a variety of steps that each organization needs to go through and this process may take some time. We typically see seven steps in [what we call] this measurement continuum. [See graphic.]

These days, everyone wants to get to "predictive analytics" right away without building a solid foundation to conduct such analysis. The first four steps of the continuum constitute that foundational aspect of workforce analytics -- they tell an organization "what" has happened. The final three steps of the continuum really get to the more advanced analytics area and tell an organization "why" certain things are happening. More advanced statistical modeling techniques are required in this area of the continuum -- and these are the skill sets that are not resident within a typical HR function.

Analytics is both a challenge and an opportunity for organizations; organizations do, indeed, need to develop greater analytic capabilities to do more advanced analytics; however they have some time to develop this capability. I like to encourage organizations to share this continuum, this journey, with their C-suite and leadership teams to set realistic expectations for the impact of analytics.

One of the most common recommendations given to organizations that are thinking about how they can better use data to make business decisions and improve results is, "You have to know the right questions to ask." Sometimes, that advice seems easier said than done. In the context of workforce data, what are some ways that HR leaders can determine the "right" questions to ask from their workforces and ones that an analytics-based process can help to answer? Are there some standard or baseline metrics that all HR leaders should be collecting and monitoring?

Kelly: Virtually every organization wants to know if there are certain "magic" metrics or a cheat sheet of metrics that can accelerate their analysis and yield business impact more quickly. The fact of the matter is there are no "magic" metrics -- but there are certain key areas that organizations can focus on and certain frameworks they can apply that tend to yield greater insights and results.

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Let's start with areas of focus: Mercer feels strongly about the concept of internal labor markets, how organizations manage their internal labor pools to help achieve business results. Significant and meaningful insight can be derived by focusing on how labor -- talent -- comes into an organization, moves through the organization -- via promotions, demotions, lateral movements, etc. -- and exits the organization. Each organization will find that its internal labor-market "map" is different, and in-depth analysis can yield meaningful results.

With respect to the question of which metrics [to pursue], we tend to think of metrics not as individual measures without linkage between other measures. Rather, we think about an overall framework for analysis. By applying a lens of determining what to look at, an organization has a greater chance for success without getting "lost" in the analysis process. We tend to bucket measures into six key areas: workforce structure, capabilities and sourcing, performance and accountability, recognition and rewards, communication and connection, and leadership. There are several metrics in each category that we tend to see have a greater impact than others -- and this can serve as a good starting point for organizations.

I know, based on the popularity of Brian's and the other analytics sessions at last year's conference, the enabling technologies that support workforce-analytics projects are an important area of focus for HR leaders. Can you comment on what is important for HR leaders to consider when evaluating technologies in this area -- what are some of the key capabilities they should look for and what questions should they ask of potential providers of these tools?

Kelly: In my experience, the most effective metrics, analytics and workforce planning programs have the right blend of both consulting and technology working together. It is a mistake for organizations to think that, if they run out and purchase new technology, that they will be successful in launching and running an analytics initiative. An organization really needs to understand what to measure, how to calculate such measures and how these measures link to the organization's strategy. Once this framework is in place, purchasing and deploying technology can add significant value to a program.

I believe best-in-class metrics, analytics and planning solutions combine three key technology components that really assist organizations in achieving results. First, solutions need to have a robust data-acquisition and integration capability to bring data together from different systems on an automated basis. Second, solutions need to have a flexible data-management and modeling functionality. Finally, best-in-class solutions need to have a visually appealing delivery capability (business-intelligence-type functionality). I have found that the key to such solutions is the data-acquisition/integration and data-management/modeling pieces; these are hard to [secure and] require specific expertise, and very few vendors truly have this type of capability. Unfortunately, many organizations focus on the visualization or business-intelligence piece when purchasing solutions and then get stuck trying to make such systems work.

One interesting development in recent years has been the growth of cloud-based solutions that combine all three of these components, plus come with content built into the solutions. The growth of such solutions in the marketplace is promising and I see this as the future of this marketplace.

Any final comments and thoughts about what the future holds for workforce analytics?

Kelly: Steve, I really think we are at a tipping point where we will see an acceleration of workforce analytics and planning centers of expertise being a core function at every company, and this discipline being recognized as an important business process, akin to strategic planning and financial modeling. It is an exciting time to be in this space -- and one of the best ways to share experiences with other organizations.

For more information on the 16th Annual HR Technology® Conference an Expo, to be held at Mandalay Bay in Las Vegas, Oct. 7 through 9, visit

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