I have written specifically about HR analytics in my last few posts because I am very intrigued about it. On one hand, I freely admit that I am a big believer that HR analytics can add a lot of value, not just to HR and to the quality of its decisions, but also to the organization itself . I don’t know if HR analytics is the answer, but there is still much which suggests that HR is still not an important strategic partner in most organizations. On the other hand, I also experience many companies struggle with HR analytics. They don’t get the most out of it.
The challenge for HR analytics is not the software. I am no expert, but the few solutions I have examined, seems to be able to do the basics of what analytics is supposed to do. There are many times compatibility issues with existing IT solutions and often major problems with the quality of the data going into the programs. That leads to the issue of “garbage in – garbage out“. But in reality, I don’t believe this is the biggest challenge.
The challenge is also no the people in HR analytics. Again, I have not met all – or indeed that many – in the field, but my overall feeling is that they know how to retrieve, analyze and present data in a fairly good way. They understand data manipulation and care a lot about getting the right data and converting that to useful information.
The challenge, as I see it, is with the mindset – specifically the mindset of the HR executives. Let me explain. Potentially, HR analytics can get you as many facts as it is even possible to conceive. It is also able to give you a ton of interesting information – i.e. converting data and facts into information (note the difference between the two!). But the most difficult thing – and the most value-added – is to find and convert the right information into strategic actionable knowledge. And the only way you can generate this knowledge is to truly understand the business and strategy of the company, know what the primary workforce drivers are behind delivering on this strategy and finally understand how to get information and convert it into strategic actionable knowledge. This ability – or mindset – is not always present.
This must come from someone within HR. Top executives don’t always know what they want from HR or HR analytics. In general, I believe that they are quite excited about the prospect of what analytics can do (although many confuse it with metrics and normal reporting), they like the concept and some actually ‘get it’. The problem is, that they don’t know what to ask for and how to use it. Frankly, many times not even the head of HR know what they want from HR analytics. So, someone in the analytics, management information, HR data (or whatever the department is called) must have this mindset, ask the right questions and deliver value added knowledge in the form of analytics.
This challenge represents an opportunity. As I stated at the top, analytics is a tool which can help HR add significant value. To utilize this tool requires a strategic mindset. Master this, and reap significant rewards.