5 reasons why HR Analytics must sit in HR
In my last blog post I gave five reasons why HR Analytics should not be located in HR. The five reasons I gave were: 1) It will lose its strategic potential, 2) HR does not have the capabilities – and will not be able to attract the right ones, 3) HR does not have ownership of all the relevant data, 4) Efficiency gains from pooling all relevant capabilities together and 5) HR is not credible enough to work with analytics.
Fair to say that while some agreed others did not. However, that post was only the prosecutor’s arguments. Now it is the time to ask the defendant to rise and present his side of the argument.
In this blog, I want to present the case from the other side’s point of view: 5 reasons Why HR Analytics must sit in HR:
- Nobody else care about HR data. If a central BI or Analytics unit should do all analytics work in a company my guess is that HR issues would be prioritized pretty low. In fact, it is not that many people outside of HR that thinks that engagement data can be used for much more than a pie-chart report once a year. However, in HR we know that engagement can drive business results. We also know of many ways to use analytics on engagement data. It takes an HR mind to see this and to care for this kind of data. Therefore, the more positive re-wording of this point might be that HR data has a lot of potential value; HR people are the only ones who know this and can get the most out of HR data.
- It takes HR knowledge to interpret HR data. Data is fine but where it really has an impact is when it is converted to information and later to knowledge. Computers can to some degree make these conversions but at some point they must be converted and interpreted by a human being. This is not easy and interpreting HR data requires HR knowledge. Leadership profiles, performance data, engagement survey data and many other HR data can only be fully utilized if the HR department helps. While a steering group with HR capability may go some way to resolve this problem, I would argue that either the meetings with the steering group must be very frequent or HR Analytics will have to sit in HR to get the required frequent interpretations of data and findings.
- It may make HR more data driven and improve HR impact on business. With some exceptions, I think it is fair to say that many HR departments do not have the influence in the organization (I believe) it deserves. There are many reasons for this; lack of strategic focus, difficult to quantify HR’s impact on the business results, a lack of basic business acumen and finally I often hear that HR does not speak the language of business. While I have always disliked the last argument, I hear it a lot. I think it has to do with not being able to make proper business cases, identify the strategic link, provide some kind of evidence to support the suggestions and quantify the value of the initiatives. I also think it is fair to say that HR is not very evidence-based. Do we really use the best knowledge available to design our practices? HR Analytics can help to achieve this to some degree. If used properly this will without doubt in my mind help HR gain credibility and impact on the business.
- Data ownership sits naturally in HR. Much of the HR data needed to conduct HR Analytics sits firmly in HR. It is always a problem if the analytics department does not have easy access to the data required. Many times the HR data is located on different IT platforms than the rest of the business’ and being located near the data makes access easy. HR will also understand the legal aspects of the data much better than anyone else (with the exception of the legal department of course) and this will help the HR Analytics team avoid running into serious legal issues.
- It will increase the likelihood of the analytics actually being used. HR Analytics is really about creating knowledge to make better HR decisions. HR decisions are many times made in HR by HR and therefore it makes sense to make the analytics department sit close to the people who are actually going to use it. It will make it more likely that it will be used and have the impact intended.
Did I forget any obvious good reasons to place HR Analytics within HR?
In this and my previous blog I have presented the two cases; 5 reasons for and 5 reasons against placing HR Analytics in HR. In my next blog post, I will discuss the two sides with Peter V.W. Hartmann who is the Lead on HR Analytics at Maersk Drilling and see if we can get to some kind of overall conclusion. So stay tuned…