Yesterday, I spoke at the Future of HR Summit about how to get started with HR analytics for African businesses. The conference was extremely insightful with some excellent speakers. I personally enjoyed connecting with so many forward-thinking HR professionals from South Africa.
Deborah Hartung set the expectations up front for day two of the conference, by challenging delegates to consider whether they were ‘brave enough to break up with the past’, referring to the need to desperately step away from the old ways of doing things, embrace change and move into the future of HR.
I would like to share a few key insights from my talk with you here.
HR sits on a goldmine of data and in today’s workplace; HR teams are generating more data than ever before – yet many companies struggle to know how turn this data into powerful insights to inform key business decisions.
According to PwC’s Preparing for Tomorrow’s Workforce Today report, 41% of organisations say making workforce decisions using analytics is important but they don’t do it.
Furthermore, business leaders lack confidence that their HR functions have the necessary capability in data analytics. According to PwC’s last CEO Survey results, there has been a ten-year ‘information gap’ between what data CEOs need and what they actually get.
HR is becoming more strategic and leaders expect HR professionals to move away from transactional tasks towards adding more value to the business and with this in mind, it is crucial to understand that analytics has a critical role in linking HR strategy to business outcomes. To do this effectively, HR teams must embrace change, build the foundations, develop capabilities and showcase their ability to deliver.
The HR Innovation Research Report 2019 discovered that only 9.1% of South African businesses are proactively using analytics to effectively drive strategic decision-making, while an equal number have not woken up to the fact that developing a data-driven culture is crucial to future success and sustainability. What is encouraging however, is that 50.9% have made a start and are attempting to put their HR data to effective use. In addition, 30.9% have data available and are open to learning more.
Here are six simple steps which you can use to get started and steer you in the right direction – they’re also helpful reminders for those who may have already made a start on the HR analytics journey.
Step 1: Harmonise & centralise
It’s all about data. Spend time getting the data in order and building solid foundations from the outset. The best advice I can give is to harmonise and centralise your data, ideally into one data source. If one data source is not feasible, define a sensible and streamlined approach. Ensure your data is cleaned up as much as possible and implement processes to keep it this way. Without getting these basic foundations right, you will face all kinds of challenges in making analytics work. In my experience, this step is often the hardest, but it will prove to be the most important in setting you up for long-term success.
Step 2: Identify the right metrics to track
There is no ‘one size fits all’ approach; you need to identify the right metrics for your business. Select two – three key metrics and start there, don’t try to change everything overnight. The metrics you choose should provide the correct focus and insight, in order to drive the right conversations or decisions, in line with your business goals. There may be some general themes (e.g. hiring, retention, engagement, culture and productivity) which may be common among businesses but the actual details will be different in each case – Google or PwC will for example, be using metrics differently to a 500 person company based in one country. Think about the right fit for your business, what areas are leaders focused on, where there may be ‘quick wins’ and so on.
Step 3: Build visualisation
Use technology to build visualisation for your metrics, helping to bring them to life – there are many tools out there that are available, or you may already have capability within your current HR systems. If possible, find ways to make your metrics available in real time, as this will significantly increase the quality of your results and effectiveness of decision making.
Step 4: Identify users & upskill them
Metrics will most likely be made available to the HR team and leaders within the business. Spend time to ensure these users understand what the metrics represent, can interpret them, can explain them to colleagues or senior leaders, are able to have meaningful conversations around them more importantly, know that once they have the metrics, the next step is to take action; it’s pointless measuring data if nobody does anything with the insights.
Step 5: Solve real problems using the metrics
Once you have the metrics, put them to use by solving real challenges in your business. Make sure you engage leaders and share with them the vision towards a more data-driven culture. This ‘proof of concept’ is the first step toward gaining interest and support. Showing that you can effectively inform decisions or have more meaningful discussions around real data insights will help to build confidence in HR’s ability to deliver, showcase that the data-driven approach really works and gain buy in from senior leaders. This support can then be used to seek additional investment to continue the analytics journey or towards further HR technology initiatives.
Step 6: Review & refine
The last step is very important; building HR analytics tools and capability is not a one-off project. Your business is living and breathing, so your metrics and other HR technology for that matter, must continue to grow and evolve with your business. By carrying out a one-off project, you may see some benefits in the short term but over the medium to longer term, the efforts will become obsolete. Ensure you build in ways to continuously review and refine, collect and respond to feedback and remain future-focused.
Embracing analytics is the first step to building a more data-driven HR business & an opportunity for HR to showcase strategic value to senior leaders.
My final point is to mention that it’s important to have high aspirations around implementing HR analytics; however, don’t forget the basics first. You wouldn’t attempt to build a house for the future, without laying some solid foundations in the beginning!
Found this useful? Have something to add? Let me know your thoughts below.
You can also reach out to me with any questions you may have. If you would like more information on how you can leverage HR analytics or digital HR for your African business, please reach out to me here.