HR Analytics Part 2 – Understanding the Parallels
So where does HR analytics start?
As with all analytics, this starts from a thought when the curiosity / need to know exactly how the situation looks becomes of paramount importance. A new leader who wants to know the lay of the land first hand , a leader who has seen other units / competitors benefit or an organizational mandate to ‘show us the numbers’ are often the triggers to setting up an analytics process .
Most analytical processes play up or substantiate the existing notions that the practitioners carry, often putting exact numbers to what have been the generally held notions. And adding in new insights to the tune of 10% to 15 %. The conviction that comes from seeing a trend of numbers cannot be substituted by any other methodology . And we all know that the human mind is great at individually evaluating a co-relation (1 variable to 1 variable) but finds it difficult to put an exact contribution of multiple variables into play .
Is the Analysis a FINAL result?
A workforce is a dynamic, ever changing organism. The composition varies over periods of time, sentiments change (external and internal) which affect the behavior of the components of the workforce. In this dynamic environment the analysis also changes over periods of time and needs to be updated and refreshed. Triggers need to be identified and if large changes in the triggers are seen, these need to be investigated or ‘analysed’ for cause, effect and impact !! This, in a nutshell, is the ANALYTICS CYCLE.
Some Common metrics in HR include:-
- HR Function Performance
- Employee satisfaction:– Analysis of the Sentiment of the employee, this is a mixture of the ‘verbal’ or ‘open’ variables (from surveys / feedbacks etc.) and the ‘non-verbal’ / ‘indicator’ variables like exit interview feedback / malicious gossip/ general attitude at work (eg. Commitment to finishing work etc.)
- Job evaluation factor:- Job evaluation is a systematic way of determining the value/worth of a job in relation to other jobs in an organization, for the purpose of establishing a rational pay structure.The variables include abundance of manpower in the segment, ease of hiring, time lag between hiring and performing in the role etc. If a scoring system is developed then it is often qualitative.
- Workforce stability factor:- Employers are increasingly concerned about maintaining a stable workforce. They need competent, dedicated, and effective workers to serve their customers to fulfill their missions. Without a sufficient qualified and productive workforce, employers are vulnerable to competitive forces as well as the impact of negative relationships with their customers. It is frustratingly difficult to find, recruit, and hire the caliber of employees that companies desire today. To assure that they have qualified people in their jobs–at all levels, companies are faced with several alternatives / decisions:
- continually engage in expensive processes to find and attract desired workers
- deliberately engage in efforts to retain the talent they already have
- re-engineer their structure, systems, and procedures to reduce the number of positions to be filled.
- some companies turn to outsourcing to reduce their need to maintain their customary workforce.
The variables include criticality of position to the business, ease of recruitment etc.
Depending on the evolution of the HR practice in the organization and the vintage and quality of data , methodologies employed to aid decision making varies from tracking trends through MIS , non – predictive analytics (Segmentation , TTD, Decision Tree etc. ) to Predictive analytics (Scoring models) .