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The four factors that make HR data analytics a success for organisations

A global study into the trends of HR analytics shows that experts distinguish themselves with 4 success factors – yet, less than a third see themselves as an expert. James Gooding, Director of UK operations of Top Employers Institute, explains.
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A global study into the trends of HR analytics shows that experts distinguish themselves with 4 success factors – yet, less than a third see themselves as an expert. Claire Matthews, UK Client Manager – Top Employers Institute, explains.

There is no doubt that analytics divides the HR community, with some HRDs using its potential, and others holding back. A new joint study, of over 200 companies in 36 countries, sheds light on just how organisations use analytics to be more successful. The study, by Top Employers Institute and Bright & Company, highlights four key success factors rated as ‘most critical’.

To ensure credibility, these four success factors come only from organisations that classify themselves as ‘advanced’ or ‘experts’ in HR analytics, yet revealingly, those that use analytics best make up just one third of HR professionals – and they’re usually from larger companies. Twenty-four percent of respondents considered themselves as ‘advanced’, and only 7% considered themselves as ‘experts’. Therefore, most organisations are not focusing enough on HR analytics to make it successful for their businesses.

The four success factors that distinguish the ‘experts’ are:

Creating value by proving business impact:

80% know what issues business management are facing
HR analytics is a strategic tool, and those in the know position it as such. Efforts are organised to optimise the impact of HR interventions on a business, to increase the chance of successfully attaining business objectives. For instance, experts know what issues business management are facing (80%), and have strong senior management support for data-driven HR (87%).

They tend to start with a question: what are our business objectives, and how can we use analytics to optimise the effect of our people practices on attaining these objectives?

Indeed, most experts have also identified and prioritised issues in their organisation where HR analytics can provide the most valuable insights.

Three strategic positioning factors clearly stood out – having a strategy for HR analytics, performing it with proven business impact, and actively involving senior management.

Budget, however, is a key requirement, often meaning investment in data and IT architecture, capabilities, hiring experts, and having a dedicated team.  This is a major challenge for a lot of organisations, especially for those just embarking down this path.

It’s therefore important to make sure that ambitions are explicitly mentioned in the people strategy, that efforts are in line with business strategy, and that the goal is to improve business processes.

Building the right team and capabilities:

93% build a link between the business and HR, with the right team capabilities
To get the right analytical insights, specific roles and capabilities are needed. Analytical capabilities, IT capabilities and management capabilities are all important, but the importance of the HR business partner linking business and HR (93% rated this as important) shouldn’t be underestimated.

The HR business partner needs to work out how HR can help solve business issues through analytics. For the process to work, HR people who understand how analytical techniques and technologies work, and how to use them, are essential.

Many organisations struggle to attract good analytical talent in-house (38% possess such capabilities), while others benefit from a company-wide central analytics function (42%).

Senior management also need to be involved in such projects to link them to strategy, and provide business support.

Managing processes, roles and responsibilities
Successful execution also requires good governance and cooperation. Developing and documenting guidelines on execution is an important step in creating a more data-driven mindset.

All key players and relevant stakeholders should be onboard and involved, know what to do, and understand the relations and interdependencies between roles (38% of total respondents agree).

It’s important to ensure that there is role clarity within the delivery process, and that it is clear and documented.

Dealing with data and IT issues
Data is the fuel of any analytics project. Having access to high-quality HR data is important, yet it does not mean most organisations got a perfect score in this. On average, experts outperform practitioners (83% to 48%). In addition, many organisations cannot fully rely on their IT function, and are lacking support from their CIO in promoting and implementing HR analytics.

To help achieve objectives, HR and business data needs to be available for analysis, and of a certain quality. Almost all experts (85%) indicate that HR data has a high level of accuracy. Still, it is common in most current projects to spend a significant amount of time on data selection and cleaning.

In order to move ahead, make sure that data (HR and business-related) is easily accessible by all parties that need access to it. Be aware, too, of the time it takes to obtain accurate and reliable data, as well as the processes for data privacy and data governance. This should be consulted with all relevant, involved stakeholders, and documented clearly before collection and analysis.

Organising for HR analytics success: Results of the 2016 HR reporting & analytics study can be downloaded at www.top-employers.com and www.brightcompany.nl

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