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18 Sep 2018

5 Steps You Need to Take for HR Analytics Success

Gretchen Alarcon

HR executives have a wealth of information at their fingertips: data on employee performance, onboarding, recruiting campaigns, and much more. You would assume this knowledge would translate to the power to understand HR performance, validate decisions, and make smarter decisions for your business.

But this isn’t necessarily true. Although many executives are comfortable managing and interacting with data, most HR executives don’t truly understand how to use this data to make smarter, more strategic decisions and experiences.

Imagine being able to show how employee productivity and engagement affect bottom-line sales, or determine whether your learning program affects how long an employee stays with your company. Imagine being able to predict and prevent employee turnover. HR Analytics can help organizations achieve these goals and others critical to strategic planning. Mature analytics practices can link HR decisions to business results, which means HR will play a more central role in strategic business conversations.

If you’d like to play a more strategic role in your organisation’s growth, these five steps can help you build and refine your HR analytics strategy:

Step 1: Lay the Groundwork

The most important step to take in advancing your HR analytics strategy is to set goals. What are you trying to achieve with your data analysis? Beyond HR, what other systems will you need access to? What systems do you have in place for accessing and analyzing these sources? Answering these questions can help lay the groundwork for a focused plan of action.

Step 2: Expand Your Strategy

Your organization is likely already doing HR analysis of some kind. The primary goal is to assess where your HR strategy currently is, and then identify ways to expand and leverage data sources so you can reach the goals you set in Step 1.

Say you want to gauge whether your employee referral program improved hiring rates. You would need to use analytics to track every aspect of the campaign: how many emails were sent; the email open rate; the actions taken from the email; and so on.

Analyzing this chain of events helps you determine whether referral programs help you find your strongest candidates. And if the data doesn’t confirm this, it can help you determine where and how you can improve your initiatives.

Step 3: Enrich Your Team to Support Your Goals

Take a look at who’s responsible for the analytical work on your team. Does someone have strong analytical abilities? Can he or she aggregate, manipulate, and analyze data to spot trends and identify opportunities? Or are you trying to manage all this work yourself?

Now more than ever, we’re seeing executives trying to hone their data analysis skills. But you need a true data expert, even a scientist, to make a true impact. Consult someone from your organization who plays a role in data analytics or, even better, see if you can hire one person (or a team) to be responsible for driving your HR analytics strategy.

Step 4: Use Technology to Connect Disparate Data Sources

Your goals determine how broad and deep you’ll need to get in your data collection. Narrow your focus on the HR data that will serve as your foundation. Then determine which data sources from different departments you’ll need to help your decision-making. Whether this data is stored in on-premises systems or stored in the cloud, technology should help you bring these insights together and provide insights for all business users.

There are many people who can’t drill down into complex data and conduct their own in-depth analysis. You need technology that can simplify data into easy-to-digest reports, visualizations, and dashboards.

Step 5: Get Predictive and Prescriptive

When HR can access, aggregate, and draw conclusions from disparate sources, data turns into powerful insights for the entire business. These insights can help HR have more productive discussions with executive team members and present more effective solutions for future success. This is beyond entry-level analytics—it’s predictive analytics. By embracing advanced analytics, you can get a glimpse into what may be ahead for your business and how to address potentially detrimental developments. Who’s likely to leave your organization? How will changing your compensation strategy impact performance?

Another trend best-in-class organizations are starting to embrace is prescriptive analytics which helps people uncover recommendations and solutions from the data they analyze. So in addition to identifying a pool of employees who are likely to leave over the next year, you’re also able to identify actions you can take to address the situation quickly and efficiently. Currently, very few companies are embracing prescriptive analytics, but being able to make smarter decisions faster is where the future lies. HR analytics is the foundation that will help you get there.

About the Author

Gretchen Alarcon is Vice President, Human Capital Management (HCM) Strategy at Oracle, where she leads the strategy team responsible for Oracle HCM Cloud applications. Ms. Alarcon has spent most of her career in HCM. She was an HR practitioner at National Semicondicutor, Ford and Silicon Graphics. While at Icarian, she transitioned to product strategy. In the early 2000s, she joined PeopleSoft, and stayed through its acquisition by Oracle. For the last eight years she has led the strategy team for Oracle’s HCM Cloud applications, a complete suite of products focused on providing new solutions for Modern HR.

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