Should I or Shouldn’t I?

The evolution of HR is well under way and one popular component of that evolution is the implementation of HR analytics. In my last article, I discussed the struggle that leaders were having when they suddenly found that they were being tasked with the HR analytics implementation. In this article, I will discuss another popular dilemma related to rolling out HR analytics software.

First, why would a company contemplate putting in an HR analytics software solution? Well, for some, it’s the quickest way to migrate away from the endless list of manually generated reports. I once started tallying all of the reports generated by HR for one global company and I stopped counting after the number reached 300. That wasn’t even counting the reports being generated outside the U.S. In cases like this, when you start to add up the personnel, software licences, training and IT resources spent to generate these reports, the price of an automated software solution can start to make sense. The whole point here, of course, is to automate tactical reporting so you can focus your efforts on more strategic HR analyses.

For smaller companies, it may make more sense to avoid a commercial solution and take a more home-grown approach. Some of the software offerings out there can get rather expensive. There is also a trend of providers buying up each other so the overall number of options available for smaller budgets is becoming fewer and fewer.

For those who can find an ROI (return on investment) on commercial HR analytics software, note that these offerings will give you basic capabilities. For those like myself, who specialize in more custom and strategic applications of HR analytics, these pieces of commercial software won’t get us there but they do serve as a good centralized data source from which I can pull information.

One dilemma faced by those who do implement HR analytics commercial solutions is the decision of whether to push the information “out to the business” or keep it within Human Resources. The primary benefits to providing visibility of this information to the business are to save HR resources and to provide the business with rapid delivery of HR information for decision making.

The down side to this is that while the HR information becomes available to the business, the knowledge of how to interpret the information doesn’t go with it. In fact, most people in HR would struggle with accurately interpreting the information if they are outside of the analytics function.

As a simple example, if you push data and dashboards out to the business and the business sees termination rates trending upward, how should they interpret that? Should they be concerned that there is a problem with retention in their area of the business or are they observing the natural retirement wave of the baby boomers making their way through the employee population? Is it the high performers who are leaving or the low performers? One will concern us greatly and the other is cause for celebration.

My recommendation to those heading down this path is to carefully select the information that will be passed to the business and to put great thought into how it can be misinterpreted. Consider training people who will receive access to this information and make a list of those to whom this information will be made available. All areas of the company are not equally qualified to make decisions with the data so you may decide that some areas have the ability to make their own decisions with the HR information while others may need the approval of HR to make decisions.

Tracey is the author of “HR Analytics: The What, Why and How” and "Strategic Workforce Planning: Guidance & Back-up Plans." She holds degrees in Mathematics, Engineering and Business from universities in Canada and the U.S. and has over 20 years of experience in the areas of Human Resources, Supply Chain and Engineering. She was born in the U.K. and has worked in both Canada and the U.S.

Tracey is an independent consultant and her company, Numerical Insights LLC, helps clients in the areas of HR Analytics, Workforce Planning, and HR Process Improvement.

You can find Tracey on the web at:

Web Site: www.numericalinsights.com

Email: publications@numericalinsights.com
Facebook: www.facebook.com/numericalinsights
LinkedIn: http://www.linkedin.com/pub/tracey-smith/0/523/77a
Twitter: @ninsights

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