By Saqr Mohammed*
Many strategic decisions can be made out of HR big data that are handy and within reach, if people understood them correctly and where able to tell a meaningful story that have an impact. Mercer’s recent participation at the November 2015 HR Summit and Expo in Dubai (UAE) shed light on the importance of having data-driven stories that support a company’s people strategy.
It is a common view that HR wants to be seen as a strategic partner where they can contribute to the overall business strategy and to the bottom line. Yet, such opinion and effort can’t be reached when HR does not have the data and the right storytelling technique to capture the leadership’s attention and buy-in.
HR directors often doubt the data they have might not be accurate enough. They might not know where to start, how to measure certain key business indices, or how to translate them into insights that the business wants and needs. To help HR in this quest, Mercer’s team at the expo highlighted the five most steps in identifying and using HR metrics and workforce analytics.
Before, many have considered that collecting data was the first and the most important element in HR metrics. Current efforts, however, suggest that identifying and determining the impact of any data use to be first and foremost in the effort. Similarly, HR professionals who were fixated on the need to follow the process of collecting data and reporting the results have now been surpassed by a new breed of HR need: reporting the results and the impact to ensure the best storytelling experience. In this regard, HR professionals will require new thinking and new skills to take this forward.
The illustration below describes the current and the new thinking of HR Metrics process:
1) Collect data 2) Choose metrics 3) Report Metrics 4) Analyze findings 5) Assess impact
1) Determine impact 2) Choose metrics 3) Collect data 4) Analyze findings 5) Report metrics
The Expo presentation and discussion emphasized the importance of telling a powerful story from the data in hand. But before doing so, HRDs have to decide on the measures they should focus on that will provide the right impact needed for the business. There are so many metrics to choose from; yet what to focus on that will provide the results is considered most critical.
HRDs can start with basic information having in hand, and categorized into four ways:
- Data in Different Forms
- Data at Rest
- Data in Doubt, and
- Data in Motion
With that resolved, and the data beginning to tell a clear and fact-based story, HRDs can move from a less powerful stage where they say “we think…” to a more powerful stage where they say “we know for a fact…” Many common challenges occur for HRDs when they think of ‘big data’ where they have unreliable or inaccurate data, or they don’t know what to measure or how to measure it, and they don’t know how to translate data into workforce insights and how to spend more of their time in interpreting them rather than creating the reports. Our presentation to the Expo audience focused on various metrics that HRDs can use – from workforce demographics and turnover rates, to payroll data and other HRMS data. From there, it’s other data like the employee engagement index, hiring rates, promotion rates, and so on. The list keeps growing over time, and other metrics also can be added down the line such as buy vs build ratio, median span of control, percentiles market pay, etc. Yet, the list shouldn’t stop there. This is the time we should aim for anything up to 60 metrics – all or some of these can make our decision-making process even easier, stronger and with the level of confidence that HRDs’ supposed to have.
During the presentation we also illustrated Mercer’s trademark work on workforce analytics called the Internal Labor Market (ILM) map, which provides a very meaningful story about an organization. This ILM tells a very simplified and illustrative story of what is actually happening in an organization. It identifies the movement of each Career Level/Position Class in a very simplified way that draws management attention. It helps HRDs focus on a simple and very creative way that tells a meaningful story about the organization’s internal labor market, and it will, quite possibly, lead to leadership paying attention and allocating resources to address issues observed. Ideally, the investment in data and workforce analytics – driven by HR – will have the leadership chasing HR for insights and progress, and not the other way around.
*Saqr Mohammed is a principal in Mercer’s Dubai office with a focus on workforce analytics