Analytics, supported by digital technology, can help managers and human resources teams make better, quicker and more informed decisions that are aligned to a company’s business strategy.
We are seeing it used increasingly in financial services companies, where a razor-sharp focus on cost reduction, efficiency and profitability has been a driving ethos ever since the financial crisis rocked the industry.
Switched on executives know that cost-cutting can’t be the only metric. They are asking their human resources teams to move beyond tactical cost reductions and to focus on generating higher efficiencies. To answer questions on the dollar value impact of bad hires, early attrition, high performer attrition and unhappy/disengaged employees with any level of credibility, HR teams need to use human capital analytics.
The use of data to produce business-relevant insights that lead to action, has been recognized as the new step change for HR. Human capital analytics can provide answers to questions such as: what skills do we have by geography/ business unit? What skills are in demand, where do we have skill gaps and what are good options to close those gaps? How can we optimize our total rewards to improve talent engagement and retention?
Human capital analytics deliver critical insights about a company’s people, their preferences, what makes them more effective and their contribution toward the success of the business. This data can be used to determine what makes employees happy, more productive and willing to go the extra mile. (Conversely, knowing what drives people away from companies is equally important).
It can be used for proactive HR decisions: map out strategies for recruitment, retention, competency mapping, rewards design, and team compositions. It can also be used to create personalised employee experiences – such as determining what continuous education is needed – which can help HR teams focus on returns on investments rather than just costs.
The next generation of business intelligence tools enable automated real-time reporting with both descriptive and predictive analytics, delivered through cloud platforms. The costs to deliver analytics is significantly lower than what was feasible in the past. This is an important competitive advantage for leading businesses globally and has changed the role that HR has in developing and delivering the business strategy to management.
It does require conducting a strategy assessment to identify areas that would benefit most from HR reporting and analytics. Understanding the link between talent decisions and business outcomes is key to build a business case for HR analytics.
Next steps involve selecting data requirements and the right technology for reporting and analytics, as well as the appropriate operating model for HR analytics – there are different ways of organising analytics teams. To make analytics a real and integral part of your business decisions requires a robust and well defined operating model.
As the war for talent intensifies, recruiting, developing and retaining talent is more important than ever. There is a need to understand your workforce more in depth. Data analytics can provide detailed people insights and help organisations build a strong workforce to deliver competitively differentiating capabilities.
Andrew Woolf is Accenture’s global talent and organisation lead, financial services