Data analytics: three ‘must-knows’ for the new world of HR
It’s the endless conundrum for CEOs: how to make HR pay its way in terms of hard business results? And it’s more personal for the HR department: how to eradicate the ‘fluffy’ image problem for good?
‘Data analytics’ and ‘predictive analysis’ are HR’s latest buzzwords, promising a solution to both these problems. And with good reason. Research conducted by Massachusetts Institute of Technology and IBM has shown that top performing organisations are three times more likely to be sophisticated users of analytics in human capital management than lower performing organisations.
But for many businesses in Australia, this tests new waters. Here at Effectus Consulting, we’re passionate pioneers in the field – and we have three pieces of advice for organisations keen to take the plunge into a data-driven future.
1. Understand what it is – and what it can do
It’s complicated to get right but shouldn’t be hard to understand. Data analytics is simply an evidence-based approach to HR that links it to meaningful business results.
HR has collected internal data for years – but this is about collecting the right data, coordinating it well, and probing it for smart insights that drive strategy and prove business returns.
Or, as some say, it takes the “gut feel” out of HR – injecting proven logic and analysis techniques to maximise investment. It allows companies to plan and measure how to attract, retain and grow their talent to stay ahead of the competition. It convincingly guides strategic business decisions.
It proves the business return on HR programs (like ROI, profit and productivity). For example, our clients have seen results like 150% ROI within 3 months, and improved the value of their HR spend by 20%+.
Predictive analytics (mining historical data) helps model future scenarios for more accurate and confident planning. Done right, it can streamline the expensive and timely hiring processes – while maximising ‘great hires’ that enhance productivity and growth.
2. Get the right people onboard – then internalise!
Australia is still relatively new to a truly data-driven approach, with a shortage of HR professionals with knowledge and experience in data analytics and organisational psychology.
For analytics to make a difference, businesses need the right specialists to work with leaders to dive into the data, interpret it and help develop strategies to optimise their workforce and its levels of engagement. This must be tailored to match your specific business metrics, people and work environment.
As executive psychologists with data in our DNA, we’re focused on business success and growth – with a keen understanding of the people strategies that get results.
We’re also serious about avoiding ‘consultant dependence’, which holds real dangers in such an emerging field. If your business is moving towards better linking HR and data, find a consultant who genuinely wants to build the capabilities of your internal team. It’s the only way to embed this approach and its systems into your business for the long term.
3. Don’t overcomplicate or overspend
Finally, beware of incredibly costly and complex “data analytics” explanations and programs. Yes, there is a science to getting it right but that doesn’t mean it has to cost the earth or muddle your brain.
For us, it’s simply about helping Australian businesses drive their performance through their people. We provide smart organisational and leadership strategies that pave the way to crystal-clear business results.
In short, we help CEOs save money, make money and manage risks. It should be as simple as that.
Keen to get results, dive into data and keep it simple? Talk to us.