HR Metrics Key to Strategic Planning

HR Metrics Key to Strategic Planning

Developing HR analytics that can more effectively slice and dice the data that's routinely being captured about employees and their overall contribution to the business can help HR validate their efforts. But in order to create these metrics, HR leaders must take a fresh look at the types of information being collected that can help senior executives make better decisions. This E-Guide explores how HR can capitalize on lessons learned from the marketing department when it comes to finding the data, asking the right questions and interpreting data. By: Yvette Cameron Confusion about the relevance of big data to human capital management (HCM) analytics runs high: What is big data when applied to the workforce? Can we achieve big data advantages using only internal data? Do data privacy concerns outweigh the potential benefits of? For many HR leaders, getting to big data analysis seems a distant target, as current initiatives yield only moderate results for meaningful insights. Consider the recent findings by talent assessment provider SHL, which surveyed nearly 600 global HR professionals and found that fewer than one quarter of organizations have a clear understanding of the potential of their workforce and less than half of them use talent data to make business decisions. Perhaps HR leaders just need an example of a business function that has embraced big data analytics and can serve their workforce analytics campaigns. Read on to find out how the marketing department can provide that example. Page 2 of 10

Workforce analytics initiatives are currently limited to HR data and surveys Today's are largely based on data housed in HR systems that manage performance, development and career data and actions. Many organizations augment this relatively limited data with periodic employee engagement surveys, but such approaches can be challenged by issues such as survey quality, point-in-time snapshots and the inherent bias that comes with asking employees to respond to workplace surveys using tools provided by that very workplace. Can the results really be trusted? Additional data from across the organization can and should be correlated with workforce data to drive better insights, including data from financial, project and customer support systems and other enterprise applications, as well as external data such as salary surveys, benchmarking data and social activity. Internal systems can also include the various communication channels including email, IM, voice and connectivity, but most organizations elect to keep analysis of these interactions siloed, if they're analyzed at all. At a time when we can potentially know far more about our employees than ever before, our internal vision remains limited. What HR can learn from its CRM counterparts? Meanwhile, our external vision -- that of understanding of our customers -- has never been so clear. Significant advances are being made in customer relationship management (CRM) tools for deciphering meaningful signals in the noise of digital communications, driving significant organizational investment. Worldwide CRM software revenues are projected to exceed $15 billion this year with Software as a Service (SaaS) social analytics applications among the fastest growing areas. By applying the Four Vs of Big Data to their CRM approaches -- leveraging large Volumes of data for large-scale analysis, incorporating a Variety of data for correlations and insights, mastering the Velocity of data for right-time and contextual results and getting to the Veracity of data for reliable results-- chief marketing officers (CMOs) are emerging as powerhouses in this new data-driven paradigm. Page 3 of 10

Why reserve such intensive focus for customers only? The growth in social and cloud analytics in CRM suggests there is a clear and compelling opportunity to apply a similarly intense focus to the workforce. Keeping in mind the lessons learned from CRM counterparts, HR leaders could likewise emerge as powerhouses for internal insights, driving objective, and talentbased decision support. Consider the following examples of CRM practices and their applicability to HCM: Social monitoring and sentiment analysis refers to analyzing the data flowing from social media channels and customer support sites to infer perceptions of brand and products. It can also include analysis across email, surveys and even Voice over Internet Protocol (VoIP) or telephone conversations to determine customer sentiment and address customer issues or, analyzed in aggregate, enable predictive modeling and trend analysis. Applied to HCM initiatives: Monitoring the social and communication channels of the workforce is equally important in identifying emerging risks and opportunities stemming from employee sentiment. By correlating this information with other HCM and enterprise data, companies can develop new insights into top performers and identify new success profiles. For example, a large electronics distributor adopted sentiment analysis tools for its internal workforce and was able to correlate top performance with email responsiveness and sentiment -- top performers sent 50% more email externally, responded 40% faster to clients and sent messages with 55% more positive tone than the bottom tier. Social transaction and influence analysis. Connected customers have many ways of demonstrating support and loyalty to a company's brands, products and services. They may engage with others in an online community, share feedback on a company's brand fan pages or post images, videos, and tweets via social media channels. Each of these serves to accelerate and deepen the customer's interactions with the organization. Analysis of these transactions can also point marketers to brand ambassadors and other key influencers. Page 4 of 10

Applied to HCM initiatives: The volume and variety of contributions to an internal social networking tool point to levels of employee engagement. Transaction analysis will provide the organization with usage, adoption and trending patterns and identify critical workforce influencers and detractors, where proactive management of the relationship and sentiment might be warranted. Leveraging key influencers in internal communication campaigns is an effective strategy for amplifying messaging, training and other initiatives. New candidates for succession planning and leadership development can also emerge when social influence data is correlated with workforce goals, performance management metrics and other talent data. Social campaigns and marketing automation in CRM involves brand advertising, content-based campaigns, engagement and communication paired with the results of social monitoring, transaction analysis, community trending and other analysis. Applied to the employee lifecycle: Social campaigns are becoming the way we more effectively source and engage with future employees. Engaging individuals with positive company sentiment, for example, is a good first step in developing high potential candidates. Organizations can also aim campaigns internally to improve employee engagement, collaboration and development with the content driven by internal and external data analysis. This is especially evident in talent sourcing, where recruitment marketing automation is used for purposes such as pushing real-time job openings to candidates through social media channels, with responses from all channels aggregated and analyzed to provide a 360-degree view of candidates, which can improve the visibility and tracking of candidates. Predictive analytics enable companies to anticipate customer response to new marketing initiatives or relationship triggers (such as contract renewal) based on a wide and deep analysis of previous behaviors and current buying patterns. Applied to the workforce: Predictive modeling can help organizations Page 5 of 10

understand the impacts of compensation and performance actions, reception of new messaging and so forth. Intention vs. action. Today's marketing automation platforms provide the real-time monitoring and analytics that is necessary to separate customer intention from action. Applied to HCM: Analysis of communications via social channels, internal activity streams, IM and others, coupled with employee achievements and progress against tasks, goals and other work management tools can yield more predictable performance. So why aren't we doing more of this in our HR practices today? Because in most cases, HCM-specific technologies have not evolved to capitalize on these lessons from CRM. Certainly, we have candidate relationship management and have expanded big data analytics on the recruiting side, but this is just the first step. Until the technologies emerge to extend what has been learned from CRM into operations, we will continue to make business decisions and strategic plans with an incomplete understanding of the very workforce we depend upon to execute those strategies. About the author Yvette Cameron is vice president and principal analyst at Constellation Research, Inc. can become strategic By: Alan Joch It's no secret that many HR managers want a bigger role in the C-suite. In addition to performing essential HR duties, they want to be integral to the strategic planning process. Page 6 of 10

There's no easy answer for how to achieve that status, but industry consultants say one important option is to apply HR analytics more effectively to slice and dice the data that's routinely being captured about employees and their overall contribution to the business. To do that, HR leaders must do more than just create traditional reports using standard data, such as headcounts and absenteeism rates; they should also take a fresh look at the types of information being collected that can help senior executives make better decisions. "HR should take the lead in saying, 'These are the corporate goals of the company; now what do we need to do in terms of the workforce to meet them?'" said Claire Schooley, senior industry analyst at Forrester Research Inc., based in Cambridge, Mass. "There need to be those kinds of discussions, but they often don't happen, which means HR is not seen as a player as often as it should be." Strategic moves Industry research shows that many HR managers do in fact play a strategic role in their companies, but the degree to which this happens hasn't increased significantly in recent years. For example, HR managers spend a little more than a quarter of their time -- 26.8% -- acting as a strategic partner, according to data presented in CFO earlier this year by John Boudreau, professor and research director at the University of Southern California's Marshall School of Business and Center for Effective Organizations. That's about twice as much as the time devoted to maintaining records, but less than that devoted to the broad activity of providing human resource services. But there's certainly a strong incentive to enhance the role of HR managers to strategic advisors, according to Boudreau. "HR leaders that report spending more time on strategic partnership also report a stronger strategic role, greater functional effectiveness and greater organizational performance," he wrote. What metrics should HR managers home in on to enhance their strategic importance? Schooley says that's probably not a question the HR Page 7 of 10

department can answer alone. Instead, she advises the managers to initiate discussions with line-of-business leaders with the goal of first identifying each department's key business needs and how well they're being met. For example, one perennial objective for most enterprises is to increase productivity. From a workforce perspective, HR and its business department peers might address this by identifying the workforce's best talent based on performance ratings and manager evaluations. The leaders can then apply analytics to determine whether members of this elite group work in key positions that contribute to productivity. Other areas of interest include how well recruiting processes are identifying needed talent, and the initial satisfaction rates of new hires with their jobs. Looking beyond basic metrics There may be a range of available workforce metrics that routinely go unnoticed but nevertheless have a strategic impact on organizations. One example is the length of time people stay in a particular role, said Al Adamsen, CEO of People-Centered Strategies LLC, a San Francisco-based consulting firm. "This data is particularly useful with Gen-Y workers, many of whom want to change roles every 18 months. That may not be in the best interest of the organization." Adamsen advises organizations to look beyond generational stereotypes and instead analyze the underlying causes for wanting to make frequent moves. First, is the urge more prevalent in particular workgroups or departments? If so, the organization may want to drill down to see if there is a lack of commitment among the employees, problems with the individual manager or a breakdown in the hiring process. "Maybe the hiring manager isn't setting the expectation that the organization would like a 24- to 36-month horizon before someone makes a move," Adamsen explained. The data that can provide insights into these questions includes a list of the relevant hiring managers and what tools were used to evaluate job prospects, such as candidate assessment programs or structured, face-toface interviews. "There may be an opportunity to coach the hiring manager or Page 8 of 10

adjust the assessment instrument so it's asking the right questions," Adamsen said. The hunt for relevant HR data Knowing the questions to ask and how to analyze the data isn't enough -- HR managers also need to know where to find the information they need. Some data sources are obvious -- traditional headcount and absenteeism numbers are readily available from the core HR platform. Managers should also look to new resources, such as social media applications, which can provide realtime feedback about employee attitudes and foster ongoing dialogues among workers and managers. "The whole idea of grabbing employee thoughts, feelings and perceptions is taking on paramount importance," Adamsen said. "So if I get hired and the reality of my job is much different [from what] I originally thought it would be, that's a valuable insight for my immediate manager, the business unit leader and for the organization. Maybe the person before me had that same experience, but no one knows that unless you have that data." But one challenge to finding relevant information may be the sheer volume of data being collected from traditional HR applications and social media sites. To cope, Schooley advises HR organizations to focus on a key area, such as an up or down change in attrition rates, which has the potential of delivering useful insights about the workforce and business strategies. "Find something that you can really engage in, and then analyze the variety of report types that are available to you," Schooley said. "If you try to analyze everything at once, it's just too overwhelming." Page 9 of 10

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