In the world around us, all kinds of data and the ability to manage it is of strategic importance. Various conclusions you can draw from the data collected and processed help improve all areas of life. It is no different in the operations of an organization. The benefits of analytics in HR and L&D are many if you only ensure proper commitment. Numerous studies confirm this.
Does implementing data analytics in HR produce visible results?
YES! This is one of many interesting conclusions. It emerges from reading the HR Reporting & Analytics Study report by Top Employers Institute and Bright & Company. This is clearly illustrated by the following statistic:
81% of respondents from companies extensively using data analytics confirmed that at least one project that used HR analytics had a positive impact on the business.
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How does data analytics influence financial results?
Although the metrics that determine business success across different types of analytics are similar, the differences between them become clearer when you look at them in the context of HR and financial results. Thus, it is easy to see which forms of analytics outperform others. Global Leadership Forecast 2018 by Development Dimensions International Inc. presents research on the relationship of the use of analytics in a company and:
Its ability to quickly adapt skilled employees to key roles within the organization.
Financial results in terms of: revenue growth, operating margin, operating profit, and rate of return on equity.
Research shows a correlation with one or both factors and using analytics by internal benchmarking, creating leadership planning models, and using data visualization techniques. Companies using analytics were, on average, 6.5 times more likely to identify talents with the right aptitude for key positions within the organization. The study also found that these companies are 3.1 times more likely to outperform their competitors!
Why do we not use People Analytics to its full potential?
Based on Nucleus Research, we can safely assume that one dollar invested in analytics pays back a whopping thirteen times! The data relates to analytics in general business terms. Authors, quoting McKinsey&Company, highlight the popularization of analytics in HR. In their view, we can see this, especially in processes depending on senior managers. The paper also outlines the factors that have a direct impact on the widespread adoption of analytics in HR. These are:
- sorting by key factors—the goal here is to optimize processes related to making choices, such as recruitment,
- identification of factors affecting decision making in individual processes,
- development and increase of efficiency at the final stages of the decision-making process.
But is implementing analytics in HR that difficult?
Keenan Steiner, in his LinkedIn paper, brings up the case study of Nielsen. This organization was facing a burnout of its employees. Employees responsible for the newly established People Analytics recognized the issue. However, the problem was ultimately diagnosed based on observations of the behavior of employees by the relevant leaders. Interestingly, Nielsen, a Big Data giant, only leaned towards this type of strictly HR-focused opportunities in 2015. Even the first processes involving the new approach produced favorable results. After a few months of using analytics, it was possible to diagnose the main factors affecting employee welfare in the company. This contributed to preventing arising problems and limited undesirable effects by half.
As part of the analysis, a model was created based on employee data, including age, gender, position, management evaluation, commuting time, etc. This allowed to draw further conclusions and build a basis for developing an integrated People Analytics program. Effects? It was possible to keep the company as many as 40 percent of employees from the group undergoing or very close to burnout.
Case Study in L&D
We have focused a lot on analytics in HR. How does this issue fit in the context of L&D? When it comes to learning analytics, let’s look for answers in the case study of Fujitsu. The starting point, in this case, was a transformation to greater business integrity. An important element of it was coaching with colleagues, consisting of the exchange of experiences in smaller groups of managers. The intention of the authors behind the project was to decide if this type of coaching was worth developing.
For this purpose, 4 areas were analyzed:
- comparison between departments that participated very actively in coaching with colleagues, and those the participation of which was lower,
- how the managers involved in the process evaluated the coaching sessions,
- how the employees who participated performed during the coaching,
- the way it affected employee satisfaction.
The most significant finding from the areas analyzed? Assumed metrics were achieved with maximum engagement in coaching. This resulted in a positive decision regarding the future of the entire program. Participants of more than one session achieved the best results.
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To which factors in HR can analytics be applied?
It basically all depends on the specifics of your business and your expectations. Interesting examples are companies that have long used data analytics to optimize other processes and only recently implemented it in HR. In addition to the previously mentioned Nielsen, Harrah’s Entertainment is also worth mentioning. The organization’s intent was to select the right positions for each employee using extensive analytics. And AT&T and Google have determined using quantitative analysis that demonstrated ability to take initiative is a significantly better predictor of job performance than educational background. Sprint, on the other hand, has identified the factors that most accurately indicate which employees will leave after a relatively short period of work.
An interesting example from the world of sports is AC Milan. As part of their medical project, Milanello, an in-house biomedical research center was created. Based on about 60,000 units of data for each player (!), the club can manage the health and fitness of the players, and make decisions regarding their contracts.
To sum up, data analytics creates more opportunities to notice potential of employees, increases the chances of business success and simplifies the decision-making process. In both HR and L&D, data is a guidepost that shows the direction an organization should follow, or the one that should definitely be avoided. It’s worth it to try out the power of data in practice.