USING HR METRICS & ANALYTICS
This is the question that most business leaders would like to answer – and the right people to answer the question are Human Capital Professionals. This becomes a mammoth task in organisations where the function of HR is simply people guardianship without insight on enablement to be futuristic. In these traditional organisations HR does not really add much value to the organisational strategy – reason being their inability to be analytic and present verifiable data.
This is why HR Metrics and Analytics become even more handy for HR professionals who want to play a significant role in determining the value of the most important capital in the organisation – the human capital. In this way the HR Professional is able to be more competitive amongst his counterparts as he/she speaks a language of business intelligence- well understood by the CFO and CEO.
Use metrics and analytics to measure and determine the exact value brought in by each FTE within the organisation – in terms of revenue and profits. The same tools can also help you to determine and communicate costs and expenses. This gives a clear indication of productivity and how your headcount is performing. Understanding analytics is critical in order to be effective, so I thought I will just give a brief information about them here.
TYPES OF ANALYTICS
1. Descriptive Analytics – these are largely traditional metrics that mainly focus on HR efficiency – metrics such as cost per hire, turnover rate, number of those hired etc. These metrics are characterised by dashboards, data mining, workforce segmentation among others, and are solely targeted at describing relationships and data patterns. Indeed they are your starting point and will help you in benchmarking from within the organisation and also within the industry.
2. Predictive Analytics – this is concerned more with analysis and futuristic in nature – using current and historic data to statistically model and predict probable and potential and likely impacts on the organisation’s bottom line. This helps to understand what kind of talent, how to recruit, develop, advance and retain them.
3. Prescriptive Analytics – Beyond analysis and predictions decisions have to be made. This is where predictive analytics come in handy for HR Professionals. After analysis of complex data, decision options are explored and outcomes predicted with possible impacts.
Three classes of capital should be understood in terms of application and value – i.e. financial capital (cash) and economic capital (intangible assets) and human capital (people). Whereas we know that the first two are referred to as the lifeblood of every business outfit – it is a fact that the latter is critical in terms of making crucial decisions of application and use of the two former classes. That is why it is important to watch out for and keep developing the human capital for better results in a fast growing and competitive global economy.
Analytics will help answer the key question : “Are we managing talent for better results?” The answer cannot be only subjective anymore – verifiable information presented through analytics will indeed come in handy for Human Capital Professionals.
The first step is to determine if your workforce is engaged. I have developed a simply tool to assist you to determine this – please check it here : MASLOW NEEDS TEST