HR Analytics FAQ: a Top 10

Analytics has been too much in the HR and systems news in recent months for me to wish to ignore. It is something of a buzzword and yet it remains decidedly difficult to get to grips with what analytics is all about in practice and for real. In my work meeting with HR leaders to explore what technology can do for them, I’m aware that sometimes the basic questions go unanswered. As a result, a leap of faith into analytics feels unnecessarily lacking in evidence base. Here is a speed read, deliberately digestible, of a “top 10” questions which may just help to solve that problem:

1. Should I be interested in HR Analytics?

I’d say yes. There has been too much noise for too long in HR to pass off Analytics in HR as a trend. Systems vendors are making stuff, new products are out there, the HR press is full of it. Analytics to me is looking like the emerging new thing we want to do in 2016 and beyond, as was perhaps Talent a few years back.

2. What is Analytics?

Information is meaningful data. Think of Analytics as a step further – data with analysis, information with insight. And you can, with Analytics, take the information (reports) step right out of it, jumping straight from raw data to insight. This comes about in an age where “big data” availability creates massive potential for finding out new things. Have a read below of some of the benefits in HR.

3. What’s the difference between reporting and Analytics?

Reports are flat data in two dimensions. Reports state things, often in great detail. Reports draw on pieces of information you put in them and design. They are great for precise things you need to know or to offer to an audience in a given format. Analytics can take data from more dimensions (otherwise unrelated factors). The extent to which this is then developed is changing all the time, but I think true Analytics has got to include insight…..

4. And is it the same as dashboarding?

…….I see reporting tools developing some really great new dashboards and other visualisation tools, calling themselves tools for analysis. It is really semantics but do be aware that there is a great difference between showing information in a way that’s easy to read and in creating new information. This is a key distinction.

5. And predictive Analytics?

So predictive Analytics does just that – create new information. With predictive, as you’d expect, past data can be taken and insights about the future drawn. Insights don’t need to be about the future, but they could be. Analytics tools might otherwise find information you didn’t know buried in history or what is current. And analysis could even be prescriptive – guiding the organisation based on predictions made as to what should be done to create the best future scenarios. If you think about it, we all do predictive analysis – otherwise (with the exception of compliance reporting) why would we bother asking for reports at all, unless we were going to try to work stuff out with them?

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Related: Predictive Analytics in Human Resources: Tutorial and 7 case studies

6. How does it work?

I don’t pretend an in-depth understanding but, interrogating the experts, I came to an appreciation that analytics tools combine the ability to trawl through vast amounts of data, from different sources, with some sophisticated mathematical modelling to arrive at results. Big data and clever sums are two things that human kind is not so great at!

7. Do I need an Analytics tool specifically? A separate product?

Possibly yes. See above, in that I reckon all in HR do try to perform analysis to some extent and it calls for skills our minds don’t do well at. The bigger the organisation the more relevant it could be to look at a product, but licensing options these days don’t prohibit analytics products for the medium enterprise either. But check out what your existing HRIS and/or Business Intelligence tool can now offer and compare prices, taking care to look at what these tools really do, rather than just the use of the word “Analytics” in product headline descriptions. And if you are still at basics with Management Information full stop, then wait.

8. What’s the benefit?

Benefits of course will vary with the tool and the data you choose to use it with. But here are just a few: Impressive visualisation of information in a user-friendly way. Answers to questions you write in plain English. The option to change your question without re-writing a report. Potential to predict with accuracy the future. Combining of data from different sources and systems. In HR, this could be in respect of recruitment success, performance indicators, absenteeism, skills and their outcomes, costs etc. I saw a great example recently of a measure of “effective FTE” – a productivity measure.

Related: Learn about HR analytics: Check these online courses.

9. Will it be affordable?

Licensing for new cloud-based tools delivered to a Software-as-a-Service (SaaS) model tend to be priced on a per employee per month basis which is very affordable and scalable. Obviously do expect economies of scale there, not least in factoring in implementation cost, which will vary according the to the product you choose and the data sources you need to link new top layer products to, and how they are set up. But compared to the big beasts in core HR and payroll systems, Analytics could be modest and with a considerable return on that investment.

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10. How would I go about choosing the right thing for me?

Well, there is a lot that is new making it hard to know where to start. Find out what reporting and Business Intelligence tools you currently have in your organisation and any potential there. If you have an in-house someone who is interested, task them to explore or engage for a few days independent systems selectors to research and draw up product specifications on your behalf. However, unlike your choice of master HRIS, I think that this could be a case of selection for “good enough”. By this I mean that if you can identify what you want to achieve, then it is arguably the right approach to stop searching when you arrive at the first solution that ticks all the boxes. Please don’t be horrified at my suggestion here – in a world with a plethora of newly-emergent choice, for a question of lower investment and shorter commitments and where ongoing service is of reduced significance compared to the core HRIS, pick your battles.

My top 10 Analytics FAQ may not use big data, nor offer predictions of the future, but hopefully they make good sense.

With thanks and acknowledgements to Activ8 Intelligence @Activ8_Intel for recent support in investigation, patience with questions and offering evidence to me.