Raging Debates in HR Analytics

By Laurie Bassi, McBassi & Company

The Evolution of HR Analytics

1978, Jac Fitz-enz :“Human resources activities and their impact on the bottom line could—and should—be Measured” .Reaction was apathy, disagreement and disbelief.

1980s and 1990s : Refining and improving the benchmarking of HR metrics. “If we can just look more like our competitors on some standard HR metrics, then we have done our jobs.”

Past Decade : Worlds of HR metrics and software have converged, new horizons for creating business intelligence on the people side of the business are arising.

Easier to answer -> drivers of individual- level outcomes, less progress in answering -> drivers of organization-level outcomes

Major Debates in HR Analytics

Who

How

Why When & Where

What

The “What” Debate“What is HR analytics, and what can and should it be used for?”

A process for systematically reporting on an array of HR metrics—time to hire, turnover, compensation, employee engagement

The only activities and/or processes that constitute HR analytics are those that involve “high-end” predictive modeling (e.g., “what-if” scenarios that forecast the consequences of changing policies or conditions)

The application of a methodology and integrated process for improving the quality of people-related decisions for the purpose of improving individual and/or organizational performance”

The range of applications that constitute “talent analytics,” their phrase for HR analytics, from simplest “human-capital facts” to most sophisticated analytics that help optimize the “talent supply chain”

Evidence-based management is based on the belief that facing the hard facts about what works and what doesn’t, understanding the dangerous half-truths that constitute so much conventional wisdom about management, and rejecting the total nonsense that too often passes for sound advice will help organizations perform better

Focus on employee engagement requires serious examination if HR professionals are to become able and respected

practitioners of HR analytics

The “Why” Debate“Why should we do HR analytics”

No need for HR analytics because senior executives don’t require or expect it

Purpose of HR analytics is to improve individual and organizational performance

Can help identify where not to be spending time, effort and budget

Role of ROI analysis : Primarily used to demonstrate the value of HR investments - creates the wrong focus

Reason for doing HR analytics to improve individual and organizational performance—not to prove the worth of HR

The “Who” Debate“ Who should or can do HR analytics?”

Who will be responsible for measuring the financial impact of human capital—the HR function or the office of the CFO that has the best handle on available measures of business results?

Who will drive the future of HR analytics—the HR function or IT that typically owns the analytic software and tools necessary for HR analytics?

HR—not IT or finance—needs to take the lead on HR analytics. But doing so will require that HR develop new capabilities and

capacities

The “When” and “Where” Debate“When should we use HR analytics?”

Whether it is possible to create good global analytics in a world of various cultures, regulations and standards.

Potential abuses of HR analytics as it becomes more powerful and widespread.

Establishing clearly written and widely circulated principles for when HR analytics will and will not be used

“Let not the perfect become the enemy of the good.” As the power of HR analytics advances, so too, will the ethical

dilemmas that it poses

The “How” of HR Analytics“How to start with HR analytics?”

HR Analytics Handbook (Bassi et.al.) provides succinct “how to” advice

Investing in People (Cascio and Boudreau) provides detailed guidance for undertaking a wide variety of HR analytics calculations.

Analytics at Work (Davenport et al.) provides broad-based guidance on how to create a more analytically oriented culture within an organization.

The New HR Analytics (Fitz-Enz) provides “how to” essays, case studies and sample worksheets.

The Business of Learning (Vance) provides detailed guidance on how to apply analytics and the logic of economics to all aspects of the training and development function

The Future of HR Analytics“Where do we expect to be with HR analytics?”

Enhance the credibility of the function and the profession by improving the effectiveness of HR policies and practices and contributing to the competitive advantage of organizations that develop it as a core competency

Expose where effort, resource and budgets are not producing their intended impacts, and in so doing reduce the workload while improving the effectiveness of HR

HR professionals develop new skills and capabilities so that they can effectively partner with and lead IT and finance on HR analytics initiatives

Achieving this win-win will require that we move beyond the confused debates and dangerous half-truths that currently

muddy the HR analytics waters

THANK YOU