Learn from Otto Berkes, CEO at HireRoad, Co-Founder of Xbox and former CTO of HBO
Imagine you need to evaluate a complex piece of machinery. A robot, let’s say.
You need to figure out its potential, strengths and areas of improvement. And, even a strategy for ensuring your new robot friend reaches its full potential and goals.
But, to complete this task, you’re only able to look at each individual part of the robot in separate rooms. Doesn’t sound like the best approach, right?
As the saying goes: “The whole is greater than the sum of the parts.” And, a fragmented approach to robotics misses just as much as a siloed approach to HR data collection and analysis.
So, in a time where most teams have more data than they know what to do with, how can you implement a holistic approach to HR data and analytics? We sat down with expert Otto Berkes to find out.
Otto Berkes is the CEO at HireRoad, an end-to-end talent acquisition platform and HR analytics software. Otto is also the Co-Founder of Xbox and former CTO of HBO.
As a seasoned technologist, Otto believes that focusing on holistic data and analytics is integral to building successful HR and people operations teams that drive successful businesses.
He argues without a holistic integration of HR data, organizations risk making strategic errors that can compromise business performance, employee satisfaction and team productivity.
In this piece, we'll go over:
- HR metrics vs. analytics
- The components of your organizational robot (AKA some key HR metrics, data points and analytics)
- Why a holistic approach to HR data management improves organizational outcomes
- How to use this approach to create value in your business and team
Defining HR metrics and analytics
Before we dive into what metrics and analytics you can use, what are HR metrics and analytics anyway?
- Specific quantitative (or numeric) measures used to track and evaluate various aspects of the HR function to assess performance, identify trends, and make informed decisions
- Statistical analysis, data mining and predictive modeling techniques applied to HR data
- Generates actionable insights to support strategic decision-making
Steps to create value through your HR metrics
From Otto’s team at HireRoad, here are some ways to create value through your HR metrics, along with some example HR metrics and HR analytics systems you could use.
You can find more on this in two pieces from HireRoad: “Aligning HR Analytics with Business Objectives” and “HR Metrics – Measuring Activities or Creating Value?”.
1. Define objectives and business goals
First, you need to determine your business objectives, key performance indicators, goals and desired outcomes.
Because, whatever HR metrics and HR analytics system you choose, it should be directly linked to your business objectives.
Potential objectives could be around employee engagement, talent management, cost reduction, hiring process, employee performance management, employee turnover reduction and more.
Be sure to keep your objectives at the forefront of your mind throughout this process.
2. Identify HR Metrics
Now, it’s time to decide what metrics align to your decided objectives within your HR processes. Sometimes this will require working with teams beyond people operations and HR to get the data you need.
Otto’s team at HireRoad stresses the importance of selecting metrics that “best represent value versus activities.” Gone are the days of tracking and collecting data for the sake of it.
Here are some example metrics you can use:
- Time-to-fill (TTF): Measures the number of days it takes to fill a vacant position, from the time it is approved to the time the offer is accepted by the candidate.
- Cost-per-hire (CPH): The total expenses associated with filling a position, including advertising costs, recruiter fees and other recruitment-related expenses, divided by the total number of hires. CPHs helps you understand the financial efficiency of your recruitment efforts.
Employee engagement Metrics:
- Employee Net Promoter Score (eNPS): Modeled after the Net Promoter Score used in customer satisfaction surveys, eNPS measures employees' likelihood to recommend their organization as a place to work. It is usually assessed through a single question survey: "On a scale of 0-10, how likely are you to recommend this company as a place to work?"
- Retention Rates: Quantify the percentage of employees who remain with the organization over a given period, such as one year.
3. Data segmentation
Here’s where an HR department can get really granular (but more on that later). Connecting data points allows you to dig deeper and analyze employee data for actionable insights.
Now that you have decided on what metrics will drive your objectives, you can begin to slice and dice the data across the variables.
For example, let’s say you have a company-wide turnover of 12%. You can now look at turnover by demographics, tenure, performance, engagement, learning, location, job or department. This turns a generic turnover understanding into a very specific and holistic one.
4. Creating insight: HR analytics
Here is where you get into analyzing. Look for meaningful patterns, identify gaps, track data, areas of opportunity, hotspots and determine the outliers or anomalies.
When deciding what kind of analysis to use, remember your objectives. And most importantly, understand where the most value gets created and by who.
For example, for Time-to-Fill, analyze this for different departments or business units to identify which areas are experiencing longer hiring times. This segmentation can help allocate resources more effectively to speed up critical hiring processes.
Here are some examples of other kinds of predictive HR analysis:
- Flight risk analysis: Predicts the likelihood of employees leaving your organization, so you can put in place proactive measures or policies to retain your top talent.
- Skill gap analysis: Predicts future skill requirements and identifies gaps in your team to guide and shape training and development initiatives.
- Employee performance prediction: Forecasts future employee performance based on employee historical data. You can identify potential high performers and those who may need additional support.
So you got some data and analysis, what are you going to do with it? Your decided action should drive continuous improvement in your focus areas based on your objectives.
Such as, employee development, workforce planning, onboarding, recruitment, manager training. Actions should accelerate the delivery of your determined business objectives.
For example, for cost-per-Hire (CPH), if you segmented it by geographic location, you could see differences in recruitment costs across locations. Your action would then be to determine which areas get expansion or decreased investment.
Siloed employee data
As you can see, Otto’s HR metrics and HR analytics system is holistic. Each step and HR analytics tool is interconnected and feeds into the next.
This is in contrast to how many people think about people operations or human resources. Most think about separate areas of HR management, especially when we analyze data, such as:
- Management support
- Employee growth and development opportunities
- Employee performance
- Engagement and retention
Most regard each of these separate points in time. For example, people leaders often fill a role and then pass the employee to their direct manager.
Otto argues that this drives inconsistency in HR systems and workforce planning. And, is one of the greatest contributing factors to high employee turnover and churn.
HR analytics tools: Siloed data doesn’t help
Many HR professionals and HR teams look at employee data or feedback at different stages of the employee journey when struggling with acquisition or retention. However, they do so in a way that is siloed.
Otto argues that this amplifies the problem instead of fixing it, especially if you have complex data sets. He explains:
“When it comes to turnover, you need to understand what's happening over a span of time, the whole employee experience and journey. If you look at onboarding and retention, for example, as separate entities, you're going to be looking at noise or making assumptions based on incomplete or inaccurate data.
This is what I call simply throwing technology at a problem, it may help short term with a few employees, but for long-term? You’re wasting your time.”
Otto further suggests that in order to make effective changes to employee retention, “data collection and analysis needs to be ongoing…you need to be able to examine data in a consistent way, that’s essential. It can't be ad hoc.”
For Otto, this is how your people team moves from data-informed to data-driven.
A holistic, data-driven and consistent approach
But why does a holistic approach drive more value for your team when it comes to people data? Otto argues that people teams should oversee and examine the entire employee lifecycle to have a comprehensive understanding of employee needs. '
Drive business goals
As discussed above, the line between people operations and business goals becomes much clearer with such a holistic and data-driven approach. You’ll be able to easily measure the impact of your interventions on business outcomes, and then focus on areas that drive the most significant value.
Create personalized and inclusive experiences
With a holistic approach you can understand individual employee preferences, career aspirations, and performance patterns. You can then tailor employee development plans and rewards to suit your team member’s unique needs.
This approach can also assist in improving and measuring diversity and inclusion. When you analyze demographic data and employee feedback holistically, you can create more inclusive and comprehensive policies and practices.
Foster honest two-way communication
Two-way employee feedback and communication is also critical for the holistic approach to HR data management. The right HR analytics tool or HR software should foster this kind of communication for employee engagement.
When an HR professional thinks about regular communications between employees and people teams most think of a quarterly employee survey, exit interviews or even a stay interview. Otto argues that for communications with employees to be effective it has to be more consistent and two-way.
Otto does acknowledge that this process is not always comfortable. He says:
“Establishing effective communications within an organization is not always a comfortable process. There is friction and uncomfortable discussions. But, that should not dissuade anyone from doing it. This is the reason to do it.”
Otto offers what this could look like in practice:
“For example, everyone should understand why an organization is doing what it's doing. Why it's taking certain actions, and prioritizing certain projects and how decisions are being made. Employees may not like the answer, but they should know. For me, that is an employee's right.
Communication doesn’t cost any money. It just requires focus… it is a direct path to lasting employee retention and engagement."
Example of holistic hr metrics
Track which recruitment sources or channels yield the best results over time and evaluate which hiring managers and practices get the best results.
Provide new hires early access to documentation and resources that thoroughly review company culture and the operational framework for the company, their team and role.
Analyzes data to identify patterns and understand why employees might be leaving. Identify specific demographic or role-related retention issues and implement targeted retention programs.
Create ongoing and consistent communication pathways for employees that allow for two-way communication and feedback. And, communicate how specific employee (not just team) projects contribute to specific business goals.
Consistently extract data across the journey to gain insights into employee needs, career goals, absenteeism, pain points and skill gaps. Find trends and patterns and feed insights back into processes and culture to improve the whole employee experience.
Otto believes that this kind of data-driven approach is really the secret sauce for long-term and impactful employee retention.
“If you've got engaged employees, a lot of other things can be less than ideal. Employee engagement is your organizational foundation. For me, it’s the most essential ingredient. With healthy engagement, your chances of success and growth are much, much higher.”
HR metrics and analysis: not one size fits all
However, Otto warns, this does not mean to apply a cookie cutter approach to human capital management and people data.
“It’s important to remember when we talk about being strategic around acting on trends and patterns in the employee journey this doesn't imply a cookie cutter model.
Even if two companies in the same industry are dealing with similar retention issues the same strategies or approach won’t work, and it shouldn't. Each company has unique employees, customers and characteristics. That’s why consistent data collection is key, to understand your unique problems and the solutions that drive your specific business goals.” - Otto Berkes, CEO at HireRoad, Co-founder of XBOX
Earned Wage Access (EWA) as a strategic HR tool
Earned Wage Access (EWA) enhances employee financial wellness and satisfaction for today’s employee. Employees can access their wages on-demand, which reduces financial stress.
We asked employees, who currently use ZayZoon’s Earned Wage Access, a few questions to see the impact of using this tool on their performance, tenure and motivation at work.
When asked, “on a scale of 1 to 5, how much does the availability of ZayZoon’s Earned Wage Access motivate you to perform well at work?” 78% answered 4 or 5.
ZayZoon’s Employer Connect: HR analytics software for employee financial stress
ZayZoon’s Employer Connect is a suite of communication tools that enables you to determine which worksites are using your EWA program and how often. It is an HR analytics software that unlocks insights into workplace financial stress and productivity.
This workforce data helps HR teams identify trends related to financial stress and productivity. Its an HR software that can help you take action and make strategic decisions that will improve workplace satisfaction and reduce turnover.
ZayZoon: data-driven approach to HR
As the data shows, financial empowerment and HR analytics software is not just a benefit; it’s a high performance enhancer.
If you want to talk to a real human being to learn more about HR analytics software, HR analytics tools, employee financial stress and Earned Wage Access or how ZayZoon can help improve your performance management, feel free to get in touch. We’re always happy to talk.