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.
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:
Before we dive into what metrics and analytics you can use, what are HR metrics and analytics anyway?
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?”.
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.
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:
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.
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:
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.
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:
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.
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.
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. '
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.
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.
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."
Hiring —> |
Onboarding→ |
Retention—> |
Engagement —> |
Ongoing analysis |
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.”
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
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