How People Metrics Can Improve Business Performance
There’s a lot of buzz going around Big Data, but the question is, can Big Data really help to enhance business performance? Leading organisations are utilising Big Data is to manage their employees better, as it helps them to understand the true needs of their employees. People analytics can depend on metrics for identifying high performers who are at risk, predicting turnovers, and determining the cost of all this to formulate appropriate retention strategies.
However according to a review conducted by Harvard Business review, despite being aware of the importance and utility of Big Data, only around 51% of businesses truly make use of people metrics. Another survey revealed that 47% of companies which were surveyed projected a lack of analytical talent in the HR teams. This posed a significant challenge to properly conclude as derived from people metrics.
So the question is, how do the best in class companies approach this? A lot of them have started to think strategically as to how they can gather, process, and optimally use people metrics effectively.
Analysis of People Metrics
We are living in an era where we have a data everywhere. Most of this data has been created in the last six years than in entire history before. This big data revolution has brought about a plethora of new opportunities along with a mammoth challenge. It is not just enough to find all this relevant data, but the bigger challenge is to find out ways to use it.
Knowing Where to Locate this Data
People metrics is usually derived from a number of contrasting and distributed sources. One of the top most challenges faced by a lot of organisations is getting access to people metrics. This data usually lies around in various systems such as human resource information system, payroll system, general ledger, spread sheets, slides, and talent management systems. The challenge is that these data sets are scattered, and they don’t interact with each other. So when you are trying to map specific data points to each other to gather insights, it becomes impossible because these data sets are found all over the place.
In today’s business scenario workforces are much more fluid and dynamic with the presence of freelancers, contractors, gig employees, and outsourced workforce working in partnership with the regular payroll staff. Hence, such organisations find it challenging to maintain an accurate and updated picture of a simple headcount.
Organisations find it incredibly challenging to aggregate this data. Even though technology has considerably improved in the past few years, however, it is still not at all easy to find the apt technology solutions to help in effectively synthesising the collated data. Another challenge is to evaluate the prevailing technology itself, as you need the appropriate people to help in assessing the probable solutions and then to seek long term potential in these solutions to leverage actionable data.
There are also a lot of considerations that the teams need to keep in mind. For instance having an idea as to how long will it take to implement the chosen solution across the business, the associated cost, how this technology will integrate with other systems, and the reliability of the solution in the long term. The teams must also consider the functionalities and the value propositions that the chosen solution offers.
For instance, teams need to check if there is a requirement to build a central repository or a data warehouse. To facilitate data analysis, the first step is to collate the data. However, it is expensive, time-consuming, and unpredictable to build a data warehouse as it has a significant failure rate.
It is quite easy to lose track and get lost in the midst of lucrative complementary and competing packages. What is actually required is to establish the need and figure out a strategy to meet these needs. This will help to simplify the identification of the appropriate system for the organisation.
Knowing What Questions to Ask
Organisations find it indeed challenging to interpret the collected data and weaving a story around it. The majority of organisations are caught up in the standard people metrics based process which restricts the potential of this collated data by restraining the output, owing to their archaic ways of thinking.
To make this data to work effectively, you must have an understanding of what questions to ask. One of the key things to keep in mind is that when you approach talent and people metrics, taking a strategic approach will yield a better outcome. Try to understand what you wish to extract from your data ahead of time instead of reporting what already exists.
HR teams need to be positive in what they wish to achieve from their collated data. They must look for ways to build and deliver talent insights by focussing not on standard people metrics. Instead, they must look for talent insights which can help to drive genuine business results. This means they should focus on employees with certain skills or those employees who have the potential to improve the overall business of the organisation. In short, the HR teams need to start thinking strategically regarding the potential of people metrics and comprehending and integrating data across an entire range of business activities and functions such as talent acquisition, talent review, diversity, compensation, benefits, and succession planning to name a few.
Asking the following four key questions will help you on your journey to unlocking the power of people metrics.
- What are the probable risks that may impact your best players?
- Where do you need to source your top talent from?
- What are some of the selection parameters which have worked for you in the past?
- What is the tentative ROI on long-term incentives for the potential successors?
These questions will help the leaders to figure out the kind of talent incentives to apply to keep the top players on track.