3 steps to use data for refining your HCM strategy
Among the true best-in-class organizations, there’s a basic understanding in place about human capital management – you don’t just need a great strategy for managing your employees. You also need a system for measuring your progress and communicating your results. In other words, you need management and analytics.
It’s clear today that the best organizations are using analytics to improve their business results. According to April 2015 research from the Aberdeen Group, 50 percent of best-in-class organizations have defined metrics in place for HCM, a sharp increase from 38 percent a year earlier. Additionally, 44 percent are communicating their HCM progress on a consistent basis, and 82 percent have demonstrated better collaboration and knowledge sharing over the last two years.
All of the above strategies are worthwhile. HCM analytics are invaluable – they help organizations deliver smarter, more business-focused insights while also anticipating workforce disruptions before they strike. Here are a few of the analytics rules I live by:
- If you don’t measure it, you can’t manage it.
- If you can’t take action on it, why measure it?
- People will behave according to the metrics and targets, so choose wisely!
At Ceridian, we’re big on analytics. We recently held a detailed webinar on this topic, entitled “Refine Your HR Strategy – Data is the Key.” The question was, and remains: How can your organization use analytics?
Here’s the short answer. To provide real value, you should start by identifying the HCM issues that impact your company’s ability to execute its strategic initiatives.
The following three-step process can help you to identify those issues, analyze them and create a plan of action.
1. Identify and gather the data to gain visibility to the issue
There are many common metrics that companies look at for measuring their HCM progress. Retention rate, turnover rate and cost per hire are three important ones, for example.
To zoom in on the metrics that matter most for your business, focus on what specific problem you’re trying to solve up front, and figure out how that problem really impacts the business. You don’t want to simply gather data for the sake of gathering data.
For example, if turnover is an issue for your organization, start by identifying the turnover rate, but remember – the rate doesn’t tell the whole story. You have to go a little deeper.
2. Analyze the data
After you’ve performed some statistical analysis, you may find that there is a strong correlation between employee engagement and turnover. What will the impact be if you were to implement initiatives that focus on employee engagement in your company? Think deeply.
3. Choose a course of action
Your action plan must be influenced by the analysis you’ve done and the priorities you’ve chosen. Ask yourself:
- Did you factor in cost/benefit analysis?
- Have you aligned your analytics with your business objectives?
- Are your tie-breakers determined by something logical, not arbitrary?
If you’re confident in your decision, then take action – and continue to monitor your progress later.
It’s important to engage leadership when it comes to using HR analytics. They can help you to identify a problem, anticipate what’s next and lay the groundwork for action.
Watch this special webcast, “Refine Your HR Strategy. Data is the Key” and don’t miss a live view into Dayforce HCM’s reporting and dashboard capabilities.
Greg Trok is VP of Consulting Services at Ceridian. Follow him on Twitter at @.