HR leaders often grumble about the challenges of building HR analytics capabilities. But when Christopher Collins, a professor and director of Cornell University’s Center for Advanced Human Resource Studies, sat down with nine executives from organizations including AstraZeneca, BAE Systems and Barclays earlier this year to discuss the challenges of HR analytics, he discovered that the most pressing issues have more to do with storytelling and organizational structures than HR data itself.
Collins says these executives expressed frustration with the slow pace of adoption for HR analytics among large enterprises when many of the group’s participants believe that there’s urgency to do so. By linking HR analytics with key business outcomes, and positioning HR analytics teams in top leadership positions, executives believe they can not only significantly accelerate the adoption process but also make a positive impact at their organizations.
Iain McKendrick is one such executive. McKendrick is global head of HR strategy, planning and analytics at pharmaceuticals giant AstraZeneca, which hosted the Cornell Center’s working group in London and he believes that analysts need to connect their work directly to boardroom priorities. “It’s not very helpful if your analytics team is populated with the most incredibly intelligent and highly qualified statisticians if they have little ability to communicate with business leaders on issues that are relevant to the organization.”
Rather than “gaze at our navel and cogitate on what beautiful pictures we can draw with our data,” McKendrick says demonstrating the value of HR analytics to key stakeholders, and how it can be applied to specific lines of business, can help reshape a company’s outlook on HR analytics, and enable executives to make more informed business decisions.
Other insights from the HR executives’ meeting:
The importance of stories. The Cornell Center’s working group also revealed that HR leaders who reshape HR analytics findings into compelling, jargon-free stories have much better luck convincing business leaders of the business value of HR analytics. “The art of being able to bring out the business insights of data analysis is absolutely a critical skill,” says Collins.
A debate about centralizing analytics teams. But while participants agreed on the importance of linking HR analytics to business strategies, and the art of storytelling, Collins says there was some debate on whether to localize analytics within specific business units or locations or focus on companywide analytics. For companies with 100-plus locations such as AstraZeneca, McKendrick says setting up regional analytics capabilities is simply too cost prohibitive. Instead, he says, “It makes more economic sense to centralize the capability,” especially when it allows the company “to see patterns across the whole organization.”
Collins, on other hand, argues that HR leaders need to “understand, at their own level, what their numbers mean for their business.” For example, he says scoring a 4.1 on an employee engagement survey may mean different things to different lines of business, and regions around the world, depending on business objectives, economic realities and workforce size.
The need for C-suite support. There was, however, widespread agreement on where the analytics team should sit in an organization. Although homesteads vary from the executive suite to the payroll department, McKendrick says, “HR analytics must have sufficient support and visibility at the highest level of the organization.”
That’s because granting an HR analytics team access to other business line leaders allows them “to cross-pollinate ideas and data sets with marketing, finance and other areas of the company,” he adds.
Collins agrees. “It says a lot about a company when they have an analytics person who is a direct report to the chief HR officer,” he says. “That sends a strong signal as to the value and importance of analytics as opposed to just embedding it deeper in another function.”
A higher profile for the HR analytics role. Giving HR analytics team members a seat in the corporate board room also increases a company’s chances of recruiting top analytics talent– a challenge for many of the Cornell Center’s working group’s participants.
“Typically, HR organizations don’t pay as much as marketing organizations or finance organizations for their analytics professionals,” laments McKendrick who says he’s seen “a dearth of people queuing” at his door for a position. “We’ve been too stove-piped in the way we think about the rewards structures. Plus, I don’t think we’ve done a great job in selling it. Part of the pitch needs to be not just the exciting nature of the work but the formulation of key elements of the company’s strategy.”
Collins agrees. “People are afraid to get lost in the HR or analytics department which they perceive sits in the basement somewhere,” he says, noting how tough it is to convince payroll employees, for example, that switching to analytics is a smart career move. Proof that perhaps business leaders aren’t the only ones in need of convincing of HR analytics’ business value.
Cindy Waxer, a contributing editor who covers workforce analytics and other topics for Data Informed, is a Toronto-based freelance journalist and a contributor to publications including The Economist and MIT Technology Review. She can be reached at firstname.lastname@example.org or via Twitter @Cwaxer.