HR analytics is most successful when it is positioned strategically; is focused on business impact, supported by key roles and capabilities; is captured in clear processes and responsibilities; and makes optimal use of available, high quality data.
These four key success factors, based on data-driven research and analysis, are rated as ‘most critical’ by organisations that classify themselves as experienced HR analytical users.
This is the conclusion of the Top Employers Institute and Bright & Company | HR Strategy report, Organising for HR analytics success: Results of the 2016 HR reporting & analytics study.
The study surveyed more than 200 executives in 36 countries, exploring trends and developments in the organisation and execution of reporting and analytics.
Although maturity in reporting is correlated with maturity in analytics, in practice, most organisations do not focus enough on analytics to make it successful. Less than one third of the respondents rated themselves as either ‘Advanced’ (24 per cent) or ‘Expert’ (7 per cent) at HR analytics.
Rob van Dijk, leading expert HR analytics at Bright & Company, says, ‘Only when organisations take analytics seriously with senior management support, can they make it a sustainable success. By demonstrating business impact through HR analytics, HR is able to claim a place for data driven at the core of strategic decision making.’
James Gooding, director of UK operations at Top Employers, says, ‘These four success factors can be directly allocated to a high level of analytics maturity. Strategic positioning of analytics is by far the most important of the four elements.’
He adds, ‘At the same time, analytics experts gain the most, in comparison to beginners and more experienced practitioners, by having clarity on processes, roles and responsibilities.’
Besides reporting on the key success factors, the report also provides tips for organisations on how to take next steps in HR analytics.
Creating value by proving business impact
Analytics is a strategic tool, and experts position it as such. They organise all analytics efforts to optimise the impact of HR interventions on their business and increase the chance of successfully attaining business objectives. For instance, experts know what issues business management are facing (80 per cent) and have strong senior management support for data driven HR (87 per cent).
Building the right crew and capabilities
For getting the right analytical insights, specific roles and capabilities are needed. Analytical capabilities, IT capabilities and management capabilities are all important, but experts acknowledge the importance of the business partner as a linking pin between business and HR (93 per cent).
Many organisations struggle to attract good analytical talent in-house (38 per cent possess such capabilities), while others benefit from a company-wide central analytics function (42 per cent).
Managing processes, roles and responsibilities
Successful execution of analytics requires good governance and cooperation. Developing and documenting guidelines on execution is an important step in creating a more data driven mindset.
All key players and other stakeholders are on board and involved, know what to do, and understand the relations and interdependencies between roles (38 per cent of total respondents agree).
Dealing with data and IT issues
Data is the most important fuel of any analytics project. Having access to high quality data is often a no-brainer. Yet, it does not mean most organisations got a perfect score in this respect, on the contrary (e.g. on average, experts outperform practitioners 83 per cent versus 48 per cent).
Plus, many organisations cannot fully rely on their IT function and are lacking support from their CIO in promoting and implementing analytics in the organisations.
Further reading on HR
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