Gartner’s recent survey, Top 5 Priorities for HR Leaders in 2023, points to “Leader and Manager Effectiveness” as the leading concern of most HR managers, with 60% of them prioritizing this issue for 2023.
It’s not surprising, considering the talent shortage and that organizations tend to promote high producers to management roles without enough, or any, management experience.
Close behind the concern with leaders’ skills gaps is “Organizational Design and Change Management” (53% of respondents prioritized this). Meanwhile, “Employee Experience” (47%) was the third highest concern for 2023.
What do these three HR concerns have in common?
They can all benefit from the strategic analysis of HR metrics.
People metrics (also named HR, talent, or workforce metrics) are KPIs for any work-related people activity. They help organizations assess the effectiveness of their HR initiatives.
A person or HR metric provides a quantifiable measure of any employee-related behavior or condition, for example, the turnover rate, the cost-per-hire, or the level of employee satisfaction. It is value neutral.
The value of people metrics only comes after you analyze them.
People metrics, once analyzed, can provide evidence of performance against goals. Analyzing your people metrics can help you drill down to the context and causes of even your most persistent problems.
Such data-based information is useful for designing effective solutions. It’s much better than guesswork or false assumptions.
People metrics can include information on demographics, salaries, skills, length of service, how happy your employees are working conditions, employee career aspirations, and much more. The data you collect will depend on the problem you’re trying to solve.
People metrics can be critical in a crisis, or whenever you need to make the right decision quickly. But they’re also routinely used for improving business performance by tracking data, such as absenteeism, engagement, productivity, and many other kinds of employee or manager behavior.
Metrics in action
Let’s consider a sample scenario. You may sense some supervisors are struggling to manage hybrid workers and flexible workflows. You may also strongly suspect some managers lack the essential coaching skills to help employees. But should you really be guessing about that?
It’s better to know, based on data. You can set up HR metrics to measure the nature and extent of managerial performance, track challenges they have, and then analyze the resulting data for insights to help you design effective management training.
Or consider another scenario related to employee experience. The Gartner survey found that 44% of HR leaders believe their organizations do not have compelling career paths for their employees. However, career paths are critical for retaining good, highly skilled employees, who may leave you if there’s no scope for learning or progression.
People metrics can help here too. You can gather metrics to measure the impact of a clear career progression on employee experience.
Alternatively, if you already know your organization lacks this (so there’s no point in measuring it), you could select metrics to measure opinions on the issue. Include surveys to find out what learning opportunities your employees (and managers) want. Then align this with business goals, and brainstorm options for more or different learning, mentoring, or short-term projects to stretch employee skills.
You can then make the case to management, presenting the strategic advantage of better employee retention to be gained from reinventing learning options and providing better progression paths.
There are many ways to use people metrics, combined with analytics, to better manage and engage employees. HR raises the bar for evidence-based thinking.
But there’s a problem. While most HR departments know the benefits of leveraging data, many are still not there yet. Or they may use data in rudimentary rather than higher level, innovative ways.
True, some companies have made genuine progress, but they are technology-based data natives like Google, or have had the resources to spend years on getting it right. Many firms still struggle or wonder how to get started.
There are several reasons for this, including the lack of funding for HR data literacy training. But perhaps the most critical reason is the lack of support from your executives, who may not themselves use data analysis to inform decisions.
HR may genuinely want to invest in its own data skills. But how do you do this if your company culture, from the top down, doesn't value data?
Top leaders drive corporate culture, especially the CEO. If the CEO doesn't value analytics capability and the superior decision-making that can flow from it, there can be little momentum toward becoming data-driven.
3 Reasons to embrace people data
However, there are three reasons, it's now your time to take the lead in using people data to build a higher-performing organization:
- You want to do it. Whether from a sense of self-preservation, a desire to add value, or both, most of us want to make better decisions.
- You need it. The value in people data doesn't just affect HR. It drives the entire organization. The old idea of "we do business and HR does people stuff" doesn't work anymore. HR's role is to help the organization become people-oriented—because that's how you derive the best value from people.
- It's required. There is increasing pressure on companies to measure and report on human capital—the value of their people. A recent Deloitte report notes that in late 2020, the Securities and Exchange Commission (SEC) amended Regulation S-K to improve disclosure of human capital issues. In August 2021, SEC Chair Gary Gensler signaled that more requirements may come. This requirement is motivating CEOs.
So, we must report the value of our human capital, tell stakeholders what we do to maintain and improve it, and align learning and talent activities and programs to business strategies.
We can do that by developing the right measures and creating data-driven teams.
What Does Data-Driven Mean?
Data-driven HR, or intelligent HR, is about using data in a "smart way and extracting insights that not only improve the performance of people within the company (including its HR team) but also contribute to the overall success of the organization" (Bernard Marr).
Marr shows us three good ways an organization can use data:
- Using data to make better decisions. Data-informed algorithms can make better decisions than hiring managers. A bad hire can be costly. Anything you can do to reduce the probability of failure will be a net gain for your company. But that doesn't mean that algorithms should decide unassisted. They can't replace the value of human judgement.
- Using data to improve operations. There are thousands of ways to reduce costs and save time by analyzing workflows and communications. For example, data analysis of candidate sourcing and employee success can show you where to source your organization's best people.
- Using data to understand your customers better. In HR's case, the customers are employees, managers, and executives. People data (with controls) can give you dozens of ways to improve the employee experience.
Getting the CEO and Managers on Board
It might seem unlikely that you can bring decision-makers along if they are bound by the idea that their gut instincts and judgment are the only way to make decisions. However, you can gently lead them to a new point of view.
Frame your discussion as a way for them to solve their problems. Help them see they can learn a lot about leading their people to greater productivity using the data their people create.
We see three ways that we might influence their thinking (use all three):
- Show them some case studies of well-respected companies that have used people data to make their companies more competitive without an enormous investment.
- Show them discoveries in your data that led to you making better decisions and getting faster results.
- Do a quick "skunk works" project with your allies in the business to prove how it works.
You can build a data-driven HR team. You can also lead your organization to a data-driven future if you involve the entire organization in the effort.
Pixentia is a full-service technology company dedicated to helping clients solve business problems, improve the capability of their people, and achieve better results.