How to tell the difference between good and great HR analytics – part 1

14/12/2012 at 15:42 9 comments

Question: What is the difference between good and bad analytics?

The answer is probably best illustrated like this;

This is bad analytics:
You have received the latest performance management data from all five divisions. You know from experience that the data is questionable – in two of the divisions many of the inputs are the default settings. You also hear that the managers have a somewhat relaxed attitude towards the accuracy of the data (to say the least). Your report show that absenteeism is flat at a reasonable level. You report this with satisfaction.

This is ok analytics:
You get the latest voluntary employee turnover data and see that the figures are trending upwards. The level is above the 6 month moving average. You dig deeper into the data and see that it is in particular in three division the employee turnover has been higher than expected. These division have three things in common; a new leader has been employed, workload has increased and they are client facing. You contact the relevant HR partner and suggest that they implement the usual retention initiatives.

This is great analytics:
You get the latest voluntary employee turnover data and see that the figures are trending upwards. The level is above the 6 month moving average and 2 %-point higher than sector-adjusted benchmark. You dig deeper into the data and see that it is in particular in three division the employee turnover has been higher than expected. These division have three things in common; a new leader has been employed, workload has increased and they are client facing. You then decide to interview relevant people in those divisions including leaders and employees as well as the HR partners. You read relevant academic research and case studies on effective measures against voluntary turnover in your particular sector and discuss this with experienced managers and HR partners within your company. You suggest three actions; coaching for the leaders, competency profiling to match job demands and team building. Your data suggest that these three initiatives will reduce the voluntary employee turnover from the current rate to 1 %-point below the benchmark at a ROI of 55%

 So what is the difference? Great analytics

• are made with reliable data
• are combined with quantitative data
• use an evidence-based approach
• is predictive