In fact, according to a new report from The Conference Board, "today’s human capital professionals have yet to move from being reactive to proactive and predictive."
During the past two decades, HR functions have aggregated volumes of information about the workforce. However, many of today’s human capital professionals are working with inconsistent, basic information, contend authors of the report, "Human Capital Analytics: A Primer." Human capital functions that embrace and employ predictive analytics to the fullest are finding themselves more closely aligned with business strategy than those that do not, they note.
The report, completed with contributions by members of The Conference Board Research Working Group on Human Capital Analytics, was co-authored by Jac Fitz-enz, "the father of human capital strategic analysis and measurement," Patti Phillips, president and CEO of the ROI Institute, and Rebecca L. Ray, senior vice president, human capital at The Conference Board, and the leader of the Human Capital Practice.
The goal was to get a better understanding of the current state of human capital analytics in terms of challenges, guiding principles, processes, models, and standards, and to identify the metrics and best-practices that can lead to rapid development and deployment of a solid human capital analytics function.
HR professionals need to embrace analytics, develop capability, and recognize analytics' use in positioning human capital investments as drivers of organizational strategy, conclude the authors, noting in the report the need for consistency in training, processes, and methodologies.
Additionally, the authors conclude that human capital analytics practices:
Should be built on a foundation of guiding principles that support the practice in driving strategic outcomes, involving multiple perspectives, balancing analysis with information needs, and ensuring sustainability and transferability.The report notes that there is no one best human capital metric for any one process or initiative, and that the best metrics are those that answer the business questions at hand.
HR professionals face common challenges in creating an effective human capital analytics capability that spans geographic and industry boundaries. The challenges include:
- Getting senior leaders and executives to recognize the value of human capital analytics initiatives
- Effectively relating the impact of human capital analytics initiatives to business outcomes and the bottom line
- Aggregating data into a single, centralized database with consistent, quality data
- Developing the necessary systems, technology, analytical skills, and resources
- Using tangible measures to measure the intangibles
- Moving from the reactive to the predictive
The report maintains that successful, analytics-based HR practices need to drive strategic outcomes, involve multiple perspectives, balance analysis with information needs, and be sustainable and transferable.
What do you think? How can HR departments best utilize analytics?