Many HR professionals are bombarded with blog posts and emails reminding them that if they don’t do something about people analytics, then they are missing out. It shows up in every trend report and “prediction” newsletter. According to Deloitte’s 2018 Global Human Capital Trends study, 84% of HR and business leaders view people analytics as important or very important.
But if so many people think analytics is so important, then why do business leaders struggle to find the time and money to properly invest in this capability? Why do organizations move slowly rather than prioritize it over other investments?
There are two primary reasons for this:
It takes more than a few Moneyball references (although they don’t hurt) to get buy-in from the C-suite and leaders within HR. Those who are most successful at gaining support for people analytics acknowledge that it can’t be self-funded by HR. Instead, they ask for an investment in the whole business.
If you are a people analytics champion, you need to build a business case that is:
Here is how to execute each of these three elements.
Before you address all the competing interests and tackle the C-suite, make sure you have all of your HR stakeholders aligned.
Through conversations (and not just a PowerPoint presentation), help HR leaders understand how an analytics capability improves both the efficiency of how work gets done in HR and the efficacy of the advice that HR gives to the business. Here is how this might look for different groups within the HR function:
When providing practical, tactical examples, break down the use of analytics to explain how surfacing a new insight will compel a people leader to make better decisions, and how the collective sum of those new outcomes contributes to an overall improvement in business outcomes.
Strategic examples are also essential to build your business case. Good strategic examples will emphasize the following:
Buy-in from your HR team does not guarantee the investment will be approved or successful. You still have to convince people who steward existing technology and guard data. Many of these people have a vested interest in preventing any change to existing projects, processes, and rules.
It’s important to be humble about your approach and acknowledge that there are many ways to provide the technology and team that delivers analytics.
Get ahead of the issues by showing the relative cost of each approach, the level of content that can make an impact, and the time it takes to get that content into the right people’s hands. Savvy analytics investors frame out all the options from the beginning and focus people on the fastest path to value rather than the politics of sunk costs.
You will encounter several traps along the way. “The ERP system can do this” is a common one. When someone says this, consider telling them the following:
Transaction systems are not built for holistic people analytics. Once we start delivering people insights, managers will start asking better questions. Questions that start with turnover turn into questions about which turnover really impacts our customers. This means going beyond the data available in a single ERP. HR recordkeeping systems are not built for consuming large amounts of business data. They don’t scale to bring in ATS, CRM, and engagement data. And worse, every time we want to answer “better” questions we will have to pay a consultant and do another change order with the vendor.
“Let’s just build a few visualizations on top of the data warehouse” is another trap. Consider making these statements when you encounter it:
How long does it take to build a new visualization? What’s the cost to maintain it? To answer the drill-down question? Most organizations have a queue to add new data sources, cleanse them and answer new questions. And experimentation (answering the wrong question to get to the right question) can be very expensive without a scalable approach. Often data scientists take up 60% of their time with routine reports because the tools are built for experts, not business generalists.
Deployment is not the goal – behavior change is. A platform that comes with pre-built content enables leaders to start gaining insights more quickly so they can collapse the time between implementation and results. Nobody wants to wait nine months to see the first results of a data warehouse project, and then another six to see behavior change in something like employee turnover. Business leaders need insights at the speed of business.
In the end, a people analytics investment needs to pass muster with the CFO, COO, and CEO. And it won’t just be measured against other HR requests – it will be assessed against requests made by sales, operations, and every other department.
This compels you to demonstrate how data-driven people decisions contribute to improved enterprise performance, whether it’s in the form of increased revenue, better employee retention, or enhanced customer satisfaction.
C-suite leaders are looking for “big bets” that can make a meaningful impact in financial performance or can de-risk the execution of a strategy. When communicating with executives, follow these guidelines:
That being said, the notion of a single capability for the enterprise can still be compelling for the CEO and CFO when framed correctly. Nobody will argue that the investment in leadership development, for example, is important. It’s built on the premise that when new behaviors are repeated with enough frequency, they have a big impact.
Consider how, when a professional baseball team hires a batting coach, the focus is on getting one better hit per player per game. When enough players make and sustain these small improvements, the team starts outperforming.
Always reinforce the very simple premise of people analytics: Deliver insights. Get them in the hands of people who will take new actions with those insights. Get people to take new actions with enough frequency to yield a meaningful outcome.
There is nothing more satisfying than seeing an executive’s eyes light up when she sees how small changes here and there can add up to a larger strategic outcome.
A successful people analytics investment means overcoming three decades of entrenched beliefs about HR investments.
It means shifting away from investments that simply make HR more efficient recordkeepers into funding a capability that delivers insights and predicts outcomes.
It means moving away from classic technology-driven projects with go-live dates to an agile approach that is always consuming new datasets and publishing guidance.
Finally, it means moving from report requests fulfilled by many people and multiple systems to placing analytics into the hands of people who make decisions.
When all this is taken together, it adds up to a solid case for people analytics that demonstrates value –not just for HR–but for the entire business.
A version of this article previously published on the Visier blog.
