While scores of articles have been written about the potential
for people analytics to transform human resources from an operational function into a strategic resource, so far HR’s fundamental hurdle has been its inability to quantify its ultimate impact.
A key to changing that, experts say, is to go beyond the HR
numbers. To demonstrate how workforce measures can impact
the bottom line, HR professionals must meld those metrics with
“Metrics essentially give us a way of qualifying the health of
our organization, and, to that end, HR metrics are now differ-
ent,” says Ross Sparkman, head of strategic workforce planning
for Facebook in Menlo Park, Calif. “They’re measuring how the
HR function is doing as a whole and also how we’re leveraging
the people in the organization to maximize the performance of
That’s the goal, but the reality often falls short. “Most peo-
ple use data the way drunks use the lamppost: for support rather
than for illumination,” says Alexis Fink, Intel’s Portland, Ore.-
based general manager of talent intelligence and analytics. HR,
she believes, should focus less on responding to decisions that have
been made and more on training executives “to come to you fur-
ther upstream, to influence the decision.” For that to happen, HR
needs to have a better grasp of how metrics and analytics work.
Start with these nine steps.
UNDERS TAND THE ROLE METRICS PLAY IN TALENT
First, you have to recognize the difference
between metrics and analytics. “HR metrics
are operational measures, addressing how efficient, effective and
impactful an organization’s HR practices are,” Fink explains.
“Talent analytics, on the other hand, focus on decision points,
guiding investment decisions” that impact the workforce and
Essentially, metrics use data to assess things like efficiency and
performance, while analytics harness those measures to help people understand or predict how changes will affect an outcome.
For example, analytics that combine information on employee
performance levels and retention data may show you that, once
workers reach a certain level of proficiency at their jobs, they’re
prone to leave. That, in turn, can help you look for ways to address
whatever dynamic is nudging those employees toward the door.
You may find that your competitors offer better compensation or
have better career advancement programs and opportunities.
Put another way, metrics tell you what is going on,
while talent analytics get at what to do about it, driven
by both good data and good science. “Metrics are about
getting the numbers right, and analytics are about finding answers in the data,” Fink says.
“Ultimately, metrics define what you’re shooting for.
They define your objective,” says Michael Housman,
UNDERS TAND THE QUES TION FIRS T, THEN LOOK AT
workforce scientist in residence at people analytics firm
hiQ Labs in San Francisco. “They shouldn’t be a moving
target. If you want people to stay in their job, for example, you
look at things like turnover and attrition. The goal is to know
what you’re trying to improve.”
Though metrics can be used to monitor performance, most data scientists emphasize
their use in gathering the intelligence needed to resolve an underlying issue or create a new strategy.
“Take turnover. High is bad, low is good. But what story
ALWAYS BUILD A BUSINESS CASE
is it telling?” asks Jennifer Currence, SHRM-SCP, president of
OnCore Management Solutions, a human resource strategy con-
sulting company in the Tampa Bay, Fla., area. “Why is it high or
low? Is it recruiting? Demographics? Who’s retiring? Is it high in
just one department? Why? Is there not enough training there?
If not, who’s the manager for training in that area? The initial
metric gives you a start to digging down deep.”
The point is to “get past the ‘what’ and fully understand the
‘why,’ ” says Cecile Alper-Leroux, vice president of human capi-
tal management innovation for Ultimate Software in Weston,
Fla. “The benefit of using metrics is that the decisions are better-
informed and backed by facts—rather than hunches—and thus
make key people decisions far more ‘sellable’ to the business.”
That gets to the heart of the next point.
It has been said, and said repeatedly, that
human resources struggles for relevance
because it doesn’t speak the language of busi-
ness: numbers. “HR has to be able to show how its dollars impact
ROI [return on investment]. It has to stop acting as a cost cen-
ter,” Sparkman says. “You can’t act like your costs just happen
to have a good impact.”
Instead, focus on building the business case for what the
department is doing. As an example, Fink talks about digging
into employee departures. After calculating the exit rate, look
into what might be driving workers to leave your organization.
You might find that certain qualities in a manager discourage
some types of employees while other characteristics deepen those
same workers’ commitment to the company. Delving further may
define what you’re
They define your
—Michael Housman, hiQ Labs