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Employment Today, HR Solutions - Thomson Reuters

Employment Today, HR Solutions - Thomson Reuters



Employment Today Magazine

Measure for measure

What gets measured gets managed. Stephen Moore examines the benefits of using people analytics to transform HR’s role and bottom line contribution.

In every business, every day, managers constantly seek out opportunities to improve efficiency and reduce costs. Unfortunately, however, all-too-often they overlook one of the single biggest opportunities for improvement—their workforce, which on average constitutes 60 percent of annual operating expenditure incurred.

Why is this? While they are proficient at measuring sales or production or profits, in most organisations managers (and HR professionals) are untrained and unaware of how to effectively measure, report and evaluate workforce management, performance and business contribution.

Consider the benefits if people analytics became an integral part of day-to-day business operations: increasing productivity, reducing expenditure; increasing utilisation, reducing waste or inefficiency; developing capability and improving service. The opportunities are endless, all contributing to improved bottom line performance.

WHAT DO PEOPLE ANALYTICS CONTRIBUTE TO THE BUSINESS?

People analytics provide an integrated suite of workforce management reports, tables and templates. When properly designed and executed, people analytics inform executives, line managers and human resources professionals where current workforce management and performance is acceptable and where improvement is required.

Thereafter, they enable the creation of effective intervention strategies and programmes that will deliver improved results which contribute to a better bottom line, improved service and increased shareholder value.

WHAT IS THE IMPACT UPON THE WORKFORCE?

An increased emphasis on people analytics will inevitably lead to an improvement in the working environment provided for all employees. The advent of regular management reporting will result in greater emphasis being focused upon:

  • • 
    Role clarity and purpose;
  • • 
    Finding more efficient and productive ways to get work done;
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    Identifying and developing skills and capabilities that improve staff contribution;
  • • 
    Building career paths that meet future resourcing needs;
  • • 
    Ensuring satisfaction and retention of the new and improved workforce.

When done well, people analytics provide benefits to all key stakeholders, including employees and HR departments too.

HOW CAN PEOPLE ANALYTICS HAVE AN IMPACT ON THE HUMAN RESOURCES DEPARTMENT?

Why is it so hard to discover that magical formula which enables every human resources department to transform itself from an operational support role to that of value-added business partner—to earn and keep a seat at the executive table?

The answer: because the solution necessitates an element not common in an HR professional’s DNA!

To successfully move from working in the business to working on the business, HR departments must embrace, engender and execute integrated people analytics that enable continuous improvement in workforce efficiency and effectiveness.

They must learn new skills in data capture, presentation and analysis that will engage organisational leaders and demonstrate the HR business contribution—what gets measured gets managed!

WHAT DO PEOPLE ANALYTICS LOOK LIKE?

There are seven key elements that combine to create integrated people analytics in any organisation.

1.
Measuring workforce accountability.
Workforce objectives: Ensuring your staff clearly understand position accountabilities and expected outputs. Have all your staff been given clear KPIs? Do they know what they need to achieve by a certain timeframe? Is this a formalised process?
Business benefits: Increased efficiency, enhanced delivery of key business plans, reduced duplication of workforce effort.
2.
Measuring workforce alignment.
Workforce objectives: Making sure your staff effort and contribution is linked with key organisational drivers. Can you draw a clear line from what the company goals and objectives to your staff individual KPIs?
Business benefits: Enhanced business reputation and standing. Increased longevity and sustainability.
3.
Measuring workforce efficiency.
Workforce objectives: Making sure that your staff are utilised and managed in the most cost-effective manner. What is the optimum labour mix in your organisation? What is the linkage between staff rostering and customer demand?
Business benefits: Optimum labour-cost management, enhanced pricing and profit margins.
4.
Measuring workforce effectiveness.
Workforce objectives: Making sure your staff are sufficiently capable and enabled to achieve optimum performance. Are they receiving the right training and mentoring? Is there a formalised performance management process is place?
Business benefits: Enhanced product/service quality. Optimising rework, returns, write-offs, litigation and waste.
5.
Measuring workforce resourcing.
Workforce objectives: Understanding your future workforce configuration and structure in order to develop integrated resourcing pipelines. Making sure your staff bench-strength and depth meets future business needs. Do you have the right people in place at the right time, at least cost and risk to your business?
Business benefits: Reduced labour replacement costs. Minimum disruption to desired service standards.
6.
Measuring workforce sustainability.
Workforce objectives: Making sure your staff configuration and composition can be effectively maintained into the future. What is your projected workforce age profile 10 years from now? What’s happening to average length of service and thereby knowledge vacuums?
Business benefits: Optimising long-term workforce capability and integration to underpin future business plans and objectives.
7.
Measuring HR department effectiveness.
Business objective: Making sure the HR team achieve its true potential and thereby contribution to organisational performance and results. How does your HR team develop capability and professional acumen? How do you measure the impact upon workforce performance from one financial year to the next?
Business benefits: Optimising strategic capability and business contribution, minimising administration and paperwork.

GETTING STARTED AND HEADED IN THE RIGHT DIRECTION

Creating effective people analytics does not necessarily require an immediate investment in integrated software solutions. Much can be achieved with limited resources if the HR team are determined to “roll-up their sleeves and get down to work”. To achieve the best possible results:

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    Start out by attending a structured training workshop to develop basic knowledge and understanding;
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    Search the market-place for practical “DIY” tools that will get you started and headed in the right direction (ie, Excel Workbooks and resource manuals);
  • • 
    Consider hiring a business analyst for a fixed period to create your initial reporting;
  • • 
    Establish a cross-functional steering committee to share the data collation/management load.

You will be pleasantly surprised at how much can be achieved when there exists a collective commitment from all key stakeholders to produce meaningful people analytics that add value to the organisation’s performance. You will also be surprised at how quickly your senior management team embrace your reporting, and thereafter allocate funding for serious software investment!

As previously mentioned, effective people analytics benefit all key stakeholders in any organisation, be they owners, investors, managers, staff or even customers. So, what are you waiting for? What gets measured gets managed!

STEPHEN MOORE is general manager Education & Capability for Riteq.

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