Learn from leading HR organisations who understand how to use workforce data to deliver value for the business.
Volatility and uncertainty are everywhere. Post-pandemic changes to working patterns, the disappearance of old jobs and the emergence of new ones, and massive churn in the workplace – all pose complex challenges. Workforce analytics have the potential to help businesses make sense of this complexity and shape impactful solutions for the future. But often, this potential goes unfilled.
Our experience is that, in many organisations, analytical teams are focused inward, typically reporting on HR functional activities and human capital metrics. The report and dashboards generated, even though serious and expert, have little impact on how business and HR leaders address challenges in the world outside. It’s an inside-out approach to workforce analytics which is often limited, organisations can find better ways to deliver greater value and insights.
Pathfinders take an outside-in approach
There is, however, a group of HR organisations that are doing things differently. They use an outside-in approach. This starts with the questions the business needs answered and seeks to develop data insights to inform and inspire solutions. We call these organisations ‘Pathfinders’ and our recent research report highlights how this group is leading the way across all five components of HR transformation.
What’s distinctive about the Pathfinders’ approach is the way they build an evidence-insight-action value chain. The chain links all the parts of the organisation that need to be involved in developing and executing actionable insight: line managers, leaders, business partners, data analysts and project delivery teams. In Pathfinder organisations, data analytics is part of a horizontal endeavour that stretches across the organisation – not a vertical activity sitting solely within the HR organisation.
How to build your value chain
Our research found that the evidence-insight-action value chains used by Pathfinders are shaped by five key questions:
1. What questions do we need to answer?
When Pathfinders build the value chain, they start by talking to business leaders about their people-related questions and the role of people in improving business performance. At one bank, for example, the HR team discovered that leaders wanted to know the optimal mix of employee types (in terms of age, experience and education) in the branch network. This became the starting point for an initiative to investigate the make-up of existing branch teams, and link this to data on branch performance.
2. What data and sources of information do we need?
As well as using people data, Pathfinder HR organisations draw on sources from other functions to diagnose business challenges. (This is the type of connected approach enabled by our Powered HR solution.) Pathfinders also use enabling technology that goes beyond core human capital software to develop predictive insights. And they consult published research and other external evidence to build deeper understanding. After all, someone may have answered the question already.
3. What’s the story?
Pathfinder organisations think beyond Excel charts and present data in a way that inspires action. A good model is to tell the story created by the data in the way a newspaper front page would. So, with a headline and a first paragraph that summarises the key information, as well as an infographic that conveys the data in a digestible format. In our research, one Pathfinder said that identifying the emotion that you want to leave people with is as important as the ‘cold’ logic of the data. In short, what story do you want to tell?
4. Who will execute?
In our research, several Pathfinders described having a separate team of people devoted to executing projects shaped by the data insights. These people, in all cases, were not the same people as those doing the analytics and, often, they weren’t the HR business partner involved in defining the original questions. These were internal consultants, skilled in getting things done through policy, practice or organisation change.
5. How will we know?
The final part of the value chain involves measuring the impact of actions. This is essential for telling decision makers whether what they intended to happen has borne fruit – or, if it hasn’t, then why not? The bank with the question about the mix of branch staff, for example, set about measuring improvements in product sales, customer net promoter score and compliance as the mix of staff was adjusted. These were the outcome measures that helped indicate the optimal mix. To achieve the optimal mix required action in areas such as recruitment policy, initial training, continuous learning and ongoing branch management.
Think outside-in to drive to value
What was clear from all the Pathfinders in our research is that there is discipline, structure and purpose about running the value chain. But perhaps the biggest lesson of all from the Pathfinders is to think outside-in and treat workforce analytics as part of a process that seeks to answer the big questions and drive to value. This is about much more than the production of colourful charts and dashboards.
