A Three-Part Series — Part One
A successful HR data practice addresses the needs of the business by providing a rigorous process for managing a body of data that begins as nebulous, unstructured, and not consumable. It does so through a cycle of reporting, analytics, and planning.
In this entry we will discuss the first of these, reporting, which is concerned with providing a fundamental information structure to describe what is happening in the workforce. From a sound reporting basis, businesses can analyze their data, develop insights, and ask iteratively why are these trends occurring? As managers and analysts converge on a set of accounts that provide the best answers, they can address how to take action today, so as to have the greatest impact on the business in the future.
Will the human capital value chain be unbroken?
The human capital value chain begins and ends with reporting, which unfortunately also mirrors a familiar cycle of pain within the HR function. HR reporting is often criticized for a preoccupation with describing its own efficiency and effectiveness rather than a broader sort that HR should be driving throughout the entire organization.
One of the reasons for such a shortcoming in reporting is an inability for HR to provide timely and high quality information beyond the HR function. Although HR has been catching up rapidly with other business functions regarding automation and process control, HR reporting often still lacks credible and timely data to support major business decisions. The lack of timeliness is partially due to a habit of reporting that includes long cycle times and tedious data collection. Yet even with the most recent cloud-based technologies, data latency remains a major problem. Combined with HR information systems that are often scattered, a single version of the truth is often unavailable to the managers who need it most. The result is that HR information is not viewed as actionable, or in terms of analytics, not relevant. Such inert knowledge initiates a vicious cycle in which HR data is judged unusable, and so decisions are made by gut feel, resulting in fewer future resources devoted to collecting data for similar kinds of reports.
HR information systems can address such reporting difficulties by including in their designs flexible ad-hoc reporting and embedded intelligence capabilities in context. Companies that successfully do this find that their analytics inquiries achieve greater relevance, addressing the salience of “what the boss is looking at” more readily.
Other companies find combining standard reports and dashboards useful. Such a reporting environment increases in usability when it includes end user configurability to modify and create new reports. Similarly, full data accessibility, including custom fields and configuration (e.g., labels, pick-lists, custom objects) allows organizations to target their reporting needs by more granular analyses. For businesses that are already experiencing significant transformations through analytics, advanced and flexible data schemas optimized for real-time and performance queries provide the means to execute fully on those transformations.
Yet there are still many HR departments that feel like they are on the outside looking in regarding analytics. They have heard of alleged huge successes of other businesses taking their big data to the mat, and using analytics to learn new tricks long in advance of the competition. In the next entry, we will address the challenges many companies face in performing the kind of analytics that can transform businesses, and suggest ways to turn both reporting and analytics into assets to help drive competitive advantage through human capital.