People Analytics: The Future of People Driven Business Growth.

Peter Sondergaard has said, “Information is the oil of the 21st century, and analytics is the combustion engine” And closer home Mukesh Ambani, Chairman of Reliance Industries, has said that “Data is the new oil.”

To make the most of People, many organisations are leveraging People Analytics to gain a deeper understanding of HR programs and initiatives that impact Business and in aiding People decisions for Business.

However, many studies have shown that the C-suite’s faith in HR’s Analytical ability is not very high.

What’s the issue?

 

HR is seen as very tactical and engaged in transaction activities.

It is seen to be operating more at the lower end of the value chain. They are not seen as Strategic and also don’t speak the Business language.

They cannot link their HR programs and activities to Business Outcomes and quantify the value add to Business either Top line or bottom line.

“HR has not yet reached the level where it can consistently and quantitatively demonstrate linkage to value creation, causing many CEOs and CFOs to view HR skeptically as simply a necessary expense.” Source: SHRM – Human Capital Analytics and Metrics

HR generates a lot of data, but many cannot decipher the noise and make meaning out of it.

They need to first understand the Big Picture, know where is the Business heading towards, understand the Business KPI’s and identify the Drivers of Business. They should then identify HR programs & initiatives that will help influence the Drivers of Business.

Successful HR Leaders can map & link HR Metrics to Business Outcomes and adopt a top-down approach.

 

Here is an example:

HR very often falls into the trap of “me too” and tries to imitate other organizations in the garb of “HR Best Practices”.

While it is essential to understand what’s happening around in the market, one must remember that each organization is unique, and each business is unique. Hence a ‘one size fits all strategy will not work. That is why we find that what works well in Google may not work well in some other organization.

 

HR must understand “what we do, why we do?”. For every action of HR, there must be a “why?”. The “why” is the linkage to Business Strategy and how it will influence Business Outcomes.

 

Only then will HR’s credibility rise high and gain the trust of the CXO’s and Business Leaders.