This was the fourth CAHRS working group on the topic. The group’s conversation revolved around four key themes:

1. Questions addressed through analytics; 2. Challenges involved with analytics; 3. Data governance issues; and 4. Building HR analytics capabilities

For a summary of the first working group hosted in New York by American Express please see the HR Analytics/Metrics Center of Excellence on the new CAHRS website.

Opening Comments

On September 17, 2012, John Hausknecht, HRS

Professor and Steve Miranda, CAHRS Managing

Director, facilitated a day-long discussion on the

topic of HR Analytics. McDonald’s hosted the

group in Oak Brook, IL which was attended by 16

executives from 12 CAHRS partner organizations

including , Merck & Company, Pfizer, IBM, Corn-

ing, Lockheed Martin Aeronautics, Cigna, McDon-

ald’s, Aetna, Coca-Cola Refreshments, Boehringer

Ingelheim, General Mills, Procter & Gamble,

Terex and one guest company.

CAHRS Working Group—HR Analytics

September 17, 2012— Oak Brook, IL

Working group participants are using analytics to address a variety of workforce issues. These included:

Workforce planning: Forecasting retirements and assessing talent needs and supply. For example, several companies are using historical data to understand how retirement trends have evolved over time. Such analysis displaced pre-viously-held hunches about who retires when.

Predicting attrition: Developing analytical models to identify turnover risk for different segments of the organization.

Drawing from disparate data sources (HRIS, engagement data, etc.), companies are fine-tuning their ability to pre-dict when and why key talent leaves.

Improving selection decision making: Gathering data to validate assessment process and understand candidate reac-

tions to the hiring process. Recognizing that getting the right “fit” matters for performance, retention, and so forth, a number of companies take a very careful and rigorous approach to how they screen and select.

Monitoring engagement: Tracking engagement data over time as an indicator of overall workforce health. Nearly every

organization conducted an annual engagement survey (and some conducted “pulse” surveys on a more frequent basis). Such information serves as a valuable reference point for understanding employee commitment and inten-tion to stay.

Questions Addressed Through Analytics

Page 2 CAHRS Working Group—HR Analytics

Although many companies noted substantial progress in this area over the past five years, significant obstacles remain for many organizations. These included:

Data quality issues: A variety of data quality issues surfaced through the discussion: these included frustrations around data that were described as “inaccurate,” “stale,” “incomplete,” “unreliable,” and/or “irrelevant;” it is safe to conclude that data quality remains a primary hur-dle that needs to be overcome for HR analytics efforts to succeed.

Over-surveying: Several participants were concerned that the organizational surveys were overused

and not always the best method for data collection; when possible, they looked to complement survey data with information from other systems and/or sources.

Educating others: Another key challenge related to difficulties in getting others to accept and/or

understand analytics-based findings. Lack of training and understanding could undermine deci-sions that are in fact based on credible analysis – to overcome this, companies took steps to involve peers in project design and provided in-house training on proper data interpretation.

Balancing strategic vs. operational: There appeared to be two “worlds” of analytics; that is, projects

were viewed as either (a) strategic: long-term, often customized and enterprise-wide analyses that led to “big” decisions about talent vs. (2) operational: short-term, day-to-day decisions that were informed by data found in routinely-produced reports. While both were seen as valuable, operational reporting was seen as “getting in the way” of more strategic uses of analytics.

Another critical theme related to issues surrounding data governance (i.e., explicit rules, rights, and ac-countabilities for HR-related information). Among the observations were:

Some companies had clear definitions of variables and had individuals who were accounta-ble for maintaining and revising rules and procedures related to data variable definitions;

Others commented that different parts of the organization hold different definitions of key variables (e.g., what is an “employee”) – leading to disagreement and confusion when pre-senting results;

Global organizations faced additional challenges related to data governance – e.g., related to data sharing; these companies involved members from legal when discussing how data would be collected and used.

Data Governance Issues

Challenges Involved with Analytics

Page 3 CAHRS Working Group—HR Analytics

As organizations move forward, many have been (or will be) taking a close look at how best to build ana-lytics capabilities inside of their organizations. Some of the approaches taken included:

Assembling analytics teams with diverse (and mostly non-HR) functional backgrounds: Many com-mented that analytics work requires diverse and often non-overlapping skill sets. Analytics requires both consultative and quantitative skills as well as deep understanding of talent/HR and business issues. Few companies find a single individual who possesses strong competency in all of these are-as, so they assemble teams from diverse backgrounds (statistics, HR, finance, accounting, con-sulting) to conduct analytics work.

Centralized analytics work: Although several organizations have pockets of analytics expertise distribut-

ed throughout the organization, many have (or will) centralize these capabilities. This included hir-ing specifically for HR analytics (vs. as needed use of analytics talent), formalizing the group’s scope and purpose, and, in some cases, establishing an analytics group that is separate from reporting.

Developing an analytics “mindset” throughout the organization. Many organizations aspire to instill a

data-driven mindset beyond the analytics team so that managers and HR generalists begin to see analytics as a routine source of valuable information for decision making. Formal training and new systems (reports, dashboards, etc.) that enable “self-serve” use of data were mentioned as a means to this end.

Despite the challenges, many respondents were optimistic about the value and potential of HR analytics in improving decisions that positively influence the organization and its people. When asked about “what this area needs going forward”, respondents noted the following observations:

A continued need to move from reporting to analytics to insights; become less historical and report-driven and more future-focused.

More effective approaches to identifying workforce needs – how do we know what skills we will need and when? What does the future workplace look like and how do we ensure that we are prepared?

Simpler, yet more sophisticated systems for doing analytics – better data integration and con-solidation so that more time can be spent on analytics rather than data management

Better scenario planning – using analytics to answer “what if” questions

Greater linkages across disparate data sources – e.g., matching data from HR, operations, and finance to understand how talent affects key business outcomes

Building Analytics Capabilities

Summary

Page 4 CAHRS Working Group—HR Analytics

The Center for Advanced Human Resource Studies (CAHRS) is an international center serving corpo-rate human resources leaders and their companies by providing critical tools for building and leading high performing HR organizations. CAHRS’ mission is to bring together partners and the ILR School’s world-renowned HR Studies faculty to investigate, translate and apply the latest HR research into practice excellence.