McLean & Company 1

McLean & Company is a research and advisory firm that provides practical solutionsto human resources challenges with executable research, tools, and advice that will have a

clear and measurable impact on your business. © 1997-2014 McLean & Company.McLean & Company is a division of Info-Tech Research Group Inc.

Drive Business Success with HR AnalyticsReap the rewards of HR metrics through a combination of HR analytics and persuasive storytelling.

McLean & Company is a research and advisory firm providing practical solutions to human resources challenges via executable research, tools and advice that have a clear and measurable impact on your business. © 1997 - 2014 McLean & Company. McLean & Company is a division of Info-Tech Research Group.

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This Research is Designed For: This Research Will Help You:

This Research Will Assist: This Research Will Help You:

This Research Is Designed For: This Research Will Help You:

This Research Will Also Assist: This Research Will Help Them:

Our Understanding of the Problem

Heads of HR who have been tasked with selecting and/or communicating strategic metrics.

Heads of HR who have been tasked with measuring progress toward strategic goals.

Select metrics that are aligned with strategic goals.

Effectively track and analyze strategic metrics.

Analyze and display strategic metrics using a dashboard to draw meaningful insights and conclusions.

Effectively design a compelling, clear, action-oriented story to communicate to organizational stakeholders.

HR and business professionals who want to effectively communicate metrics information to organizational stakeholders.

Analyze and display metrics using a dashboard to draw meaningful insights and conclusions.

Effectively design a compelling, clear, action-oriented story to communicate to organizational stakeholders.

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Resolution

Situation !

Complication ?

McLean & Co. Insight

Move from reporting on metrics to driving tangible business outcomes with strategically-aligned analytics

• Most HR departments have metrics in place, but few are considering strategic goals and developing a true analytics capability. This is particularly problematic in an era where analytics and “big data” are so commonly discussed and sought out.

• Communication revolving around metrics often relays isolated numbers and trends, but seldom provides the insight that will help the business with interpretation or planning. This is problematic in a business world where analytics are high priority.

• A stereotype exists in both the business and within HR that HR is not analytical and as such does not have the capabilities required to interpret metrics information.

• Cooperation is critical. HR must consult with business division leaders when creating insights to ensure that they provide recommendations based on a holistic understanding, rather than the skewed perception of an isolated metric.

• Operational metrics are useful in many areas, but they do not track your progress toward a strategic goal. Strategic metrics should be employed to tell the organization how well HR is doing with respect to strategic goals – the 12-24 month action items that support long-range strategic objectives (>2 years).

• Metrics communication must provide insight into the causes of trending and the implications for planning – it can’t just be a relay of numbers or trending from reports. This is an opportunity for HR to demonstrate the depth of their analysis and business acumen.

Persuasive communication is often the difference between a successful HR analytics program and an unsuccessful one.

To drive success, present a compelling business-oriented story that uses insights drawn from data analysis to provide actionable recommendations.

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Best-Practice Toolkit

1. Establish project rationale.

2. Align HR goals with strategic organizational objectives.

3. Select relevant, supportive metrics.

4. Develop a dashboard to track and display critical, relevant metrics in a visually appealing manner.

5. Analyze metrics to draw insights and create targeted recommendations.

6. Craft a compelling, persuasive story to share insights and recommendations.

Guided Implementations

Develop an audience-targeted business case and identify business goals with which to align HR goals.

Select groupings of relevant metrics for each aligned HR goal.

Consider multiple options for data tracking, collection, and display.

Discuss data, potential analysis techniques, and possible resulting insights.

Craft a persuasive story based on data-driven insights.

Onsite Workshop

Module 1:

Establish and communicate HR goals and objectives, as well as related metrics.

Module 2:

Develop procedures to effectively analyze and display data-driven insights.

Phase 1 Outcome:

• Completed business challenges / goals assessment.

• Developed HR strategic goals aligned with business goals.

• Selected and paired relevant metrics to aligned HR goals.

Phase 2 Outcome:

• Selected dashboard production techniques.

• Increased experience and comfort with analysis and insight-creation techniques.

• Develop effective communication with the executive team and the board, if applicable.

Align strategic goals and select metrics

Track, analyze, and take action

Drive Business Success with HR Analytics – Project Overview

Phase 2Phase 1

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Before continuing, familiarize yourself with the difference between metrics and analytics

Data analytics investigates a

problem from all perspectives. Multiple metrics are reviewed

in conjunction, looking for trends, patterns,

and relationships and resulting in insights.

Data analysis occurs when a metric refers to a discrete activity.

It investigates a specific issue, but

does not review the problem in its

entirety.

Metrics are individual pieces of data which indicate an outcome. In isolation, they are

meaningless. To accurately interpret

metrics, it is critical to understand situational

context.

Metrics Data Analysis

Data Analytics

This blueprint will help you move from reporting metrics to using analytics to develop insights and recommendations.

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This McLean & Company Blueprint will help you move to HR Analytics in four steps

Step 1: Establish Project RationaleDevelop a business case for strategic HR metrics.

Step 2: Align & Select MetricsIdentify common business challenges and design HR goals and subsequent metrics which address these organizational issues.

Step 3: Harvest & Display Metric DataCreate tracking and metric presentation procedures to efficiently organize data.

Step 4: Analyze & Take ActionDevelop insight producing analysis techniques and communicate conclusions.

Establish Project

Rationale

Align & Select Metrics

Harvest & Display Metric Data

Analyze & Take

Action

1

2

3

4

We will be starting with the Project Rationale on the next slide.

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Track, Analyze, and Take Action

Phase 2

Make the Case and Select Metrics

Phase 1

Phase 1: Make the Case and Select Metrics

• Establish Project Rationale

• Align & Select Metrics

Steps:

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Improving HR´s stakeholder management

Using predictive talent analytics

Including functional competencies

Fostering a culture of innovation

Proving the HR value proposition

Strategically addressing looming skills gaps

Strategic workforce planning

Developing the next generation of leaders

34%

28%

31%

41%

38%

37%

36%

45%

19%

25%

25%

15%

19%

30%

33%

25%

HR analytics is a key focus for 2015– two of the top 15 emerging trends require the use of analytics

Currently implementing

Planning to implement within two years

* “HR Benchmarking & Analytics” falls under the “HR Strategy” category in the Trends & Priorities survey.

2nd

3rd

9th

10th

11th

13th

15th

1st

Two of the top 15 trends

require HR analytics.

McLean & Company’s 2015 HR Trends & Priorities survey identified eight emerging trends in the HR Strategy* category:

Emerging trend ranking( out of 45 trends)

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More specifically within HR Strategy, “HR Benchmarking & Analytics” was also ranked the least effective area.

• HR Benchmarking & Analytics was rated as only 21% effective – meaning 79% of respondents report it is ineffective or only moderately effective.

• This is well below the average effectiveness rating of 30% in the HR Strategy category and the overall average effectiveness rating of 36%.

Evidently there is a lot of room for improvement.

However, many organizations struggle with HR Benchmarking & Analytics – it was rated the least effective

Man

aging

org

aniza

tiona

l cult

ure

HR stra

tegic

plan

ning

Org

aniza

tiona

l des

ign

Chang

e m

anag

emen

t

HR ben

chm

arkin

g & a

nalyt

ics

0%

5%

10%

15%

20%

25%

30%

35%

40%

38%33%

30%27%

21%

Areas within HR Strategy

Eff

ec

tiv

en

es

s

Source: McLean & Company Trends & Priorities Survey 2015

“HR Benchmarking & Analytics” tied for least effective across all 31 HR areas on the McLean & Company Trends & Priorities Survey for 2015.

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Become more effective at delivering analysis-based insights to enhance HR’s credibility with the business

Until HR can clearly

demonstrate its worth, it will

continue to be seen as a cost

center. One way it can do this is by not only tracking metrics, but by acting on the issues they

uncover.

- Connie Karlsson, HR Evaluation &

Metrics Strategist

Information is collected and stored.

Information is collected, stored, and analyzed.

Information is collected, stored, analyzed, and acted

upon.

0%

10%

20%

30%

40%

50%

60%

14%

19%

50%

HR

’s C

redi

bili

ty A

mon

g B

usin

ess

Lea

ders

Source: McLean & Company, N = 98

The lesson:Don’t waste time

collecting data if you don’t plan to analyze

and act on the results.

HR’s credibility with business leaders is low – only 14% –

if their interaction with

quantitative information

involves only thecollection

and storage of data.

HR’s credibility with business leaders jumps only slightly – to 19% – if

they go one step further and

occasionally analyze

the information collected.

HR’s credibility increases 163%

if they act upon the information

they have collected and

analyzed.

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No metrics

Operational metrics

Strategic metrics

0 100 200 300 400 500 600 700 800 900 1000

ROI

Focus on strategic metrics to improve your analytics program’s return for the business

*Source: Nucleus Research, “ROI of Business Analytics Increases Significantly as Solution Matures”

100x

x

1000x

HR strategic metrics support business goals by:

• Impacting strategic decision-making with timely insights.

• Speeding response time to issues which affect performance toward strategic goals.

What are strategic metrics?

• Strategic metrics are forward looking and are selected to support organizational goals.

• They do not measure operational activities, but instead track progress toward a specific business goal.

Why do they have such a powerful business impact?

Recent research reported that companies can multiply their ROI by 100x through the use of operational metrics.*

This same research reported that companies can multiply their ROI by 1000x through the use of strategic metrics.*

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McLean & Company Helps HR Professionals To:

hr.mcleanco.com

Empower management to apply HR best practices

Develop effective talent acquisition & retention strategies

Build a high performanceculture

Maintain a progressive set of HR policies & procedures

Demonstrate the business impact of HR

Stay abreast of HR trends& technologies

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•"McLean & Company provides practical research, tools and advice covering the entire spectrum of HR & Leadership

issues to ensure you experience measurable, positive results."

- Rob Garmaise, VP of Customer Experience

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