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Executing your HR Analytics Project – In 8 Steps

Technology and Analytics

In this blog we look at an 8-step plan for getting started with an HR Analytics project. Diving into an HR analytics project is an ideal way to showcase the impact analytics can have on your business. And like any project, the best way to tackle it is to first break it down into manageable chunks.

The eight steps

Follow these steps to deliver business value through your analytics and reporting.

  1. Read and understand your business plans
  2. Scope out your HR analytics project
  3. Define your primary metric
  4. Define your secondary and supporting metrics
  5. Articulate the ‘What’
  6. Articulate the ‘Why’ behind the ‘What’
  7. Drive Decisions, Case for Change, Targets and Change Plans
  8. Implement, Measure Success, Stabilize and Realize Value

1) Read and Understand Your Business Plans

First of all, read your most up-to-date business plan or objectives. Sometimes businesses refer to these as OKRs. If you don’t have access to this information, there are other ways to find out. For example, interview members of your executive team? Alternatively, your department leader? They typically understand the overall direction and align efforts accordingly.

People are key to success with any of these things. A data-driven human resources focus better balances qualitative and quantitative data (i.e. gut feel and hard facts). Apply this balanced approach within the context of something relevant, juicy and purposeful for the organization, whether a specific Line of Business (LoB) that you serve, or a larger corporate objective.

Understand the Corporate and Business Unit Plans. Also understand what it means in terms of people programs and capabilities, and identify, scope, and deliver Data-Driven HR analytics projects. This drives achievement to these business plan outcomes.

2) Scope Out Your Chosen HR Analytics Project

Scope out your project with these activities in mind:

  • Read Your Business Plan
  • Read Your Line of Business Unit Plan
  • Discuss and “play-back” your key observations to the management team/LoB to ensure you understand
  • Outline how your first HR analytics project supports key areas of focus.
  • For your first HR analytics project, research, brainstorm and document the following:
    • The specific objectives, outcomes and metrics related to the project
    • The people and organizational requirements/capabilities for delivering on this
    • Your gaps in all aspects of HR & people programs. For example, if you need to “improve close rates in our Sales Team” and you don’t have a best practice Sales Closing Training Course available, then this would be considered a “gap.“
    • The risk, implications and business impacts of not closing that gap
  • Brief your LoB Lead/management team on your findings. This results in deeper understanding, alignment and support for your project. In addition, if you’ve got it right, you pique interest.

This is great! Firstly, you’ve set boundaries around your HR analytcis project. Secondly, you understood it in greater detail. Thirdly, other people in your organization understand and are on board with your project. Now, define the project in more detail. And execute! There are several steps to this, and these steps that dig into the data and metrics you’re going to capture.

3) Define Your Primary Metric

Next, define what we call a Primary Metric. It captures the essence of what your hr analytics project seeks to accomplish. Define the Primary Metric speciifcally and as detailed as possible. After all, this is the foundation for all subsequent steps.

Opt to keep this directional in nature (i.e. decrease or increase) and not get into specific targets for now if you want. This is all good. Set targets in a subsequent stage, after you have access to hard data.

For example:

  • “Decrease Turnover of our Top Performers (Rated Outstanding and Exceptional) in their First Year of Tenure in the Sales Department”

Ensure you define the nuances of your Metric such as… Do you mean First Year in the company, or First Year in Sales? Do you count a top performing employee who spent 3 years in Marketing, then transferred to Sales and then left the company 9 months into their Sales role?

Quantify (state the current facts regarding) your Primary Metric in terms of both rate and magnitude:

  • In 2019 our Top Performer Turnover Rate for those employees in their First Year of Tenure in the Sales Department was 23%
  • In 2019, this represented 17 EEs departing on a total segment of 77 EEs

For comprehensive understanding, consider your Primary Metric from many lenses. This means slicing and dicing your data across the data dimensions available to you. Fortunate to have powerful people analytics or BI tools? Great! That simplifies things considerably. Calculating in a spreadsheet? Well then, that’s more challenging. Prepare to dig in and spend some serious time on this.

4) Define Your Secondary or Supporting Metrics

Secondary or Supporting Metrics offer data dimensions and segmentation that refine analysis. The extent of these Secondary Metrics and segmentation is really up to you. But consider, they yield the most insightful observations and story lines.

For example: segment and slice your data so you can understand if there are any anomalies based on demographics, location, manager, manager’s attendance at a People Manager training course, recruitment channel, onboarding survey results and engagement, among other things.

You’re only limited by the data you have access to and your ability to connect it. Again, if you’re working with a people analytics partner or use a powerful BI tool, then easy. If you don’t and you’re dealing with spreadsheets and disparate systems, roll up your sleeves and tuck in… you’ll need time and some analytics expertise on your side.

5) Make Quantitative Observations – Articulate “The What”

Continue segmenting and analyzing your data with Secondary Metrics. Make observations focused on anomalies. In other words, outliers, hot spots exceeding acceptable thresholds, or where the sheer mass/magnitude of an issue represents an opportunity. These are critical pieces of your HR analytics project.

6) Articulate “The Why Behind The What”

At this point, you’ve got a collection of facts compiled about Top Performer Turnover in Sales, for employees in their First Year of Tenure.

Armed with this analysis, dig deeper into the story lines. Understand the context in which they occurred. And ask “why” to those best positioned to offer logical reasons and hypotheses. You’ve now got qualitative understanding.

How? Through a variety of techniques. For example, run some focus groups with other Top Performers in Sales. Talk to those in their second year of tenure, they’re equipped to shed some light on the experience. Include data from your Onboarding Experience Survey. Or host small group conference calls, 1 on 1’s or water cooler/off the record conversations with Managers, etc. Whatever the approach, focus on the lived experiences of those involved. This brings the numbers to life and provides context.

The objective here is to dig deep so you can balance your facts with context. And subsequently, tell the story in a more complete fashion, with as much texture as possible.

7) Drive Decisions, Case for Change, Targets and Change Plans

The point of your HR analytics project is to understand, drive a decision, and implement change. Therefore, decision making must be done in collaboration, consultation and with the support of your LoB client. Engage with your LoB clients throughout the prior steps. And share access to the facts, context and opinion.

Decision making for the Line of Business is all about Return on Investment (ROI). This requires the development of a Case for Change. Some might call this a Pitch Deck, others a Business Case. Regardless, the Case for Change is a 10-15 slide summary and recommendation that often includes the following:

  • Executive Summary
  • Background and Context
  • Current Environment/Issue Identification (Facts and Context)
  • The Opportunity
  • Proposed Solution(s) and Targeted Outcomes
  • Costs and Benefits (ROI)
  • Project/Implementation Approach
  • Resources Required
  • Recommendation
  • Next Steps

The goal is to convince your stakeholders and impacted partners that change is needed and helps them accomplish their goals.

8) Implement Change Plans, Stabilize, Measure Success and Realize Value

Remarkably, “Business Case Realization” is incredibly easy to ignore. Moreover, it is common to move onto the next activity before capturing results, and metaphorically “banked the winnings. ” Avoid this pitfall at all costs:

  • You’ve been trusted to invest in data-driven HR is to chase juicy business outcomes.
    You’ve sold this initiative on a business case. Spend some time quantifying and counting your accomplishments and success – and sharing that with those that matter.
  • Simply determine the ROI of your initiative
  • On one side of the ROI equation you will articulate the “New Value” you have created through this initiative.
  • On the other side of the equation, articulate the Cost of the initiative (days effort in working this project can be converted to a daily internal loaded cost rate). You will use this as your denominator.
  • Subtract the Cost from the New Value and call the result your “Net New Value” – use this as your numerator.
  • Divide the Net New Value by Cost and multiply by 100.
  • You now have your Return on Investment for this data-driven HR project.

A Real-World Example

Given that this is a largely untapped area, the benefits are significant. Consider this example from a technology client of ours at HireRoad:

  • The turnover of one specific Key Technical Role decreased by 25% in the first year after implementing analytics tools which gave managers deep visibility into their turnover. As a result, they could segment on-the-fly.
  • The VPHR directly attributed the impacts to having increased visibility.
  • This resulted in a cost avoidance of approximately $750k for this year.
  • The cost of investment was less than $25k.
  • The Net New Value is $750k-$25k = $725k
  • The ROI of this investment in data-driven HR was: ($725k divided by $25k) x 100 = 2,900%
  • Yes, 2,900%

Conclusion

In conclusion, once you’ve realized the value, you must communicate it and celebrate it. Then learn from it and build on it. Keep the momentum up with your next HR Analytics project. Want to see how we can help?