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5 Steps to Building a People Analytics function from the Ground Up

While topics such as People Analytics are taking the world by storm, South African companies are only taking notice of its amazing power now.  Almost every HR Expo, Seminar and Conference have at least one speaker talking about People Analytics – often painting an amazing picture of its capabilities and what international trends represent.

The challenge is that the vast majority of South African companies are not even close to implementing predictive and prescriptive People Analytics.  In fact, most companies have not even started on the People Analytics journey.  This is not surprise, since a study by Deloitte found that on an international level only 14% of companies are using advanced analytics in HR.  I venture a guess that this number is even lower in South Africa.

For this reason, I spend most of my time heling clients build a People Analytics function from the ground up.  For them, Artificial Intelligence and advanced algorithms are just a bridge too far.  They need data now.  In this article, I provide 5 steps that will assist CHRO’s to build a People Analytics function from scratch.

Step 1:  Discovery – Identify where People Analytics can make an Impact in the Business

The whole value of the HR function is to enable success in the organisation.  Just like Finance enable success through diligent management of money in the business and IT drive productivity through the right hardware, network & software solutions, HR’s role in the business is to ensure the People in the business contribute towards company goals.  Therefore, the first step in building a People Analytics function from the ground up is to understand priority organizational strategies and goals. People Analytics should support the business strategy by measuring what the business deems important.  Identify which People behaviours are aligned with strategies and goals.

Step 2:  Examination – Selecting appropriate People Metrics

Once you have identified where People Analytics will make the biggest business impact, we need to determine which metrics we are going to use to measure this impact.  This is the heart of the process.  At this stage, it is important to distinguish between HR Metrics and People Metrics.  HR Metrics measures the Effectiveness & Efficiency of the HR function.  Very often, this is totally separate from the business and have no relevance outside of the HR Department.  People Metrics measure the Effectiveness & Efficiency of the people in the business.  This is where people behaviour shows a direct link to company performance.  Your C-Level will only be interested in People Analytics.

Step 3:  Data Mining – Obtaining Relevant Data

Practically, the 3rd step is the most challenging.  This is because the data you need for People Analytics are warehoused in several systems.  To maximise this step, HR Professionals need to understand the difference between Structured Data (information with a high degree of order) and Unstructured Data (the opposite of structure/order). Since the diversity among unstructured data sources is so prevalent, businesses have much more trouble managing it than they do with structured data.

To extract the relevant data, the following steps needs to be followed:

1.       Identify the sources of the relevant data:
       a.       E.g. Internet (Social Media, Websites, etc.), ERP Systems, Surveys, etc
2.       Identify the type of Data
       a.       Structured/Unstructured,
       b.       text/voice/image, GPS, video,etc.
3.       Harvest/Gather the Data
       a.       You will probably have to build a few Advanced Programming Interfaces (API’s)
       b.       Automate as much of this process as possible
4.       Normalize the Data
       a.       All the data needs to be placed in a framework (Database)
5.       Enrich Data
       a.       Adding of metadata (e.g. tagging)

 

 

 

 

 

 

 

 

 

 

 

Step 4:  Assessment – Draw Insight from the Data

Once we start receiving information through HR Analytics, we need to start making sense of everything.  It is never enough to just take the data face value.  HR needs to interpret the data for the C-Level to clearly link the impact of People Behaviour on the Bottom-line.  We always propose look at the following when interpreting data for the C-Levl:

  • Provide Context – Current environment, Industry Benchmarks
  • Compare to Past Performance – Progress/Regression
  • Provide understanding – Ask ‘Why?’
  • Predict future outcomes

 

 

 

Step 5:  Influence – Communicate People Analytics to Drive Strategic Change

The last step is often neglected.  Positive, sustainable growth can only be achieved when HR is able to convince and influence the business and this is done by clearly communicating the success stories to the business.  When communicating to the business, take the following into consideration:

  • What should we communicate?
  •      Structure message in a business-friendly story
  • To whom must we communicate?
  •      Identify all the stakeholders
  • When should we communicate?
  •      Weekly/Monthly/Quarterly Reporting
  •      Business Cycle (budgeting, Legislative Reports)
  • How should we communicate?
  •      Reports, Newsletters, Posters, Meetings, Emails, WhatsApp

By following these 5 steps, any organization -regardless of size and sophistication – can build a People Analytics function from the ground up.

Elmen Lamprecht is the Co-Founder of two HR Tech companies:  COGO People Analytics, specializing in People Analytics including Artificial Intelligence and 3 Degrees Tech, specialist in Virtual Reality and Augmented Reality.

 

 

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