Secrets of Human-Capital Management 【April 2017】

By David Creelman

 

My clients often start a discussion by describing their vision of advanced analytics. However, the discussion usually veers to today’s reality of getting basic HR reporting right. This topic has been around long enough that’s there’s no excuse for it still being a problem in your organization.  Let’s fix it once and for all.

 

The current state

Many organizations have reached a point where they have the essentials pretty much in place. They can report on headcount, turnover, salaries and so on. If you don’t have the essentials, then you need to work on that; luckily the path to getting there is pretty clear, it just takes time and an investment in decent technology and processes.

As soon as you go beyond the bare essentials, companies get into trouble. They get busy as heck producing loads of reports, but those reports have little value.  HR reporting doesn’t come cheaply and if the HR organization is devoting a big hunk of budget to something that has little value then that’s got to be addressed.

Why reporting (beyond the essentials) often has little value

There is a certain fascination with numbers that leads managers to want lots of them. Unfortunately, most managers have never had training in being “data savvy” and so they make a lot of poorly thought out requests that are expensive to fulfil, but don’t add value.

Here are the kinds of problems you’ll have to confront:

• ・Idle curiosity: A manager notices there are a lot of artistic people in the company and wonders how many employees have Fine Art degrees.  Why? Well, they were just curious.
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• ・Presentation madness: A manager wants to impress their boss and they decide the way to do that is to fill their presentation full of numbers.  Where do they get numbers? They ask the HR reporting team to crank out loads of data so they can cherry pick a few choice numbers.
• ・Lack of clarity on what they really need: A Board member has heard that engagement is important and so asks for a report for engagement broken down by function, level and region. The resulting 500-page report doesn’t help them get to the heart of a business issue so the repots gets put aside.

 

People have reasons for wanting HR reports, but often those are not sufficiently well articulated to be good reasons.

 

How to solve the problem once and for all

HR reporting cannot simply be a service function that fulfils whatever requests for data they get.  They need to be a decision support function that asks questions, provides advice, and says no to low value requests.

 

This shift requires three things:

• ・You have to change the HR reporting team’s mandate and communicate it to managers.
• ・You have to build processes that help them ask appropriate questions, prioritize requests, and make it possible to say no.
• ・You have to train them to be data savvy so that they can provide helpful advice to managers

The company as a whole may also need training:

• ・All managers should have some training in being “analytics savvy” and having good data judgment.  Most managers have a decent sense of this, but you should give them a framework so they can be crisper in their thinking and avoid some of the common traps (such as Presentation Madness).
• ・Senior executives need to enforce a culture of wise use of data and analytics, not just a blanket endorsement of it. If a manager is making a presentation where the numbers are irrelevant the leadership should ask “How much did it cost the organization to get those irrelevant numbers?” If the manager has cherry picked data to support their case then leadership should chide them for presenting misleading facts. If we are serious about making decision based on data; we won’t put up with window dressing.

What’s the underlying key to being data savvy?

The underlying key is that data and analytics must always serve a purpose. We must start with defining the question that needs to be answered. In a properly run HR reporting function the question of “So what?” never arises.  The question “What metrics should we report?” should never arise either. Getting clarity about purpose is hard work, but it will transform HR reporting into a value adding activity.

 

HR reporting is a fixable problem that we’ve been living with far too long.  Prove you’ve sorted this one out and you’ve got a real example of how HR can drive business results.

 

 

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