Unless you’re already using HR analytics tools to inform your decision making, it’s likely you’re sitting on a wealth of currently untapped resources. Back in 2013, the Harvard Business Review advised business leaders to use HR analytics to change their organizations, by using “big data” to shed light on key business drivers including performance among peers, correlating results to learning programs, assessing the learning curve for new employees, and obtaining a better understanding of successful leaders.
When put that way, HR analytics seems like a no-brainer, right?
Yet many organizations may resist the investment in HR analytics, even with a skyrocketing need to better understand the people who drive your business. The Association for Talent Development calls this understanding a necessity – especially now that a reported 65% of value creation stems from its people, compared to a sparse 9% 35 years ago.
Prepare to overcome potential pitfalls to adopting or increasing HR analytics software by better understanding the top 10 HR analytics barriers.
- Multiple Data Sources. You may even be looking at many, many data sources in HR systems. The typical corporation has an average of 23 different HR systems, according to Lisa Rowen. These span key employee dates, recruiting reviews, employee performance, compensation, experience, and a variety of other items that fall under the HR umbrella. It sounds more than a little daunting to bring all this together, right? But rather than allow this to intimidate your team into adopting a plan to do absolutely nothing, get the most out of your effort by starting with your HRIS system. It’s likely the majority of your data is housed here, so this serves the dual purpose of beginning the practice of HR analytics and getting the most out of your efforts.
- Competing Priorities. HR and HRIS teams, who balance open enrollment, reviews and raises, and new system launches to name just a few, are always busy. And, across each of these areas, teams are very likely juggling several immediate priorities. While these responsibilities are vital to your organization, they’re also focused only on the present. Balance these competing priorities by including a forward-looking perspective with HR analytics, which allows your HR and HRIS teams to not only drive the business in the immediate, but also to set a successful, informed strategy for the future. Although this should be a key priority for your business, hardworking HR and HRIS teams should expect vendors to develop solutions that are easy to implement, use, and interpret to improve their workload.
- Missing Many HR leaders assume they don’t have the information that drives key HR analytics metrics. In fact, when shown the underlying data that produces the metric formulas, most HR leaders find them to be very standard – and very available. Don’t assume a slick chart came from data you don’t collect. In fact, assume the opposite: you have the data you need. You just need to know how to look at it.
- Only Looking Inward. To truly understand how your organization performs, your organizational leadership will need to take step back, and not only consider the internal success rate, but also pit key metrics against industry standards. How else will leaders understand if the business is doing well, is offering competitive packages, and is generally stacking up to competitors? A quality HR analytics system provides not only organizational-level data, but also offers industry insight.
- Missing Workforce History. What if you just launched your company’s first HRIS system last year? Of course, more data means better analytics and predictions, but some history is better than no history; some analytics and predictions are better than none. And, do a little digging before you resign yourself to a small dataset. If you have been paying for another solution, like ADP or a payroll provider, they will likely have some decent historical data you can request.
- Yes, it always comes down to the money. But a cost-first strategy can be an empty, or at least misguided, one. Cost only tells half the story. Value, which also considers how the HR analytics solution will impact the business moving forward, presents a fuller picture. Imagine this: your team opts to bring on the HR analytics solution with the very lowest costs at the instance of your stakeholders. The solution is so convoluted, it takes a full year to implement. This means you’ve seen no positive impact at all. On the other hand, if your team had assessed value over cost, you may have opted for one more moderate in cost. This solution is much better, is implemented in six months, and yields data that generates a strategy to improve retention and engagement (and therefore, cost) in the next six months. While the upfront cost may be more, the end game value may also be exponentially more.
- Desire to “Try Before You Buy.” You wouldn’t purchase a car just by quickly walking the exterior, because you expect more than just a slick paint job. As with any investment, organizations want to try before they buy. HR analytics software test drives can be part of the purchase process as well. For example, understand ROI, and then decide on next steps with your organizational stakeholders. You may find the initial use yields a 100% ROI by itself, which means not only have you gained some benefits during your shopping process, but you’ve also made the decision process effortless.
- U.D. (Fear, Uncertainty, and Doubt). A termed coined by former IBM pioneer Gene Amdahl, this is a method of selling originally ascribed to IBM where sales people create fear for their clients: fear to buy from anyone else. And the kind of fear that keeps a person rooted in place isn’t relegated to tech purchases – it’s the same mentality that impedes innovation, fosters idle employees, and ultimately, stagnates business. Translate the fear of the new to the fear of inaction, and campaign for what may be a bold decision today and a business transformation in the future.
- Perceived Complexity. Anything with the term analytics in it conjures up images of the complex. The mind-numbing, calculator plugging, exhaustive spreadsheet type of complex. But really, does a system have to be complex in order to solve a complex problem? Absolutely not. In fact, is the art of taking complex reporting and telling a story with graphics. Organizational stakeholders are too busy to slog through meaty spreadsheets, and this type of visualization packages the story, so all parties can understand the information and act on it.
- Lack of C-Suite Support. Yet another software purchase may be a very hard sell for the C-Suite, particularly if they see HR software purchases as only a hard cost to the organization. However, C-Suite executives understand numbers. Speak their language by demonstrating how an HR analytics system can increase revenue and decrease cost – and you’ll garner the support of the CEO and the CFO respectively.
Advances in technology and a growing workforce means more HR data overall. But without the right analytics to generate valuable insight, you’ll be left with an empty fact sheet. Overcoming these HR analytics barriers paves the way to better strategy for managing the people who make up your business. And that’s worth breaking down barriers for.
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