A senior HR director at one of the world’s global energy giants recently said to me that there were many bold claims made years ago that people metrics or workforce analytics would revolutionize management. That never happened, so what’s different now?
Well firstly let’s consider what workforce analytics is. A team leader or department head might regularly get sent a set of people metrics showing staff turnover levels, absence and workforce demographics. From time to time, they might also get information on staff attitudes –- job satisfaction, commitment, stress or employee engagement levels. This data might compare their team or department with others in the firm and other firms in the industry.
This does happen in some trail-blazing companies today, such as Google. The information is increasingly being provided with analysis attached. More importantly, it may also be sent with some economics that demonstrate its value to the manager.
For example, this manager might now see the data and understand how the team’s engagement, absence or job satisfaction levels might predict important outcomes such as future staff turnover. Or how these factors might affect team or department productivity and customer service levels. This manager may also now know the business impact of lower engagement or higher stress because someone has run the numbers to show much it costs the business if staff leave, withdraw their effort or behave in counterproductive ways.
People metrics or workforce analytics is still in its infancy but done well, it has the potential to transform the nature of people management. Organizations are now beginning to align the three things that can bring about this change:
- Technology to warehouse and utilize people data effectively
- People that are able to perform a useful workforce metrics role; and
- Management that understands its importance and seeks to use it
Only a short time ago, this combination rarely existed but today it is more widespread and change is happening quickly. For example, we were recently asked to establish a metrics roundtable forum for the financial services industry to help discern and disseminate industry best practice. Well known academics are connecting more effectively with firms to help them build capability in this area and more companies like Google are advertising their prowess in using metrics as a means of attracting and retaining their best people.
So what do firms need to do to use people metrics as an effective management tool?
- Collect data which is accurate, credible and integrated — use one IT system to ensure consistency
- Use data to show the link between people management and behavioral & business outcomes
- Build a robust business case to underpin and make compelling why good people management matters
- Invest in highly capable staff to manage and analyze the data in a value adding way
- Communicate data findings so that management understands the messages and acts on it
