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By Tracey Smith, Numerical Insights.


Using analytics to drive strategy and find value.

As time has passed, most departments have become data-driven in their decision-making. When we think of areas like finance and operations, we can easily visualize those being highly numbers-based, but we don’t often think that way about HR. Well, the HR world has been changing.

HR has been moving away from gut-based decisions and has begun to use data analysis for more effective decision-making. Contributing to this evolution is the renewed focus of software vendors to enhance storage and integration of HR data. Systems integrating employee information, job competencies, performance and succession planning are now available.

HR is one of the last departments to fully leverage its data, and a shift in the skillsets of HR professionals can be seen. Small analytical teams are appearing in the HR function and analytical consultants have appeared on the market to assist companies in evolving the industry.

Why has this become increasingly important? HR is under pressure to become leaner and more strategic. Recent literature in the field has been concentrated on proving the value of HR to the bottom line. HR leaders are being asked to prove the value of new programs before they are allocated additional funds.

Two of the hottest topics involving data analysis are HR analytics and strategic workforce planning. HR analytics use data to evaluate information. The possibilities are limited only by the data you do or do not have. How can HR show value with analytics?


Here are just a few examples:
• Determine whether HR metrics impact operational performance
• Calculate the value of your annual feedback survey and its link to internal HR programs
• Determine the impact of HR programs on their intended result. Use the result to prioritize HR resources and budget allocations.
• Assess the strength of the relationship between turnover and engagement. The result can be used to know how much return to expect on programs used to enhance engagement.


The second hot topic is strategic workforce planning. In a nutshell, workforce planning aims to mitigate the risk to successful strategy execution by ensuring you have the right talent for the future. At a high level, the main steps are to begin by finding the roles that matter most to your company's success.


Then, assess what your workforce looks like today and what you need tomorrow. Finally, determine what actions are needed to close the gap between what you have and what you will need.

The value of analytics and workforce planning to HR is substantial, but most teams are at the infancy of using these tools. If this is the situation in your organization, it is best to find an external expert to guide you through the possibilities.

Recommended additional resource guides:
HR Analytics: The What, Why and How – This book is suited for the HR leader who needs to implement HR analytics or for the use of the HR analyst.
Strategic Workforce Planning: Guidance & Backup Plans – This reference is a detailed guide for those needing to learn the benefits of strategic workforce planning.
Data Driven Decision Making for Small Businesses – This book is for the business leader who is interested in how to make basic data-driven decisions throughout multiple functional areas.

Tracey Smith, B.Math, M.Sc, MBA, president of Numerical Insights, is an independent consultant experienced and specializing in using data analytics to make strategic decisions.

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