Over the past two decades, interest in showing the value for human capital investments has grown ten-fold. Today, not only do human capital practitioners of leading edge organizations employ measurement and evaluation practices, including the use of ROI, to describe the payoff of these investments; but with laser focus, they are also looking into ways they can further participate in the “big data” phenomenon.
To do so, human capital professionals must develop a human capital analytics practice that ensures they ask the right questions at the outset, develop data to help answer those questions, and use the information to influence decisions that drive strategy. Yet, many of today’s human capital professionals are working with inconsistent and, often, indecipherable information, limiting their ability to contribute to organization intelligence. Even more disconcerting, many human capital professionals do not have the skill set to make meaning of the data at hand. Without good data or the capacity to make meaning from the data, the human capital practice will continue to support strategy, rather than drive strategy.
So, how does an organization develop a human capital analytics practice that contributes to organization intelligence? In November 2011, The Conference Board launched a research working group (RWG) to study the application of human capital analytics in multinational corporations. Led by Rebecca Ray, Ph.D., Senior Vice President of Human Capital, The Conference Board, Jac Fitz-enz, Founder of Saratoga Institute and Human Capital Source, and me, Patti Phillips, Ph.D., Co-founder, President, and CEO of the ROI Institute, this group set out to understand the current state of human capital analytics.
This RWG covered a wide range of topics, including the challenges faced by many professionals, as well as guiding principles, processes, models, and standards that can be used to effectively navigate this situation and meet intended goals. The group identified key metrics, sources of data, common applications, and best practices that can lead to rapid development and deployment of a sound human capital analytics function. Finally, the group created a framework to better understand the process of human capital analytics and increase the likelihood of success.
Results of the study included several specific strategies for organizations to consider as they develop their human capital analytics practice, such as:
- Identify the key business issues, problems, or opportunities facing the organization
- Build hypotheses surrounding the causes and possible effects of an issue or opportunity
- Consider methodologies, consistency, information management, project management, technology, and data governance
- Strive for high quality, alignment, transparency, credibility, and stakeholder input and buy-in as you implement your approach.
For more information, please download the report, Human Capital Analytics: A Primer, which provides insights into the key findings and strategic guidance offered by the RWG
View our complete listing of HC Analytics blogs.