Minting the New Currency of HR - Insights
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The document discusses how people analytics is transforming HR by providing actionable insights that add value across the function and help elevate HR's strategic role in business successes. It notes that 84% of business leaders surveyed cited people analytics as important. While only 2% of HR organizations currently have mature analytics capabilities, early adopters stand to gain advantages. People analytics insights can optimize various HR processes like recruiting and retention, and transform how HR interacts with both the business and employees. Ensuring data security and developing analytics literacy among HR practitioners are important challenges for organizations to realize the full benefits.
Minting the New Currency of HR - Insights
- 1. 0101 People analytics is transforming the business currency of HR from checked boxes to actionable insights. These insights are adding value to every aspect of HR and elevating the function’s role in the delivery of business successes. They also are bringing new responsibilities—chief among them, ensuring the ethical use of this information and compliance with regulatory standards. Is it any wonder that 84 percent of the business leaders and HR executives surveyed in Deloitte’s 2018 Global Human Capital Trends study cited people analytics as important or very important?1 Minting the New Currency of HR—Insights 1 1 1 1 1 1 1 1 1 0 0 0 1 1 1 1 0 1 0 1 1 1 1 0 1 1 1 0 0 1 1 1 10 0 1 1 1 1 01 1 1 1 1 1 1 1 1 0 0 1 1 1 1 0 1 1 1 1 1 1 1 1 1 0 0 1 1 1 1 0 1 1 1 1 1 1 1 1 1 0 0 1 1 1 1 0 1 1 1 1 1 1 1 1 1 0 0 1 1 1 1 0 1 1 1 1 1 1 1 1 1 0 0 1 1 1 1 0 1 1 1 1 1 1 1 1 1 0 0 1 1 1 1 0 1 1 1 1 1 1 1 1 1 0 0 1 1 1 1 0 1 1 1 1 1 1 1 1 1 0 0 1 1 1 1 0 1 1 1 1 1 1 1 1 0 0 1 1 1 1 0 1 1 1 1 1 1 1 0 0 1 1 1 0 1 1 1 1 1 1 0 0 1 1 1 1 0 1 1 1 1 1 1 1 1 1 1 1 1 0 0 0 1 1 1 1 0 1 0 1 1 1 1 0 1 1 1 0 0 1 1 1 1 1 1 1 1 1 1 0 0 0 1 1 1 1 0 1 0 1 1 1 1 0 1 1 1 1 1 1 1 0 0 1 1 1 1 0 1 1 1 1 1 1 1 1 1 0 0 1 1 1 1 0 1 1 1 1 1 1 1 1 0 0 1 1 1 1 0 1 1 1 1 1 1 1 1 1 0 0 1 1 1 1 0 1 1 1 1 1 1 1 0 0 1 1 1 1 0 1 1 1 0 0 1 1 1 11 1 1 1 1 1 0 0 1 1 1 1 0 1 1 1 1 1 1 1 1 1 0 0 1 1 1 1 0 1 1 1 1 1 1 1 0 0 1 1 1 1 0 1 1 1 11 1 1 1 1 1 1 1 1 0 0 1 1 1 1 0 1 1 1 1 1 1 1 1 1 0 0 1 1 1 1 0 1 1 1 1 1 1 1 1 1 0 0 1 1 1 1 0 1 1 1 1 1 1 1 1 1 0 0 1 1 1 1 0 1 1 1 1 1 1 1 1 1 0 1 1 0 1 1 1 1 1 1 0 0 1 1 1 1 0 1 1 1 1 1 1 1 1 1 0 0 1 1 1 0 1 1 1 1 1 1 1 1 0 0 1 1 1 1 0 1 1 1 111 0 1 1 1 1 1 1 0 0 1 1 1 1 0 1 1 1 1 1 0 1 1 1 10 Introduction Just a few years ago, HR was primarily viewed as a support function—filling job openings, administering benefits plans, and ensuring compliance. Today, HR is considered a strategic adviser and works with management to drive bottom-line results. The principal difference between HR then and now: People analytics. 84%cited people analytics as important or very important
- 2. Minting the New Currency of HR—Insights | People analytics insights will transform HR 0202 People analytics is an emerging and fast- evolving technology. So it isn’t surprising that Bersin research found that only 2 percent of HR organizations have a mature people analytics capability.2 But that also indicates there is a first-mover advantage available to forward-thinking HR leaders. They will be among the first to deliver more engaging, analytics-powered HR offerings, such as one-stop employee platforms, which will improve and differentiate the employee experience. These digital platforms, including Deloitte’s ConnectMe, provide employees with immediate access to everything related to their employment, wherever they are and whenever they want it. They empower employees to manage the logistics of their own work lives—and to make faster, better choices, with the help of automated services like recommendation engines. Analytics don’t just power platforms and other digital tools; the granular insights they offer into employee needs, desires, and behaviors also inform and shape the design of employee offerings, the structure of work, and organizational culture. Thus, the applied insights of people analytics can influence employees’ behavior and drive up their engagement, resulting in greater likelihood of achieving strategic business objectives. In a very tangible manner, people analytics enable HR to adopt a more customer- centric view of employees—the kind of view that savvy marketers have of consumers. Analytics allow HR to better understand how employees work on their own and together, to distinguish between different segments of employees, and to discover what motivates employees (and demotivates them), among many other things. The business of HR has always been people, but now, with the help of analytics, a previously unobtainable view and understanding of employees is possible. The insights generated by people analytics can be applied to every HR activity. Already, recruiting is a top area of analytics focus among companies, with performance measurement, compensation and workforce planning, learning, and retention following closely behind. People analytics will likely be used to enhance the output and efficiency of a variety of HR processes—improving job offer acceptance rates, reducing HR help tickets, and optimizing compensation. It will help identify workforce competency gaps, articulate the implications of different hiring strategies, and identify those talent characteristics that foster high performance. And it will enable organizations to quantify the cost and impact of HR processes and programs, and surface insights that reduce turnover costs, optimize training spend per employee, and predict the ROI of HR initiatives. Already, recruiting is a top area of analytics focus among companies, with performance measurement, compensation and workforce planning, learning, and retention following closely behind. HR practitioners who are early adopters will gain the advantage of more powerful people management tools. Analytics-powered HR dashboards, for example, feature “measures that matter,” that is, metrics that support business goals, objectives, and decisions, such as job-fill rates and retention levels. These metrics can be calculated in real-time, allowing HR to act or intervene more quickly and effectively. The traditional annual employee satisfaction survey is positively glacial in comparison to an automated program of online pulse surveys whose results pop up on HR dashboards or apps that can be shared across the organization as the surveys are completed. People analytics insights will transform HR
- 3. Minting the New Currency of HR—Insights | People analytics insights will transform HR 03 Today’s employees are used to a consumer- grade, social media–like experience. As a result, they have high expectations for their employers. Fortunately, HR can leverage people analytics to enhance the employee experience. Insights can be gleaned by examining data on many factors—how an organization retains top employees, the effectiveness of training programs, the impact of an organizational structure, and the interaction between employees and the company, just to name a few. Understandings in hand, an organization can make better, more-informed decisions, developing programming that impacts employees throughout the life cycle—from recruitment and onboarding, to learning and performance management, to growth opportunities and rewards. And eventually, to separation or what Deloitte calls “being an employee for life.” By focusing on topics and challenges that are important to their business counterparts, HR organizations that adopt people analytics will change the nature of the relationship with those same internal stakeholders. If, for example, a company’s leadership team is concerned about lagging revenues in one area of its business possibly caused by extended time to market, during the holiday season, HR can use people analytics—analyzing time spent, movements, performance, payroll and more—to determine if productivity is a factor given vacation and other year-end commitments over the holiday season. Those insights can help the business decide whether an increase in staffing during future holiday seasons could boost productivity and sales. This might also impact leadership decisions around engagement of existing employees—are there programs in place that keep employees happy and productive? The good news? More and more organizations are realizing that HR is not the only function to benefit from people analytics. Our research shows that more than 70 percent of executives are making strides to integrate data into everyday decision-making processes.3 When HR is able to quickly provide data-driven insights and actionable recommendations to address challenges that limit achievement of strategic operating and financial results, it will become a powerful, strategic ally to the other business functions, and the organization as a whole will benefit. People analytics insights will transform the way HR interacts with the business People analytics insights will transform the way HR interacts with employees Over 70% of executives are making strides to integrate data into everyday decision- making processes. More and more organizations are realizing that HR is not the only function to benefit from people analytics.
- 4. Minting the New Currency of HR—Insights | People analytics insights will transform HR 04 Like all promises, the promise of people analytics comes with a couple of non- negotiable conditions. HR leaders who want to capture the insights offered by people analytics for their companies will have to meet them. One condition is the need to develop analytics literacy among HR practitioners. As people analytics become embedded in the function, the ability to use them will expand beyond the technical experts in the core analytics team to practitioners across the function. For example, HR professionals will need to be able to use tools such as organizational network analysis and interaction analytics, which examine employee behavior to better understand opportunities for business improvement. Analytics knowledge is going to be a critical capability throughout HR with implications on the HR operating model and career path opportunities. A second non-negotiable condition of the people analytics promise is data integrity and security. Data is the fuel needed to run HR’s new insights engine, and it will flow into HR from multiple “listening channels” both inside and outside companies. Safeguarding that flow is of paramount importance, yet our research finds that just 22 percent of executives have excellent safeguards to protect employee data.4 To adapt, many HR organizations will need to reconsider and change how data is collected, stored, and used. It will also mean adopting robust policies to ensure that data security, use transparency, and employee privacy is maintained. These conditions notwithstanding, the promise of people analytics is too valuable for HR organizations to pass up. To trade in the new currency of insight, HR leaders will need to stand up a mature people analytics capability as soon as possible. Insight quality depends on analytics literacy and data integrity CASE STUDY The challenge The result The solution Deloitte helps a health system use insights to transform RN turnover rates. A regional health system with more than 40,000 employees was experiencing above- average turnover of its nurses. The system sought to better understand its nursing workforce to predict and mitigate the negative impact of future workforce trends. Deloitte implemented advanced analytics and data science to better understand the drivers of turnover. This included aggregating five years of workforce data from multiple internal sources, segmenting clinical units to better understand employee movement, and deploying multiple machine learning, statistical methods, and alternative visual techniques to deliver data-driven insights. •• The discovery of previously unknown drivers of turnover, including instances where managers were not addressing employee desires for alternative assignments and departments with a large span of control. •• The creation of a predictive model to identify employees at high risk for resignation. •• The development of targeted, fact-based talent management solutions to address turnover challenges.
- 5. As used in this document, “Deloitte” means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www. deloitte.com/us/about for a detailed description of our legal structure. Certain services may not be available to attest clients under the rules and regulations of public accounting. This communication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively, the “Deloitte Network”) is, by means of this communication, rendering professional advice or services. Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional adviser. No entity in the Deloitte Network shall be responsible for any loss whatsoever sustained by any person who relies on this communication. Copyright © 2018 Deloitte Development LLC. All rights reserved. www.deloitte.com/connectme Endnotes Contributors 1. 2018 Deloitte Global Human Capital Trends, “The rise of the social enterprise,” Deloitte Insights, 2018. https://www2.deloitte.com/insights/us/en/focus/human-capital-trends.html. 2. High-Impact People Analytics, Bersin, Deloitte Consulting LLP, 2017, www.bersin.com. 3. 2018 Deloitte Global Human Capital Trends, “The rise of the social enterprise,” Deloitte Insights, 2018. https://www2.deloitte.com/insights/us/en/focus/human-capital-trends.html. 4. Ibid. Amel Arhab Senior Manager Deloitte Consulting LLP aarhab@deloitte.com David Fineman Specialist Leader Deloitte Consulting LLP dfineman@deloitte.com