3 Tips to Help You Get Started in People Analytics

When the analytics wave first hit, it seemed the blogosphere, research houses, and vendors were shouting from every street corner that we all needed to hire data scientists right now or end up on the ash heap of history.

Those with deep enough pockets to risk it jumped in, only to become disillusioned. Yes, there were some successes, but many weren’t seeing the game-changing impact they expected. CFOs questioned why they weren’t seeing ROI.

The early adopters found it’s not all about technology and data wizards.

Embedding people analytics in the organization takes hard work. There were some enormous mountains to climb:

• Putting together a team with the right skills. Data scientists and engineers were scarce and expensive.
• Getting data to the right place, at the right time, and in usable condition. Everyone loves to cook, but no one enjoys cleaning up the mess. We heard nightmare stories of multi-million-dollar data cleanups.
• Learning how to ask the right questions. Some early enthusiasts advocated amassing vast depositories of data and applying statistical methods to see “what the data would tell us.” Sort of like looking for answers in a library with no catalog.
• Changing the way people make decisions. Way back when we were becoming HR professionals, our mentors taught us risk avoidance, "best practices," personal relationships, experience, and gut instinct.

The early adopters are much better at it now, and vendors have sprung up to fill the gaps. Enough time has passed, and we now see real growth and impact from the effective use of analytics.

It’s time to get on the fast track—but how do you do it with a limited budget?

1. Get Control of Your Data

If you don’t have a data management strategy and a data governance framework, that's the place to start. You can use the tools and frameworks published by the Data Governance Institute and rely on its resources to train your people.

A data governance framework is a set of policies, procedures, and standards, a system for managing data assets. Data governance is “a system of decision rights and accountabilities for information-related processes.”

The framework doesn’t replace or superimpose itself upon your business structure but works within it using the decision rights and accountabilities that already exist.

Here’s how to get started:

1. Define the scope governance program by identifying the business units, data types, and systems that are in scope.
2. Create a data governance team or council responsible for defining and enforcing policies and standards. The team should include executive sponsors, data stewards, and data custodians.
3. Develop policies and standards for data quality, metadata management, data privacy, and security, considering your industry needs and regulatory requirements.
4. Implement the framework by defining processes for data management, including data acquisition, storage, processing, and dissemination.
5. Monitor and measure the effectiveness of your data governance program by tracking KPIs such as data quality, compliance, and user satisfaction.
6. Continuously improve reviewing and updating policies and standards based on feedback from stakeholders and changes in the regulatory environment.

Instead of concentrating on cleaning up bad data, focus your efforts on finding the cause of bad data to stop creating it. That effort alone could more than cover the costs of the program and data cleanup.

2. Start with a business problem

Most mid-size and larger organizations have launched people analytics efforts. Dozens of people analytics consulting firms now exist, and most business analytics firms are establishing themselves in people analytics. Human capital consulting firms have moved into people analytics through partnerships and in-house operations.

However, most efforts have focused on cost savings and efficiency. Most HR teams, even further behind, are still working on cleaning up their data and getting reporting right.

Deliver insights, not just data. Leaders need analytics for the insights that enable their decisions. When managers and decision-makers don’t have the data insights that lead to sound strategic talent decisions, the entire firm suffers. For example, to manage in a competitive talent market, you need more than recruiting skills in HR. Your business leaders need insights into labor market intelligence. [^i]

Throwing data at managers or launching a “let’s become data-driven” program won’t induce them to become better decision-makers. The right insights—where and where they need them to solve a business problem—will make the right things happen.

That should be the primary focus of people analytics. It’s where HR will create the most value. The value of analytics to HR processes and services is significant but consider the value of a critical strategic business decision. Expanding to a new location can be a considerable expense with a reward that can transform the business. You may reap only the cost if you don’t have a workforce with the right skills.

3. Borrow or Rent the Expertise

According to Indeed, the average salary for a data scientist is $123,842. When you add in benefits and other costs, the total is around $160,000. It would be nice to think you can find a single person with all the right attributes, but we are doubtful.

Data scientists fall into two groups: those with a mathematics and statistics background and others with a technical background. You will need both skill sets.

However, your people analytics team needs more than data science:

• strategic thinking, with knowledge of the business and the industry.
• visionary leadership, with the ability to communicate to stakeholders at every level, including board members.
• business acumen.
• master storytelling skills.
• data management and infrastructure; and
• data visualization.

Some skills will already be in your organization. Marketing may lend a data analyst. You can probably convince a senior visionary leader to serve as a sponsor. Your CIO may have the data management and infrastructure knowledge, but maybe not the capacity. Most CIOs we know are already overworked.

You may find it cost-effective to team up with an analytics consulting firm. There are many factors to consider in deciding whether to outsource your people analytics initiative. Cost may be the most important thing to consider, but basing the decision on cost alone may be a mistake. Work with a vendor who complements your skill set, has experience working in your industry, and has shown the ability to deliver on your requirements.

Consider also how quickly a partner can help you get up and running. You may speed up your ramp-up time and save costs by doing so.

We encourage you to talk with analytics providers to understand what they can and can’t do for you.

Read More

How HR Can Drive Business Value Through People Analytics

How Advanced Reporting Can Build a Bridge to People Analytics

How to Build Your People Analytics Team

Build Your People Analytics on a Strong Operational Reporting Foundation

Measuring the Immeasurable in People Analytics

How to Succeed in People Analytics: Think Big and Start Small

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