HR Professional’s Guide to Kicking Analytics Anxiety

October 2, 2012

human resource analytics

As an HR practitioner, you’ve probably seen a tremendous increase in the number of articles in business publications that address … numbers, data and analytics related to talent management. To a people person like me that prefers to communicate with words, feelings, and stories rather than metrics— it always sounds as if I’m about to be called on to convert inches to millimeters or something equally perplexing.

For companies of all sizes, metrics are becoming an increasing focus of HR professionals. And the metrics in question have to do with data related to companies’ employees. In today’s small business, employees often account for the largest initial investments and ongoing expenses among company assets. So it makes sense that business leaders want to better understand and track their people assets.

The very phrase human capital metrics is enough to make a right-brained professional cringe don’t you think? For us, writing comes as naturally as math skills do to numbers people. Need a policy or procedure written? No problem. How about a job description? Can do. But you want to know about turnover ratios or ROI (return on investment) for training programs?

I’m breaking out in a cold sweat.

I know I’m not the only one because many companies – especially smaller ones – don’t track HR metrics to a great extent (or at all). It isn’t that they don’t care about the numbers. It’s that there are multiple issues that can interfere with an HR professional’s ability to collect and interpret people-related metrics.

One of the most commonly noted problems is difficulty accessing the critical data. If you are in a smaller organization and still handling most or all of your HR processes manually, you can probably identify with this situation. Different departments or divisions may have their own records in spreadsheets. Data may be spread across geographic locations. Even if some of your company’s data is electronic, parts of the organization may use different systems to collect and store information about employees.

In companies where data about employees can be accessed, questions may arise about its accuracy. Is it current? Can it be verified? Do all company departments or divisions define specific metrics in the same way? For instance, does turnover mean the same thing in HR and in Marketing and in Finance? If not, which department’s number is the right one?

It’s easy to see that all kinds of issues can affect HR departments’ best efforts to track meaningful data about employees. Still, that doesn’t mean you won’t be asked about workforce metrics. And the way trends are moving, that will probably happen sooner, rather than later.

To reduce your analytics anxiety, start slowly. Settle on a few measures that you know will be relevant to your company. Let’s take turnover, for example. Turnover is widely cited as the most commonly tracked HR metric. What will you need to know about it? (These questions can help you think about other metrics you want to examine, too.)

  1. How does our company define turnover?
  2. Do different departments or divisions have different definitions?
  3. Who tracks turnover?
  4. Can we agree on one definition and a single source to track and report turnover data?
  5. What aspects of turnover are important to understand and likely to most affect our company?
    1. Did an employee leave voluntarily or not?
    2. Was it a long-time employee?
    3. Was it a new hire?
    4. Why did he or she leave?
    5. How hard will it be to replace him?
    6. Does her leaving affect our company’s ability to perform?

(Hint: All of these questions could be added as fields in your BambooHR account, allowing you to run your hr reports on them!)

Those are just a few of the basic questions you’d want to think about before starting to track turnover in your organization. I hope they were enough of an example to show you that the numbers are only the beginning of the task where metrics are concerned.

Your real challenge is interpreting what the numbers reveal. Is turnover high among new hires? That could signal ineffective on-boarding, or training that isn’t meeting new employees’ needs.  Or it could mean that your company isn’t hiring the right people, or that job descriptions aren’t accurately conveying the work to be done.

Clearly, there are many things we can learn from tracking just a few key measures related to employees. Here’s an article on HR Metrics for Small Organizations, or visit the SHRM website for more information.

Automating your data with an easy-to-use and easy-to-customize human resources management system from BambooHR can help you collect and report employee metrics. It’s one of the most painless ways us right-brained people can do that. And because the real value of tracking metrics lies in the stories behind them (and our ability to tell the stories), we still need those word skills. I, for one, am glad about that!





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Brenton Williamson

Aspiring filmmaker living in Provo, working with great people at BambooHR. Mountain biking is keeping me from becoming rich and famous.