The term “employee analytics” is becoming more prevalent in the modern organisation. Much like “customer analytics”, employee analytics can give vast insight into the psyche and behaviour of your internal staff. So why don’t companies look at employees like customers? And why do some see it as HR’s “credibility” ticket back to the Boardroom table?
The term is centered heavily on Big Data (a new buzzword bandied about allowing companies to become innovative) that can be found within each and every organisation. The key is to unlock this Big Data and make it work for the business, employees and employers as well as solve fundamental business problems from within.
So what are the problems?
These problems are essentially about employee performance, engagement, retention and attrition. Employee analytics in this case are the key to discovering how employees are performing using an objective, measurable and data driven process as well as discovering whether employees are engaged, how a business can attract, retain, manage and develop top talent and how to solve business related issues.
What’s the Big Idea about Big Data?
Most successful businesses spend thousands on analysing their customers, including their buying habits, their networks, their influencers, their circumstances and more in minute detail. This allows them to tailor their product or service to that exact market. So if companies focus on external clients, why do they not focus on their internal clients (employees)? Theoretically, if you know your staff well enough, surely you will be able to service your clients even better?
HR should look at each and every individual in the organisation, their network or immediate surroundings on which the individual has an impact and the contributions they have to their eco-system, are these positive or negative? In doing so they will be able to pinpoint which exact environment a specific team member is most suited to and place them in a situation where they will thrive. A win-win for both business and employee.
Sports team managers and scouts all over the world use analytics to identify the value in each player. Billy Beane for example, GM of Oakland Athletics (MLB) in the USA was one of the first to use Sabermetrics or “Player analytics” to re-invent a 100 year old recruiting practice and to identify the valuable players who others overlooked due to a number of biased reasons. He focused on the numbers such as strike rate, speed and more and crafted the Oaklands Athletics into one of the most cost-effective teams in baseball. In the 2006 MLB season for example, the Oakland Athletics ranked 24th of 30 major league teams in player salaries but had the 5th-best regular-season record. In 2002, they became the first team in over 100 years of American League baseball to win 20 consecutive games, and the successes continued from there. High level, he competed on average with a $100 million dollar less budget then the teams he consistently beat. Innovative? Yes!
In 2011, Brad Pitt played Billy Beane in the movie, Moneyball. View a snippet of the movie here:
So what can employee analytics offer?
Employee Analytics can allow for a business to be built with team members that are not overlooked for biased reasons. By using employee analytics a business is able to precisely pinpoint the right area of the business for a specific team member and therefore build high performance teams for less. It allows businesses to move away from traditional HR and reward or make decisions based on a series of interconnected principles and facts. It focuses not only on the present health of a company but also guides the future by providing faster feedback cycles. By monitoring team members and their positions you are then able to build predictive analytics. A powerful tool to ensure the optimum outcome for your business.
In short the Benefits of Employee analytics are:
• Better succession planning
• Improved ability to target high potential individuals who need training
• Ability to understand the impact of training and development
• Improve engagement and motivation amongst teams
• Faster feedback loops
• Rethinking traditional recruitment models by hiring today to be relevant tomorrow
• Re-engineer performance management policies
• Identify the different drivers of talent
• Moves HR from retrospective to future focused
Areas of Impact
There are 4 key areas where employee analytics will have a profound impact on a business and we look at these below.
1. Performance Appraisals: Performance appraisals of the past involved a human (line manager) to rate an employee’s performance. Due to its subjective nature, an employee may be completely overlooked for a number of biased reasons. As much as we humans try to be objective, it is almost impossible given our complex psychology. This is where numbers come in and the numbers don’t lie. By capturing numbers such as sales figures, dynamic goal achievement and creating a series of other inputs, line managers will be provided with a profound reality check on employee performance, connection and value.
2. Learning and development: Learning and development is another area where employee analytics can be utilised. Gone will be the days of outdated, irrelevant “blanket” courses and in will come tailored learning opportunities that are specific to each employee’s goals, ideals and interests.
3. Awards and recognition: Awards and recognition will be focused on achieving what one sets out to achieve rather than confirming to a generalised system of compliance and ranking.
4. Employee wellness and engagement: It goes without saying that employees who are achieving what they set out to achieve and are rewarded for this will have a rippling effect on employee wellness and engagement. As engagement and wellness increase so absenteeism and unproductivity will be reduced.
So how can HR find the value in the numbers?
HR needs to be in a position to be able to unpack business issues and using data that is available to solve these problems in order to be seen as a value added partner. Fundamentally employee analytics comes down to technology. Using numbers such as days absent, clocking-in times, training results, sales figures, sick days and more, HR and the complementing technology will be able to build “Dashboards “of statistics for each employee where, at the touch of a button, relevant information is immediately available for Managers, CEO’s and other relevant decision makers. Concurrently other radical new ideas such as Virtual Reality and Gamification can be used for training, appraisals and recruitment. In a gamification environment for example employees are given the opportunity to interact with other team members and utilise their leadership, team and initiation skills. Virtual Reality can offer the same within a predefined scenario, making it easier to predict how an individual would react in a certain situation. Ultimately HR will be able to do better business with technology and find the best talent in the data, and analytics is the tool for HR to get back its credibility within an organisation.
Bang for buck
Critically employee analytics will provide hard evidence about employee related needs and it has been said that ‘Employee Analytics’ will eventually will be as important to the CEO as the balance sheet and P&L statement.
Given all of this, isn’t it time that your business considered employee analytics?
Speak to ClarkHouse Human Capital for further information on future-proofing your business to leverage your internal organisation data to enhance performance, efficiency and productivity.
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