Demystifying Talent analytics and Workforce planning
As any new practice or tool, sometimes I feel confused of what they are, and must say I was confused when everyone started talking about HR analytics and Workforce Planning
My humble definitions are the following.
HR analytics is the use of information to drive Insights to make more informed talent decisions.
HR analytics uses employee data, that is using statistical tools and models, is analyzed to generate insights.
It is different from HR reporting, that is the presentation of data to provide information.
For example, HR reporting would be the calculation of employee turnover during the year.
Basically, you take data, make simple calculations and get a report.
HR analytics would be, for example, to look at data from an employee engagement survey, use statistical modeling (a regression) and determine which items have more impact in driving employee engagement; this would help focus on the items that have higher impact rather that to focus on all low scores.
Continuing with this example if you get the engagement survey information and focus on the lower scores you get, that’s fine, but some lower scores will drive engagement more than others, so with the use of analytics you can focus your actions on those that will have higher leverage in driving engagement.
Work we have done goes beyond employee data and connect business data as well.
For example, we can optimize the team composition and employee profiles of teams serving different customers.
On one had we look a business data: we analyze customer results, for example revenue growths versus plan, on the other had we look at employee data: and look at the team composition (numbers of people, seniority of each member) and the individual characteristics of those employees working for the customer account (years of experience, educational background).
Using analytical tools, we can determine which is the team composition and employee characteristics to serve customers. In this example we use employee and business data to generate insights that inform better talent decisions and correlate with higher business impact.
To get in the field of HR analytics you do not need any specific system or software implementation, I say this because there are a lot of offerings and confusions regarding this matter. All you need is the data that you have , a personal computer and a statistic moldering software like SPSS or R (which is free by the way)
Workforce Planning, is a process, to align Business Strategy with Talent strategy based on insights using HR analytics. (Again, no software implementation needed)
The process takes the Business Strategy and growth plans, uses analytics to diagnose current and future state of workforce of an organization, both in number and composition.
Based on these insights, interventions are defined to achieve the desired talent outcomes that are required to support the business strategy.
Usually the Workforce Planning Process have a series of steps:
1-Understanding the Business Strategy, growth ambitions and define the talent problem to solve (initial hypothesis)
2-Diagnose current state, and project future scenarios.
This is the analytics heavy phase, we’re you use past employee data to analyze the talent you have, how you are promoting, retaining and compensation your talent, what talent you will have if you keep hiring, promoting and loosing people like you have done in the past.
You use growth projections and create scenarios of how your talent would look like.
You also need to look at the external labor market, to understand not only macro trends like unemployment, education systems and general talent supply, but also get very granular about the external talent pool for your critical roles and capabilities.
In the diagnose phase, quantitative analysis needs to be complemented by qualitative analysis. This can be in the form of structured interviews to senior leaders.
The Diagnose phase finishes with a series of insights on the work to be done.
3-Define actions. With the insight you have, now you need to create the actions and interventions you will take to achieve the desired talent for the future. Some basic actions are to define if you will buy or build talent, and how you will do so.
You need to put in place plan in terms of acquisition and development of talent, retention of key players, compensation levers, leadership development and functional capabilities.
4-Make choices. Strategy is about defining what to do as much as defining what not to do. Once you have your initial actions define you need to prioritize them. A good way to do so is to focus on which actions are more critical for business impact and focus on them.
5-Detailed plans. After you have prioritized your actions you need to create detailed action plans, with Timmings, team accountable to execute it and investment required.
Usually is helpful to have three-year plans, that are then detailed more granularity in year one.
6-Execution and follow up. The worst strategy is the one not executed, so after all the hard work comes execution and tracking.
After each execution cycle (of one year) it’s useful to review plans to check if they need to be updated based on external changes or business priorities.
Hope this has helped in bringing a brief and simple description of these two new tools and practices that for sure are an upgrade to Advanced Talent Management.
Miguel Premoli April 2018