THE ability to measure, monitor and control processes is fundamental to business improvement. Unfortunately, the human side of the business is often overlooked and examined last as an area for improvement.
An investment in a human resources (HR) initiative has significant upside because knowledge and skills can be applied in one situation and transferred to another.
When organisational leaders start thinking of leveraging HR investments to achieve business results rather than overhead costs, they can begin to build competitive advantage.
Transactional versus evaluative information
There are many types of HR data being collected throughout the organisation. Due to the quantification of data and the ability to capture both quantitative and qualitative data more easily, even small organisations are swimming in terabytes of employee information.
Most HR data collected relates to the employees’ pay grade, location, job title, experience and other demographics.
Less commonly, yet arguably more important, is the data on the employee’s opinions and behaviours, such as responses to an employee engagement survey or their performance ratings during the annual review process.
Generally, HR data can be classified as transactional or evaluative.
Transactional data comes from talent management systems (TMS) and human resource information systems (HRIS), which store basic information like demographics, qualifications, job histories, and compensation and benefits.
The same is true for learning management systems, which store courses, learner histories, compliance status and certifications.
On the other hand, evaluative data comes from:
• Employee surveys (for example, engagement surveys or exit surveys); and
• Business systems (for example, sales from customer relationship management or performance appraisals from the performance review system).
The importance of talent analytics
Talent analytics is a growing area of study and application that focuses on measuring talent, such as skills, processes, people, capabilities, opinions and performance, with the intent of describing, explaining, predicting and optimising employee performance.
If employee performance can be predicted and optimised, so can organisational performance.
Talent analytics provides business intelligence for the C-suite so they can make business decisions related to the workforce.
Leaders try to answer questions with the best available data. They use talent analytics for strategic decisions. Others use them for tactical decisions.
Team managers use engagement surveys to know whether the work environment needs adjustment.
Recruiting managers monitor candidate quality, constantly looking for the best sources for talent.
HR monitors performance appraisal results to identify top talent for promotion and bottom talent for remediation or termination.
Real-time data on a massive scale facilitates strategic decision-making for leaders and tactical decision-making for managers.
All in all, let’s not forget the employees. They benefit from the flow of data by providing their opinions, by getting performance feedback, by learning about new and engaging career opportunities, and ensuring their skills fit their job demands.
Fitting talent analytics into business processes
Just as there is no single silver bullet that solves all HR problems, there is no single form of measurement that addresses every talent need.
As such, multiple measurements are needed in many areas in order to optimise talent performance.
There are six distinctive functional talent areas — recruiting, learning and development, talent, leadership, engagement and performance.
An integral part of creating actionable business intelligence is the ability to report information derived from data. Business intelligence is often derived in three distinct ways.
At the lowest level, business intelligence is realised when data is turned into information via simple reports.
The second way to provide business intelligence is through aggregate reporting.
Lastly, business intelligence is provided when data from disparate data sets are joined and analysed using advanced statistical methods.
Where to start measuring talent data
The measurement journey is long with many milestones. There are many ways to start. Some ways fit some organisations better than others, but here are a few good places to begin:
• Establish a comprehensive measurement strategy — a vision and a plan will provide a final destination and roadmap for the journey; and
• Build an analytics group in-house that has the knowledge and skills to set strategy, manage stakeholder needs, and perform all the technical analyses that will be needed.
• Select one area to measure first, such as recruiting or performance appraisals;
• Select an expert partner who can provide guidance and consulting along the way; and
• Leverage technology that can measure and report your talent needs systematically.
In the new world of big data, it is essential to have a talent analytics strategy and the right tools to measure the transactional and evaluative aspects of talent.
This will allow organisations to effectively monitor and manage talent, thus building a competitive advantage.
Article by Robin Boomer, client solution manager for Asia-Pacific at KnowledgeAdvisors, which is represented by ESI International throughout Asia-Pacific. For more information, visit www.esi-intl.com.sg/learning-measurement-solutions.php