What is Workforce Intelligence, how is it different from HR Metrics, and how can we use this to improve Organisational Effectiveness? This is a question that most people are asking and, somehow, we just don’t seem to be able to explain it well enough. It think the simple answer is – Workforce Intelligence is about Organisational Effectiveness (Strategy), and HR Metrics is about HR Operational Effectiveness.
In a previous blog (Measures, Metrics, Analytics – the Difference) we defined what a measure is and what a metric is. In this blog we relate metrics and analytics to Operational and Organisational Effectiveness and the processes to achieve both.
As Michael Porter stated in his article “What is Strategy” – “operational excellence is not strategy”! Operational Effectiveness means the ability to perform activities better than the competition and this includes efficiency, performance, productivity, customer orientation, etc. And there are a myriad of activities within any one organisation that ultimately make up Operational Effectiveness. But this is not Strategy.
Metrics are used to measure Operational Effectiveness. There are any number of “top nn HR metrics” lists that you can get from the internet and there are over 600 HR metrics generally available through TalentAlign. But in reality, the “best” metrics for your organisation are those that:
- Are contextual to your organisation, that is, they are relevant to the business of the organisation,
- Show historical and current information such as trends and lagging indicators,
- Could be used for modelling future events, such as leading indicators and predictive analysis,
- Should engage stakeholders (staff, management, executives, shareholders), and
- They should motivate action, not just looked at and filed away.
The kind of questions that the C-Suite want answers to related to HR Operational Effectiveness are:
- Do we attract and hire the best people?
- Do we retain our key/most productive people?
- How productive is our workforce and can this be improved?
- How are workforce costs optimised?
- Is the workforce committed to achieving the goals and objectives of the organisation?
- If we need to, where can we trim workforce costs?
To decide which HR metrics will provide the required answers, you need a process:
- Meet with executive and business unit management in order to:
- Understand the business objectives of the overall organisation as well as the individual business units.
- Relate this to HR strategy and services that will enable business units and the overall organisation to achieve their goals.
- Establish the HR Strategy and complementary objectives and activities.
- Understand clearly what HR Metrics could be applicable to measure the objectives.
- Establish, generally from IT, what data is available and how it can be delivered as metrics.
- Educate management in the use and interpretation of the metrics and how they relate to their business objectives.
- Start with what you have and get early results. Metrics programs are constantly being evaluated, tweaked, and, sometimes, changed completely. As the business changes – so does what you measure.
Strategy, on the other hand, is about “choosing to be different”! Analytics is about using combinations of metrics as well as new data to provide information on the “most likely outcomes” of possible management decisions. Based on this information, management decisions can be based on the best (or preferred) “most likely outcome” – rather than on guesswork and intuition. So, Analytics is about proving management with choices and “most likely outcomes” of those choices, with an acceptable level of confidence.
The kind of questions that the C-Suite want answers to related to Workforce Strategy are:
- Is the structure of the organisation optimal to achieve our strategy?
- Do we have the right skills in the right jobs at the right cost?
- Is there a pipeline of skills available to enable us to achieve our goals?
- What are the core Workforce Drivers of Organisational Performance and how are they being leveraged?
- What HR activities give the best Return on Investment?
- If we need to revise the business strategy, how quickly can the Workforce adapt and be ready?
As with HR Metrics, the road to Workforce Analytics also needs a process:
- Identify the HR Metrics that you are already using that can also be used for predictive purposes.
- Meet with executive and business unit management in order to:
- Understand the core drivers of organisational strategy.
- Understand the “cause and effect” relationship between key metrics.
- Establish data and other standards that ensure reliability and consistency of data and measurement.
- Establish, generally from IT, what data is available and how it can be delivered for analytics.
- Categorise data and other elements for Analytics.
- Mine the data and establish statistical linkages to prove or disprove relationships.
- Identify the key drivers, and the proven relationships, that create business success.
- Educate management in the use and interpretation of the analytics and how they relate to their business objectives.
- Create an effective predictive model for organisational performance.
Can you go directly to Workforce Intelligence? Yes you can … BUT! It is better to consolidate and develop understanding of the HR operational metrics and what they mean across the organisation first. In this way you will bring management along the route with you as they see and experience the benefits.
Also, you become accustomed to working in a process – a route. Analytics is “trial and error” – what works what doesn’t, is there or is there not a “story” to be told? Management all-too-often get impatient with this approach. They prefer to see “hard facts”.
So, our recommended route is to first go the “Metrics” route, get quick wins from using the data, and then move on to the “Analytics” route, following these processes as much as possible.
If you would like assistance with setting your route, deciding on the metrics to use, or with moving on to Analytics, please give us a call. We have the ability and the tools to make your journey quicker, easier and more cost-effective.