Recently I’ve been talking to a number of customers about how to structure and build an analytics team for Human Resources. Often, the customer is asking about an analytics team, but when I dive deeper into the conversation, I realize they’re actually talking about a combined reporting and analytics team or just a reporting team. Why does that distinction between analytics and reporting matter? I believe that the ability to analyze data is distinct from the ability to run reports, and that each provides its own, different value to the organization. Both are necessary and important, but they should not be lumped together and managed as the same thing. Why? Because generally, analytics teams have a broader strategic focus.
In more than 15 years of working with strategic HR data and analytics I have learned to make this distinction between analytics and reporting because I’ve seen many customers fail when they blur the two together. I’ve heard from many customers who believe that if an employee can successfully create an operational report, that must mean that they can successfully perform analysis or create an analytic report. In reality, I’ve seen very few employees able to make that leap without support from a larger team and development of new skills. For organizations that truly want to move on to performing analytics and not simply continue reporting, there needs to be a focus on advancing skill sets and potentially the need to rely on a broader team within the organization. It may even require the HR department to split the reporting and analytics teams into separate departments.
I’ve often found that HR tries to manage analytics out of their HRIS, HR operations/technology or, even worse, the IT department. In roughly 75% of the organizations where I’ve seen this occur, the organization fails to create and sustain an analytics function. Why do they fail? Because the team doing analytics lacks one or more of the skill sets that I’ll discuss here, and in part two of this post.
To be successful, an analytics team needs to acquire or build key skill sets – not necessarily in one individual, but across the team. Below, I’ve examined the consulting skills needed for the team to be effective. In my next post, I’ll explore the project management and actual analysis skills needed.
1. Business Bias. Without a team member who understands the business need of the company, organizations are just doing analytics for analytics’ sake. Ideally, well-performed analysis should align to a specific goal that answers a business question or fulfills a business need. Even better, the analytic outcome might identify a business risk of which that the organization was unaware. Having a consultant on the team that is closely aligned and connected to the business is key for analytics success.
I see this is as a key skill set that the organization must build or acquire internally, and maintain full time. This is not a skill set that can be borrowed for a limited time or easily obtained from an external resource. It should be a core component of any analytics team.
2. HR Process Knowledge. When I see others identify key functions of an analytics team, I don’t see HR process knowledge identified as a key skill. Perhaps this skill is often overlooked because it is implied, but the ability for the analytics team members to understand how the HR organization works is key to the success. Often organizations will look for people with analytic skills in Finance or Marketing or other areas, but in doing so will forget about the uniqueness of HR data. Having someone with a deep knowledge of HR processes perform the analysis brings important context to the interpretation of the underlying data.
HR process knowledge is a skill set the organization can acquire externally. While it helps to know an organization’s internal HR processes, most new team members that are already familiar with HR processes generally can quickly pick up what is unique to any company. If you have a team member in HR that is looking for a new opportunity, bringing them onto an analytics team may be a smart career move for that person and help you to develop someone into a more highly-performing worker.
3. Communication. Analytics teams need someone with great communication skills and a gift for storytelling. This team member structures the analytics and makes the connections between the needs of the business and the data that is available. This role requires someone with the ability to command a room, understand the main idea and present it in a compelling way. The focus of analytics is to introduce change within the organization and this team member is a leader of change.
This kind of evangelist or storyteller can come from an external source. While this skill set requires knowledge of the business, they can rely on others on the team to bring that knowledge.
In part 2, I discuss the other skill sets that are important and needed when building an analytics team for your HR function.