Why do Audits and Analytics work and what does that mean for HR?

This is all about the HR data that is held within systems (even paper systems!) and is looking at the reports that you get from the data that you hold as a business. I have long been interested in using the data within HR systems and have built a number of basic HR dashboards in my corporate roles. I am a firm believer that the data that HR teams hold can be used to support business decision-making. Back in 2020, I became a certified auditor with HCM Metrics against an ISO standard specifically for reporting HR data. It is ISO 30414: 2018 Human resource management — Guidelines for internal and external human capital reporting. Within the standard, there are 11 areas and 58 metrics, and recommendations for whether the metric should be reported internally or externally. Of course, the end choice is with the decision maker in the business. Big Data has been around for a while in other areas of the business world, but HR is arriving at the party a little late. The reasons for this will be varied from lack of time or skill set to pressures managing the day-to-day. What matters is that the topic is gaining traction around the world.

The Core Areas and Metrics

The Core Areas are:

• Compliance and ethics
• Costs
• Diversity
• Leadership
• Organisational Culture
• Organisational Health, Safety and Wellbeing
• Productivity
• Recruitment, Mobility and Turnover
• Skills and Capabilities
• Succession Planning
• Workforce Availability

All of these areas will link to at least one other area so it provides a more holistic approach to reviewing data. As an example: Company A has a high sickness rate and a high turnover rate. The HR team are reporting on these but is addressing the sickness rate and the turnover rate. These two metrics could also be impacted by:

• Employee Engagement
• Workforce availability
• Skills & capability
• Costs
• Wellbeing, Health & Safety.

HR Teams, globally, have historically used reactive reporting. That is we (including me in this because I have done this in many roles) are used to reporting on items after the fact. Most HR Professionals don’t have the skill set (yet) to use analytic tools or software but by looking at the issues from all angles, and using various tools we can start to generate a bigger picture.

Where could this go?

My first thought is about workforce and budget planning. Why shouldn’t HR have a seat at this table? After all, we hold years of data about absence rates, employee turnover, and family leave. These (and more) will have a bearing on the budget and workforce planning. Using predictive analytics we can:

• Provide a statistical basis for how many women will go on maternity leave next year or for how many men will go on paternity leave
• Look at what the absence rate could be in October, November and December (the first term the kids have gone back to school and the start of flu season) allowing us to book temps more effectively
• Link employee turnover and employee engagement
• • if one is high is the other low?
  • if employee turnover has been high for the last three years then the chances are the recruitment spend has also been high so let’s budget for that and then look deeper into the root causes of turnover.

There are a lot of resources on the internet about HR/People Analytics. I follow the Academy to Innovate HR from the Netherlands and they have a great blog about different types of analytics which you can read here.