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
Organisational Health, Safety and Wellbeing
Recruitment, Mobility and Turnover
Skills and Capabilities
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:
Skills & capability
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.
But what about an Audit against ISO 30414?
I have two roles. The first is as an HR Consultant who supports your business by looking at the data and starting/improving on the HR reports that you already have. This is mutually exclusive with the other role of an Auditor. In this role, I will work with an organisation around the data that they have and whether it fits in with the HR ISO standards (there are a few and more are being developed). Importantly, I want to answer the question of what will this change for your organisation. I am not an expert in tools like R, Power BI or Tableau to name a few but there will be analytics or IT professionals who will be. I help with the questioning of the data and what you want to do with it now and in the future.
The second is an Auditor for the ISO 30414 standard. The Auditor can’t audit their own clients (it’s like marking your own homework!). What the Auditor does is look at the information provided when business requests to be audited against the ISO 30414 standard via HCM Metrics. Here the auditor will be looking at some policy documents but more about if they support the metrics contained within the standard. So is there a grievance policy and how many grievances have been raised in line with that document? Over the 58 metrics, there are some fabulously simple ones like grievances, the number of accidents and what is the gender split in the organisation. But there are others that are more complex and the data may not be in the HR System like profit or EBIT per employee, Total workforce costs (this includes agency temps and subcontractors).
The benefits of gaining this certification are:
Using evidence-based HR to support and make business decisions
Greater employee morale by using the data and sharing it with team members
Improved record keeping
Being able to benchmark on a global scale
Establishing clear financial and non-financial returns and understanding
HCM Metrics has put together a document with 99 reasons to become accredited against ISO 30414 which is separated by each of the areas within the standard. It is available here for you to download.