I’m on my way to the HR Technology show in Chicago, and I’m doing a little reading on the plane. This new Gartner report called "Exploit the Next Generation of Workforce Analytics to Manage Human Capital" from Jim Holincheck on workforce analytics is intense, but inspiring. The gist of it goes like this: valuing investments in human capital has always been a difficult challenge (and will continue to be). Most companies don’t even try to measure it. But executives increasingly need a way to value human capital in the context of their businesses. Next generation workforce performance analytics will enable HR data to be juxtaposed with business data to help managers make better decisions.
What this means is that things like employee engagement and core competencies – things we FEEL are important – can be directly correlated to business results so that we can PROVE they are important. For instance, better engagement might mean more profit, lower turnover and better customer service. How cool would it be to be able to measure these things and show a direct, causal relationship? How cool would it be to know exactly which strings to pull to achieve a particular business outcome (e.g. more sales means more training and better customer service means more pay and not the other way around)? This is the promise of workforce analytics.
The report goes on to discuss the path to this holy grail, and the layman’s interpretation is that it won’t be easy. Choosing the vendor, technologies and processes that are appropriate for your business is part of the battle. Another part is bringing the right skills (such as quantitative analysis techniques) into your HR team, via hiring or training.
There is a sort of underlying carrot and stick challenge to this report. The stick is that HR simply must become more sophisticated in its approaches in order to keep up with the needs of the businesses they serve. Absolutely must or huge opportunities will be lost and certain HR people will be “lost†as well. The carrot is that if they can, they will be able to add more value to their organizations than ever before.
