As with any sophisticated human resources (HR) analytics initiative, alignment with the business and a focus on data quality are critical to ensuring success, and HR dashboards can provide the needed support, industry watchers say.
Historically, analytics has been more of a reporting function in HR, and line-of-business owners and HR execs were highly dependent on IT to create the reports and data models because they lacked accessible tools. The advent of new dashboard capabilities, in-memory databases and advanced analytics is changing that requirement, allowing HR professionals and business leaders to easily pull together HR dashboards that display metrics and key performance indicators (KPIs) pertinent to their interests.
“Typically IT had access to the data model and data warehouse and would have to create these things -- HR wasn't equipped to do it themselves,” explained Kouros Behzad, director of solution management for line-of-business HR at SAP. “What we’re focusing on now is providing the content and metrics to get professionals what they need without all that much focus on the tools.”
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As an example, Behzad points to SAP’s planned third-quarter 2012 release of SAP BusinessObjects Executive HR Reporting, an HR analytics application that will deliver 50 to 60 predefined HR metrics out of the box, allowing top executives to configure HR dashboards with HR metrics they want to monitor, including turnover, costs, training and absenteeism.
Two types of HR dashboards
Depending on the prospective audience, HR dashboards fall into two buckets. Strategic dashboards depict high-level HR KPIs, such as employee turnover. Transactional dashboards provide visibility into the lowest level of detail -- for example, how many employees over the age of 50 are selecting a particular benefits plan.
Both types of HR dashboards can shine a spotlight on areas where specific actions can have an effect. For example, the turnover KPI could reveal that 40% of those who left say they are not making enough money, which might precipitate a re-examination of salary levels. Or a specific demographic’s choice of health care coverage could guide decision making on what plan to go with.
“There’s a big debate on whether analytics are considered strategic or transactional, and it doesn't really matter,” said Danielle Larocca, director of North American operations for SpinifexIT, an Atlanta-based software provider that offers add-on modules for SAP HR. “Analytics need to look at the big picture and drive business decisions.”
Know where the HR data is
Even with the more accessible self-service technology, there are a number of factors to consider before getting started. Of top priority is identifying the types of HR data required for the analytics as well as where the data might reside, whether it’s in SAP HR or another enterprise system.
“There is a great deal of historical data captured within any SAP system, but the stumper can be, ‘Is all the data inside SAP, or do we need to pull in data from other systems as well so we can put the data into context?” said Lois Melbourne, CEO of Aquire in Irving, Texas, which makes workforce analytics tools.
Sometimes the requisite source data is stored in the SAP HR system as part of employee records or applicant tracking systems, but often it resides in external systems, such as performance management or talent management platforms, Melbourne said. As a result, she said the key to building successful HR dashboards is to properly identify the data, including where it resides, so you can address a proper integration strategy.
Another key requirement to any dashboard’s success is HR data quality.
“It may be a duh, but it’s really important to pay attention to,” Melbourne said, adding that business users have to trust the data to use it in their decision making. “If you are creating decision support information, then that data needs to be tested and clean. Just like any data warehouse effort, data cleansing is often a separate exercise prior to widespread distribution of the dashboard.”
Know the HR dashboard user
Making sure HR dashboards are simple, highly visual and specific to an individual’s role can also promote widespread acceptance and use. A sales leader may need to see his group’s retention data stacked up against another sales area for competitive reasons, but that same dashboard may not be applicable to someone in HR. “It’s important to look at the role of the user and what information they need,” Melbourne explained. “They might need different dashboards because their goals are different. One might be looking at hiring, while someone else is more concerned with cutting costs.”
Finally, just because HR departments now have the tools to easily create their own dashboards and execute HR analytics, it doesn’t mean they should do so in a vacuum without input from line of business.
“HR can’t do this themselves -- they don't have enough visibility into all the different lines of business in terms of what the goals might be,” said Claire Schooley, senior industry analyst at Forrester Research Inc. in Cambridge, Mass. “They really need to be strategic partners with line of business to formulate the need-to-know questions and help make business decisions based on effective analysis.”
This was first published in June 2012