Steps for selecting the right people analytics tool

28 July 2020 Consultancy.eu

As leaders seek to gain deeper insights into the developments and sentiment within their workforce, the demand for HR analytics is booming. Using the right IT system is essential to getting the most from outfits examining workforce effectiveness – and experts from Quintop Management Consultants have provided four steps to help select the right tool for the job.

Step 1: Understand the business and ask the right questions

According to Quintop’s experts, the most common mistake with choosing any tool within an organisation is looking at technology in isolation. It is important to keep in mind that the end goal of using a people analytics tool is to drive decision making that contributes to achieving organisational goals. It is therefore an important first step to understand the business and its unique needs, before diving into the implementation of a new analytics scheme which might be ill-suited to an organisation’s actual requirements.

Focusing on questions which relate to the performance of their HR needs before adopting a new tool will help to ground its implementation in an air-tight business case. For example, if organisations are focused on issues such as their turnover, whether they offer equal pay, how quickly they hope to fill vacancies, they might want to pay attention to tools which are specialised in providing insights into workforce data throughout the whole employee life-cycle.

At the same time, if a company is concerned more with the return on investment of sales training, or profiling its most productive team leaders, an organisation would do well to focus on analytics programmes linking different data sources, both people and non-people related data, and provide answers to these types of questions.

Steps for selecting the right people analytics tool

Step 2: Know your data and IT landscape

Quintop’s second piece of advice for companies is to create a clear overview of their IT landscapes, as well as the stored data they will rely on for insights in some important topics. This could save time, as some organisations might be able to leverage analytics tools already implemented and used by other parts of the organisation.

At the same time, this holistic approach to a business’ IT systems could enable cross functional analyses from multiple sources, meaning that for example HR data and finance or sales data could be used to answer questions relating to employee engagement and sales results.

However, when sharing tools, it is important to have a clear authorisation governance to protect the data privacy of employees. Some organisations have strict IT policies that can heavily impact the choices available to different departments. However, relying on previously gathered data from beyond the remit of the department’s mandate can be a risk, as it may be unable to guarantee its accuracy. Ensuring data quality is paramount to successful analytic regimes.

To this end, organisations should always consider whether their new tools need to be able to support them with data quality improvements. Some tools contain business rules that flag data inconsistencies and also help to track data completeness. If this is one of the goals, organisations will need to make sure the tool they select possesses this functionally.

Step 3: Know your users and consumers

Further relating to the quality control of data to be processed by HR analytics, Quintop advises that firms should identify who will initially analyse and process data, and who their consumers actually are throughout the organisation. Users should be differentiated from consumers, since they both have different needs and expectations for using data – and the system of delivery for analytics from one to the other may impact which analytics tool is most suitable.

A firm might think it is best to have employees working in IT who perform the actual data analyses with a counterpart within HR who communicates insights to the business – meanwhile a firm could also have a dedicated people analytics Centre of Expertise who processes and analyses the data, and shares outcomes with stakeholders. Lastly, the firm could even have the end user, like a HR or business manager, directly analyse the data from the tool themselves – ensuring a stringent string of quality control before HR analytics are consumed.

In the first two examples, an organisation might need to choose a more technical tool, while the last example asks for a more user-friendly tool that can be understood by anyone.

Step 4: Think about time and budget

Finally, for the fourth step recommended by Quintop, organisations should dive into the aspects of time and budget. The crucial question is when does a firm need to go live with its people analytics tool – and answering this question will give a crucial insight into the time available for building and implementing a specific tool, collecting the first data, testing outcomes and training users.

For instance, tools with a plug-and-play characteristic are easy to implement – but they will not always allow users to take complete control of the analytics, as analyses are already structured and fixed by the vendors of those tools. This means that if there is more time to create a HR analytics set-up, some firms might prefer to start from scratch. Those with less time to work in will likely do best to plump for a plug-and-play though.

Next to this, companies should be aware of the costs associated to the implementation, maintenance and use of their data tool. Organisations need to be aware if their budget has room for costs of additional features, storage or the hiring of external expertise for its implementation. Companies will need to consider whether to invest either the major part of their budget during the implementation phase by selecting a plug-and-play option, or spending it gradually by investing in their own labour and giving up their own time for a self-service solution.