We know people are a key differentiator in business. That means businesses are incredibly focused on talent. Recruiting, engaging, and retaining talent are the top issues facing organizations, according to last year’s Deloitte Global Human Capital Trends report.
In order for organizations to hire and retain the talent they need to accomplish their business goals, human resources professionals need to be in a position to educate and inform senior management about what’s taking place both with employees and in the labor market. There are two ways to “educate and inform” senior management.
Storytelling is a very powerful way to share employee stories. Senior management will want to hear about employees who go above and beyond to deliver excellent customer service. They will want to know how employees are using their benefits to further their careers.
Data are equally powerful means for telling a story about what’s taking place within the workforce. Data can tell a story about groups of employees. For example, data can tell management how the company is using employee referrals to find quality talent. It can also offer insights into why employees choose to resign.
Both storytelling and data are important, but the language of data is often preferred by many senior managers because it’s a format that’s familiar to them. They already spend lots of time looking at financial reports, so presenting HR data is a way to communicate with your audience on their level.
However, understanding data and analytics doesn’t always come easy. Harvard Business Review reported in the article “The Changing Role of the CHRO” that only one-third of organizations use analytics to make talent decisions. The same article implies that the reason so few companies are taking advantage of workforce analytics is because developing analytical skills is a challenge for HR.
The good news is today’s human resources technology can help HR professionals transform data into action. Here’s an example:
Hiring managers and HR have data and information regarding what it takes to be successful in the organization. Those factors for organizational success include traits such as communication skills, goal achievement, resilience, flexibility, and creativity. In some organizations, these might be identified as company values or competencies.
Equipped with this information, HR and managers use the knowledge they have about employees to take action. The knowledge is often found during employee performance reviews, training sessions, and onboarding programs. By bringing together these factors and the current employee information, managers and HR can take action.
What actions can they take? Well, managers can use predictive analytics to focus their efforts on high-performing and high-potential employees. Managers can also spend their time coaching and mentoring employees to ensure they remain engaged with their work and plan to stay with the company.
During this year’s Ultimate Software Connections conference, I learned about a study that showed organizations using their employee data to provide regular actions to employees have up to 50% less turnover. And less turnover means bottom-line savings. According to the Society for Human Resource Management (SHRM), the cost of turnover for a salaried employee can range from 1.5 to 3 times annual salary. For non-salaried employees, it’s $5-20K per employee.
As Peter Drucker once said, “What gets measured gets managed.” However, simply gathering the data isn’t enough. Organizations that want to see real results with their talent strategies need to look at the numbers and use them to take action.