BE IN THE KNOW BLOG
“Workforce Analytics” is Not a Numbers Game!
June 12, 2012
By Haig Nalbantian
It is an experience imprinted indelibly on my mind.
In the Fall of 2003, I was invited to come talk to the senior leader (“Mr D.”) of a newly formed “Workforce Analytics” function of one of the major European Banks. He wanted to brainstorm about the challenges of building an analytics capability in an organization such as his and learn from Mercer’s experience delivering results of workforce analytics to numerous client organizations.
Mr. D’s office was in central London and as I exited the elevator on his floor, I was impressed to see the large sign over the entry doors, designating a “Department of Workforce Analytics.” In the near decade I had been working as a leader of Mercer’s Workforce Sciences Group this was the first time I had come across a company department fully dedicated to Workforce Analytics. Finally, a major organization was taking our discipline seriously enough to commit real resources and a top executive to the task of building institutional capability in this area and not treating the role as simply an extension of IT. Finally a major organization was confronting the folly of making perhaps their single biggest investment decision without any reliable information on expected returns.
After the niceties of our introduction, Mr. D. got up from his chair and went over to his desk where he retrieved a thick binder book which he then plopped on the coffee table in front of me. I still recall the thud. “You see, Mr. Nalbantian, here is my problem. We have spent the past year building the systems and capability to amass a huge volume of data about our workforce. This binder is a result of our efforts. You will see, it is full of statistics about our workforce and our HR practices. Clearly we have made progress. A year ago, we couldn’t reliably provide headcount information. I promise you that was the case. And yet, I ask myself: what do we do with all these data? I can’t share this binder with our executive team. We need to make sense of these numbers for them, to find the story here. We have been established to provide workforce intelligence, but as of now, all we have are lots and lots of data. If we can’t do better than this, leadership will shut us down. Guaranteed! My question to you is: how do we get these data to tell a story?”
In his unforgettable way, Mr. D had crystallized the challenge of Workforce Analytics; he had raised the essential question concerning what our discipline is really about.
What my own experience working in this area has made clear to me is that “Workforce Analytics” is surely not about data. It is not about the new technologies that improve our access to data and the speed with which we assemble our “facts.” It is not even about the statistical methods used to detect relationships among data points.
Rather, “Workforce Analytics” is about the lens we use to examine the workforce and performance data that are proliferating around us, the lens that helps us understand what to look for in those data, what relationships to test and how to interpret results of empirical analysis. It is about a new, empirically-driven discipline that integrates the vast learning from fields such as Labor/Organizational Economics and Organizational Psychology to provide models of behavior and organization that can be used to make sense of empirical patterns observed. Without those models against which data can be compared, there is little basis to tell a coherent story that can resonate with leaders and compel action.
“Workforce Analytics,” in sum, is the engine of the new science of human capital management that permits us to measure and understand the business impact of the investments organizations make in people.
Experts can differ on what is the best lens to use for data analysis, which ones are best able to reveal the story in the data we analyze. For almost 20 years, my colleagues and I at Mercer have used the “Internal Labor Market” lens that examines talent flows and associated rewards as identifiable parameters of a unique kind of labor market that organizations can actually shape to deliver and manage a workforce tailored to their business needs. [To learn more about this approach, see our book, Play to Your Strengths, McGraw Hill (2004)]. We help clients find their stories quite easily through this lens. Surely, there is no monopoly on lenses. Others have different lenses that serve this function as well. My point, quite simply, is that it is the lens that makes all the difference in the world.
Without a well designed lens, grounded in rigorous research and refined through experience, workforce data remain just that: data. And Workforce Analytics groups that simply deliver data will serve, at best, as a reporting function, providing little or no strategic value to the organization. There is little future in that role – at least not as an independent entity - something Mr. D. and his (now former) group, regrettably, learned.