Canadian HR Reporter

CANADIAN HR REPORTER June 15, 2015 16 FEATURES HR METRICS Big data: Are we measuring the right things? There can be real benefi ts to such analysis, but only if it's done correctly By Mark Bania B ig data. Two small words with huge implications. But is this really the business differentiator it is hyped up to be? Or is it just more meaningless industry jargon? e answer depends on how you use it. When applied correctly, big data can lead to better conversion rates, faster production and a big- ger bottom line. Companies that implement data-driven decision-making are five to six per cent more productive than companies that don't, according to 2014 research from the MIT Center for Digital Business. HR benefi ts e benefi ts of using big data in the human resources func- tion are also signifi cant. Human resource managers can use big data tools to hone their recruit- ment process, avoid costly skill mismatches and more eff ectively retain top talent. One in six Canadian employers "always" or "usually" use analytics as part of the recruitment strat- egy, according to a 2014 survey of more than 400 Canadian hir- ing and HR managers released by CareerBuilder.ca. Of these employers: •70 per cent said it lowers the cost per hire. •66 per cent said it lowers time to hire. •49 per cent said it helps them hire more candidates for specialized fi elds. But these benefi ts only scratch the surface of big data's potential. HR leaders have a lot of data at their fi ngertips. In addition to internal data gained from pre-employment assessments, employee engage- ment surveys and applicant track- ing systems, there are a variety of tools available that leverage gov- ernment and online recruitment data. These tools crunch millions of data points — resumés, job postings, labour force surveys — enabling human resources to lo- cate the areas where the greatest supply of qualifi ed talent is most concentrated, fi nd out the going salary rates and see which orga- nizations are competing for the same candidates. e overwhelming supply of data available is both a blessing and a curse for HR managers. While data can unlock the keys to proper workforce planning, eff ective employee engagement and a strategic recruiting strategy, knowing where to start is a battle in and of itself. The mere idea of mining all of this information can be over- whelming. The good news? It doesn't have to be complicated. Overcoming obstacles One of the biggest misconcep- tions about working with big data is the idea you have to work with every data point available. Not only is this overwhelming and virtually impossible, given cost and time constraints, it is also unnecessary. Here are some steps to navigate the vast amount of HR data avail- able to you. Know the diff erence between data and metrics: A metric con- tains a single type of data, such as the number of applications or employees. Not all data matters, which means not all metrics mat- ter in terms of a particular organi- zation and its specifi c needs and goals. Work with the right data: If you are working with unreliable or irrelevant data, the results will be inaccurate and your re- sulting approach to reach those goals or solve challenges will be misguided. Defi ne goals: e goals will tell you which metrics, or data sets, to look at. Once you have deter- mined which metrics to focus on, you can measure the impact of your eff ort to reach those goals and adjust accordingly. Focus only on the metrics that matter: Collecting data and calcu- lating metrics is time-consuming and expensive, so focus only on the metrics that matter for your business goals. ( is is why having clearly defi ned goals is key.) Below are some common HR goals and the metrics to track in order to evaluate the elements within these goals. Enhance workforce produc- tivity: To measure the current level of workforce productivity, look at the costs associated with wages, benefi ts and other HR ex- penses, and compare that to over- all company revenue. Boost employee engagement: If the goal is to improve employee engagement, the scores from em- ployee satisfaction surveys can help you assess where you are now. Other metrics to consider include money spent on recog- nition, training opportunities versus the number of employees who take advantage of them, and employee performance levels. Increase retention rates: Look at both overall turnover and turn- over in specific job functions, across departments and under specifi c managers. Improve recruiting eff ective- ness: To assess the current level of recruiting eff ectiveness, start with the sources of hire. Consider how many of those applications convert to interviews, how many of those interviews convert to hires, and the average tenure of those hires. Here's where you also want to take advantage of those tools that leverage government and online recruitment data (mentioned above) in order to get a sense of where the supply of available and qualifi ed talent with the skills you need is most concentrated. ese metrics will help set a benchmark against which you can measure the results of any changes or adjustments made as a result of the fi ndings. Adjust accordingly Once you know where you are, you can adjust your eff orts ac- cordingly. For example, if the goal is to fi nd more qualifi ed appli- cants for hard-to-fi ll positions, by looking at the supply and demand of talent in a specifi c area, you may decide to reallocate recruit- ment marketing eff orts or off er relocation compensation or more competitive pay to lure these can- didates — or perhaps even adjust the role requirements. After these adjustments have been made, go back in a few months and measure again... and then again. Constant measurement is cru- cial to this process. It will help you understand where you are making progress and where there is room for improvement. Remember, the key to work- ing with big data — and making it work for you — is knowing which data sets to work with, and that starts with knowing your goals. Only once you've identifi ed the right data can you begin to mine it to solve a specific problem, overcome a particular challenge or meet a targeted goal. Mark Bania is managing director of CareerBuilder Canada in Toronto. For more information, visit www. careerbuilder.ca. Credit: Rawpixel (Shutterstock) How are companies using big data? Most companies — about 60 per cent, according to a study by Bersin by Deloitte — have already invested in big data and associated analytics tools. But are they getting value from that investment? Only four per cent of companies were able to perform predictive analytics about their workforce, found the 2013 American study of 480 large organizations. And just 14 per cent reported they had done any signifi cant statistical analysis of employee data. But there are big advantages to using big data effectively: Those companies that ranked as leaders in terms of big data usage saw stock market returns that were 30 per cent higher than the S&P 500, found Bersin by Deloitte, and their leadership pipelines were estimated to be 2.5 times healthier. And there's good news for HR: Those leading big data companies had HR teams that were four times more likely to be respected by their business colleagues for assisting with data-driven business decisions.

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