Aligning Data to Business Outcomes
In the last blog, Embracing Data for Stronger People Analytics, we talked about the breadth of data available for powering People Analytics. Here, we are going to discuss how to focus and use that data to best advantage. Just because you have data and can create metrics doesn’t mean it is the right measurement. For data and metrics to be powerful, you need to have alignment with overall business outcomes.
Back in my digital marketing tech days I often saw misalignment between objectives and metrics. For example, I worked with a sportswear company that wanted to grow market share. They ran digital ad campaigns to enhance brand awareness for Millenials, but then would optimize their campaigns to a click-thru-rate. Despite data that told us that people who clicked on ads tended to be 65+, the client insisted on having improved click-thru-rates because it was easy to measure, even though it didn’t align with the outcome they cared most about — brand awareness for a younger demographic.
The same misalignments can happen with People Analytics if the metrics we select do not truly support business outcomes. Here’s a framework I like to use:
- Define your business outcomes (WHY)
- Identify key results that you want to achieve to support these business outcomes (HOW)
- Define the supporting metrics that measure these key results (WHAT)
Too often projects start from an idea or initiative (a HOW), or from tools or dashboards loaded with metrics measuring the WHAT. It is important to ladder up and down the WHY, HOW, and WHAT to make sure that the metrics you measure truly support your business goals. Your HR team has limited resources, so you should be selective about the key results that truly matter and then pick a small handful of relevant metrics to track.
Example 1: Recruiting metrics
Time to Hire is a metric that often comes up in the context of making the recruiting and hiring process more efficient. The eventual business outcome is to reduce the cost of talent acquisition.
However, when shortening the screening process, you may succeed in reducing time to hire but as a side effect, end up with lower quality hires. To counterbalance that, you could include measurements like candidate quality (% of HiPo candidates in an entering cohort) or projected tenure to ensure employee quality is not being compromised in the process. Having these additional metrics ensures a complete picture for your business objective of reducing costs over the long run.
Example 2: Diversity and Inclusion metrics
D&I is increasingly becoming table stakes for company success. Research shows that diverse and inclusive teams and workplaces drive higher innovation, productivity, and ultimately company profitability.
An easy metric to implement is % of female new hires. However, if you are in a market that does not have a diverse pool of candidates to begin with or your company is hiring fewer new employees, using this as a diversity lever, while easily measurable, is not going to drive results that support the business outcome. Instead, focus on a key result of developing and retaining female employees and fostering inclusive culture. Building metrics around % of female managers or reduction in regrettable attrition for female employees may be a more effective way to measure investment in D&I efforts that ultimately lead to company growth.
Too often I’ve seen a lot of effort spent on debating and refining the metrics, measuring the WHAT, without revisiting whether or not those metrics really tie back to your original goals. It’s easy to get lost in the data so make sure you are taking a step back and confirming that your metrics are still aligned to your business outcomes. At Eskalera, our Employee Experience Platform is dedicated to leveraging technology to help you strengthen your culture and provide you with real-time, actionable insights to drive organizational performance and growth. Contact us today to learn how we can help with the WHAT, HOW and WHY!
Originally published at https://eskalera.com on November 21, 2019.
