Getting Started in Human Capital Analytics

Last week I attended the NCHRA (Northern California HR Association) HR Metrics and Analytics conference in Santa Clara, California.  There was a turnout of over 60 Bay Area HR professionals representing a number of diverse organizations.

Based on the dialog at the conference, I realized that although there is a broad and deep interest in workforce planning and analytics, many HR professionals are still trying to figure out how to get into the game.

We are witnessing a renaissance in workforce planning and a new surge in analytics. This is indicated by a number of tell-tale signs. My good friend, Allan Brown, Director of Compensation and Analytics at Marvell Semiconductor, and I presented a session entitled “From Historical Analytics to Predictive Analytics.”

Our presentation included the following slide.

I enjoyed the NCHRA conference and was encouraged by the participants’ enthusiasm and engagement. I jotted down a few observations on the plane home.

What are your thoughts on the following seven observations from my California trip?

1. The interest in human capital analytics is gaining tremendous momentum. It’s hard to believe that the word “analytics” was only put into play a few years ago when it became a buzzword in the management literature. It wasn’t long before analytics were being applied to human capital issues. A new sub-function within HR is being created and many large firms have set up internal human capital analytics capabilities. Distinct human capital analyst roles are emerging and it is very difficult to fill them, especially at the middle and senior levels due to the need for both HR experience and technical proficiency.

2. The interest is broad and deep. Attendance at the conference was broad in terms of industries and management level.  There was a healthy representation of hardware and software companies, but also government agencies and educational institutions.  There was a diverse range of positions as well, ranging all the way up to VPs of HR.  From what I’m told by friends, colleagues and competitors, this variety is not unusual. Unless attendance or membership is restricted to leadership roles, all levels of the company are attracted to such events.

3. People and companies are in a tearing hurry to get started with human capital analytics. Many of the presentations dealt with broad themes and perspectives.  And while the audience appreciated the contextual background and big picture landscape, there was a palpable urgency to the audience’s questions and concerns. When asked by a speaker why they were attending the conference, a number of participants stated that they were looking for actual analytical models that they could apply to their situation. One participant came up to us after our presentation and enquired whether we could share a spreadsheet template of a turnover model we had described since she wanted to show some analytical outputs to her management right away.

4. HR professionals trained in compensation, industrial/organizational (I-O) psychology or other quantitative fields have a competitive advantage in human capital analytics. When discussing a statistical model involving logistic regression that analyzed gender bias in equity grants, a participant asked where one could find the required “technical” talent.  There are plenty of people trained in statistics, but few of them have the background necessary for the happy coincidence of technical expertise and experiential insight.  We have discussed in a previous post how compensation professionals have a competitive advantage in practicing human capital analytics. Another participant and independent consultant, Bonnie Pollack, suggested we not forget those HR professionals trained in industrial/organizational psychology (I-O psychology), many of whom have the requisite statistical and research methodology training. You can learn more about these professionals through the Society for Industrial and Organizational Psychology.

5. There is a scarcity of good training opportunities. While there are many conferences on human capital analytics, there is a gap when it comes to training in human capital analytics. One of the reasons is that you just can’t get away from having to do some statistics, which is not an attractive proposition on the demand and supply sides of the equation. The other is that much of the human capital analytical work done within companies is very targeted and does not lend itself to generalization. One cannot ignore that companies have a competitive interest in not divulging analytical experiences and methodologies.  Some training material has emerged, but it is typically focused on HR metrics or getting comfortable with data.

6. There is a need for an in-depth handbook of human capital analytics. I reviewed the extant HR Analytics Handbook in a previous post. As I said in the review, it is a timely publication that provides a quick and concise summary of the current state of affairs. However, it does not go into enough detail. What’s needed is a “how-to” guide that describes the actual models and how to build them from scratch. It’s delightful to read about all the great results companies have achieved through human capital analytics, but how about the details on what exactly they did?

7. Workforce planning is not a new concept; it has just been re-invented to fit the new world of “talent management. While doing some research recently, I pulled out an old book from the 1990’s (with an ancient Amazon receipt in it!) published by the HR Planning Society (now known as HR People & Strategy). It covered workforce planning in great detail, presenting many alternative mathematical approaches, some of which had been used for decades. It was all there – Leontief input-output analysis from the early 1900’s, Markov analysis from the mid-1900’s, etc. For some reason the mathematical approach to workforce planning went into hibernation for a couple of decades as HR’s focus shifted to talent management.

What is Nelson Touch Consulting doing in response to the above?

We have already developed a human capital analytics curriculum that has been tested with HR practitioners. It is targeted at HR professionals requires no background in statistics (though the curriculum does not shy away from it). The course is ideally delivered over 2 days at an in-person seminar format session.

We will be delivering a 3 hour pre-conference workshop on Strategy, Planning and Analytics at The Talent Management Academy’s Workforce Planning conference in Boston June 13-16, 2011. The course introduces each of the three elements, explains how they inter-relate and provides concrete examples of how to go about achieving your HR strategy through planning and analytics.

I have received positive feedback from publishers on an outline for a book that will introduce human capital analytics to HR professionals. The working title is “Getting Started with Human Capital Analytics – A Guide for Human Resources Professionals.” The intent is to cover the entire employee life-cycle through human capital analytic models – e.g., staffing, development, rewards, turnover, etc. Readers will be gently introduced to the required math and provided model templates to populate with their own company data. Publication is expected in 2012.

Stay tuned to this blog and our Twitter account, @TheNelsonTouch for updates.

About thenelsontouch

Amit is the founder and managing director of Nelson Touch Consulting, a management consultancy that specializes in maximizing the return on human capital through strategy, incentives and analytics.
This entry was posted in Analytics, Compensation, Statistics, Workforce Planning and tagged , , , , . Bookmark the permalink.

2 Responses to Getting Started in Human Capital Analytics

  1. Pingback: Career Opportunity: VPHR/CHRO position in Washington, DC « Executive Leadership, LLC – Career Opportunities

  2. Malica Jibowu says:

    Great article… and I’m definitely looking forward to reading the book. I think such a work of literature is long overdue and will greatly benefit HR professionals in taking their first tangible steps towards practicing HC Analytics. Can’t wait to read it!!

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