Mastering HR analytics with technology

Accountability is now a critical issue for all HR directors, and providing detailed analysis to back up plans and programs is essential. Angus Kidman looks at how technology can help HR to produce better workforce analytics and how HR professionals can get the rest of the business on board

One clear incentive for improving workforce analytics is to drive business growth. “We are a double-digit growth company, and the competitive landscape is a lot tighter than it has been in the past,” says Michelle Thomson, Asia-Pacific vice president for human resources at financial services giant American Express. “The biggest challenge for us is enabling our workforce and driving business success through our people. As an HR function, one of our key measures is how we drive success by driving value.”

Measurement has become central to American Express’ HR activities, which stretch across 83 countries throughout the world. In Australia, the company has around 3,000 employees spread over 85 sites.

“Everything that we touch has a metric attached,”Thomson says. “Whatever we do we use globally consistent processes, measurements and databases. We do things in a methodical, thought out, consistent manner, and we have consistent platforms.”

However, Thomson acknowledges that it hasn’t always been this way. Building a consistent platform began in 1999, when the company began a global rollout of PeopleSoft as its core HR system. At the time, even PeopleSoft itself hadn’t done a single rollout for global operations. “It was a huge challenge.”The final system used a PeopleSoft backend and a user interface developed by Mellon HR Services. “Some of the things we needed PeopleSoft couldn’t do,” says Thomson, who served on the global committee supervising the rollout.

“Like any investment, a business case had to be built and the return on investment had to be set,” she adds. Indeed, the project had to go before American Express’ global investment committee a couple of times before being approved. “It was about building the case in terms of business financial measures.”

A key goal from the rollout was to improve data quality. “If you’re doing analytics, you need data. What’s important for us is that we’ve got consistency in data.”

Another critical step in maintaining data quality is to shift responsibility for maintaining key information from the HR department to business divisions. “The data’s owned by the business – HR doesn’t own it,”Thomson says. “And the business is accountable for the data.”

To make that task easier, American Express enthusiastically embraced online service delivery. “We moved the firm from a transaction-based environment to a self-service model. We web-enabled just about everything we do. A lot of the things we did ten years ago we don’t do today.”

As a result, the HR department is now confident that quality data on key measures is available, and is involved in business planning for all new initiatives.

What advice would Thomson offer to other HR practitioners seeking to improve analytics? “The critical piece is making sure that you deliver a successful and appropriate business outcome. If you can’t deliver value for employees, shareholders and customers, don’t do it.”

Thomson also cautions against being overwhelmed by the potential of technology. “Your technology infrastructure is the means to an end, it’s not the end game. Don’t expect that you have to be the expert in technology. Use the people, internally or externally, to enable you to make the right decision.”

Consistency is key at Honeywell

Achieving consistency across a globally diverse company has also been a key challenge for Honeywell, which operates a variety of businesses in the automation and construction field. Within the Asia-Pacific region, the company has more than 12,000 employees.

“Our most recent initiative has been aligning our resources with our technologies and systems to maximise the HR functional impact we have in both our front-office and back-office operations,” says Richard Wong, vice president of human resources for Honeywell Asia Pacific. “It’s essential that we provide the right mix and balance of both HR specialists and generalists to effectively partner with our businesses and establish the right service levels to drive internal customer satisfaction.”

“The overriding objective is to assist the business in achieving a small-company customer focus in each industry, while leveraging a big company’s advantages,” says Jodette Cleary, human resources leader for Honeywell Building Solutions Asia Pacific, which has 1,600 employees across the region. “Our aim is to leverage best practice HR technology, in order to align HR with the overall business strategy. This gives us extensive data for analysis, allowing us to address key issues.”

“We have Asia Pacific leadership teams, all with a common Asia Pacific goal, who focus heavily on linking our overlying strategic plan to every employee’s individual goals and objectives,” Cleary says. “These goals and objectives are reviewed by managers on our global performance and development system, Honeywell Performance & Development (HPD).”

“Another issue we have focused on is having both quality data and quantity data.” A critical step in that process has been standardising how data is used and understood within the company’s PeopleSoft system, and developing suitable analytics for all key areas. “There’s no reason to have different performance reviews or management systems or definitions for headcount in each divisions.”

The process of data consolidation is ongoing. “We’ll never achieve absolute data integrity without integrating PeopleSoft and payroll across the region,”says Cleary, and that task is now being undertaken. “Technology is where we’re getting that common platform that enables cross-fertilisation.”

Of course, to justify technology investment, a business case was critical. “The investment in these systems was justified on the basis of allowing the business access to detailed data thus enabling close analysis of root causes and major trends, and implement initiatives accordingly.”

Providing detailed analysis is also essential for convincing employees of the value of particular projects. “Because we are a technical company, the majority of our employees are engineers, and they’re very analytical. HR needs to establish credibility by having data integrity.”

That message is critical for any HR department, Cleary believes. “Invest the time to automate processes to ensure the accuracy the quantity and quality of the data on systems, and show staff how to use them.”

Without that kind of approach, HR will lose its standing within the business. “You can be an HR legend day to day and give great advice, but if all the data is wrong when you do a salary review, questions will be asked.”

Starbucks: Making people (and coffee) count

Justifying an investment in analytic technology wasn’t too difficult a task for coffee house chain Starbucks. “We’re a very people-centred company,” says Tony George, senior vice president of partner resources for Starbucks Coffee International. “In our business, people are the single most important component of our success, so it’s a priority for the business. It’s almost a given for this company.”

Managing Starbucks’ HR operations (the company prefers ‘partner resources’) is certainly a major challenge. The international division has more than 2,500 stores spread across 35 countries, and between 35,000 and 40,000 employees (the exact numbers are hard to calculate because of partnering arrangements in different countries). Australia alone has 48 stores and 750 employees. In total, Starbucks has 9,000 stores and more than 100,000 employees.

Ensuring those employees match with Starbucks’six core goals – creating a great work environment, embracing diversity, building strong relationships with customers, contributing to the community, pursuing excellence in coffee and ensuring profitability – is the main driver for HR.

“We sell coffee, and that’s at the heart of what we do,” George says. “But we also give customers an experience. That connection is very important to us. It’s so important to us to find people in all of those different countries in the world who are aligned completely with what we believe in. Our ongoing challenge is finding people who genuinely, in their toes, believe in our values and have relevant skills.”

Dealing with growth is also critical, as the company has tripled in size in the last three years. “Business metrics give us a good understanding of where the growth will be,” George says. Indeed, many of the key metrics the partner resources division tracks are business-centric rather than classic HR measures. “Our systems and technology support need to be first class.”

Given Starbucks’ retail focus, traditional measures such as staff churn are important. “In retail, typically turnover rates are very high,” George says. “We’re well below the retail average, and less than half of it in many locations.” That data is largely tracked through the company’s core SAP systems, though those aren’t all-encompassing. “There are some measures which we still have to do using tools like spreadsheets.”

Other key measures include stability of store manager appointments. Starbucks conducts regular partner engagement and satisfaction surveys online to track sentiment in the workplace. “It’s startling to see the level of engagement that our partners have,”George says.

So would Starbucks like to see further technology integration? “In an ideal world, it can happen. It depends how far you want to take it,” George says, pointing out that tasks such as payroll and tax integration are particularly tricky across borders and that these must deliver measurable value.

Measuring that value is central to any HR analytics deployment, George believes. “The first thing is really interrogating and analysing the key drivers for each part of the business. Clarify your own HR strategy to make sure it’s aligned with those business drivers. Activities that are redundant should be eliminated. And then deliver, deliver, deliver.”