We’ve come to the last 2 steps in our 8-step plan for executing your HR Analytics project. These two are all about identifying the change you want to see and implementing/measuring that change.
7) Drive Decisions, Case for Change, Targets & Change Plans
In my opinion, it's futile and pointless to embark on Step 1 of this process unless you are willing to drive a decision, and implement change.
GUT CHECK: If you don’t expect your data driven HR efforts to drive decisions and change, then seriously think about stopping now and focusing on something that the business, or your HR team, would value.
Decision making must be done in collaboration, consultation and with the support of your LoB client. It's therefore critical, that you've been engaging with your LoB clients throughout the prior steps - and have access to the facts, context and opinion.
Decision making for the Line of Business is all about Return on Investment (ROI) - which requires the development of a Case for Change. Some might call this a Pitch Deck, others a Business Case. Regardless, the Case for Change is a 10-15 slide summary and recommendation which is structured as follows:
- Executive Summary
- Background & Context
- Current Environment/Issue Identification (Facts & Context)
- The Opportunity
- Proposed Solution(s) and Targeted Outcomes
- Costs & Benefits (ROI)
- Project/Implementation Approach
- Resources Required
- Next Steps
The goal is to convince your stakeholders and impacted partners that change is needed and helps them accomplish their goals.
8) Implement Change Plans, Stabilize, Measure Success and Realize Value
For more information on how to implement and create sustainable change, please refer to Playbook 4 where we go deep on this topic.
Remarkably, “Business Case Realization” is incredibly easy to ignore - in fact, we are often systematically forced to move onto the next activity before we have captured results - and metaphorically “banked the winnings”.
You must try and avoid this pitfall at all costs:
- Remember, the only reason why you’ve been trusted to invest in data driven HR is to chase juicy business outcomes.
- You’ve sold this initiative on a business case - so you must spend some time quantifying and counting your accomplishments and success - and sharing that with those that matter.
- Simply determine the ROI of your initiative
- On one side of the ROI equation you will articulate the “New Value” you have created through this initiative.
- On the other side of the equation, articulate the Cost of the initiative (days effort in working this project can be converted to a daily internal loaded cost rate). You will use this as your denominator.
- Subtract the Cost from the New Value and call the result your “Net New Value” - use this as your numerator.
- Divide the Net New Value by Cost and multiply by 100.
- You now have your Return on Investment for this data driven HR project.
Given This Is A Largely Untapped Area – The Benefit Pools Can Be Spectacular
Here’s an example from a technology client of ours at PeopleInsight:
- The turnover of one specific Key Technical Role decreased by 25% in the first year after implementing analytics tools which gave managers deep visibility into their turnover – enabling them to segment on-the-fly.
- The VPHR directly attributed the impacts to having increased visibility.
- This resulted in a cost avoidance of approximately $750k for this year.
- The cost of investment was less than $25k.
- The Net New Value is $750k-$25k = $725k
- The ROI of this investment in data driven HR was: o ($725k divided by $25k) x 100 = 2,900%
- Yes, 2,900%
Once you’ve realized the value, you must communicate it and celebrate it. Then learn from it and build on it. Keep the momentum up with your next HR Analytics project.
While we’ve only scratched the surface of the case for change and implementing change, we’ll delve deeper into these topics in subsequent posts. If you can’t wait you can download the entire playbook – but be sure to see Playbook 4 for this particular focus.