This comprehensive Point of View has been developed to help those considering any Do-It-Yourself People Analytics project and to understand the nuts-and-bolts required when embarking down this path.
John Pensom, CEO and Co-Founder of PeopleInsight, shares deep knowledge of the cost, resource requirements, risk, time to implement, and complexity of taking the DIY People Analytics pathway, his overall perspective on people analytics, and the options available to you.
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These poignant last lines from the epic song by The Who - Won’t Get Fooled Again - stand as a reminder that sometimes, as change happens, nothing actually changes.
Perhaps, 50 years later, the same can be said for HR Reporting and People Analytics. This time, somewhat old technology concepts are being regurgitated with fresh marketing campaigns and "new" product launches.
<Heard Everywhere> It’s Been 2 Years & We Still Don’t Have the Reporting & Analytics We Need
Over the last several years, thousands of organizations have implemented the likes of Workday, UKG/UltiPro, SuccessFactors, Dayforce and ADP Workforce Now (amongst many others), yet they still have many of the same long standing problems when it comes to HR reporting and people analytics.
At PeopleInsight, our customers run all of these systems - yet they are all looking for something quite different than what these systems can provide in their native reporting, dashboards and inaccurately self-labelled People Analytics.
We typically hear a combination of these three scenarios:
- I need a single view of the truth. I’m still running other HR Technologies and I’d like to combine that data with my HCM data into a single, integrated data warehouse
- I need more flexibility in my reporting and analytics solution than Workday can technically or affordably deliver
- I’ve tried to build an internal capability for People Analytics and sputtered for one reason or another
While you may feel as if you are facing these issues alone - it’s certainly not the case. There are many others out there who feel the same.
These companies are now 2-3 years into Workday and the like - and while they are maturing from a data quality and transactional processing perspective, they still don’t have the operational & strategic people insight that they need.
PeopleInsight, the People Analytics Pureplay, is built to integrate all your disparate HR & Talent data, and deliver end-to-end reporting and analytics through the cloud.
Not only is PeopleInsight’s technology platform developed exclusively for people analytics, but the subscription always includes a fully managed service (covering all aspects of ongoing development and operations) where PeopleInsight experts literally become an extension of your team. For a fraction of the cost, time and risk of a Do It Yourself approach, you can consider PeopleInsight as your People Analytics Technology Platform and Center of Excellence.
Why You Implemented Your New HR Tech
When you decided to buy and implement your new HR tech, there were likely multiple drivers:
- Pain with your old HRIS or segregated HR Tech landscape
- Drive for a single, unified platform with cross HR processing and Talent management capability
- The advantages, relative affordability, and low maintenance promise of a cloud-based HCM
In addition to these pain points, there was probably some excitement for the prospect of improved reporting and analytics out of the box.
That’s likely turned out to be kind-of, partially true.
While the native capabilities for reporting, “analytics” and data visualization in your HR Tech may have helped you significantly, critical challenges likely still remain.
- You still run separate systems for your HR, people and talent operations
- You are combining your HRIS data with other people data using spreadsheets
- You are performing additional reporting and analytics in a BI tool outside of your HRIS
- Your reporting is manual and/or inflexible
- You don’t like the daily rates of Reporting Configurators or BI Developers
- You don’t have an internal IT or BI team to rely upon
- You have unsuccessfully tried to hire a People Analytics “expert”
- You have report writing as one of many tasks for your HR Analyst
- You are in the position where you still don’t have true analytics from both your HRIS and other HR systems.
- Your HR and talent insight is still limited.
HRIS Analyst Cost and Availability
For specialized HRIS Analyst resources – especially in the premium zones like Workday, UKG/UltiPro and SuccessFactors, the cost has gradually increased while availability has become more scarce.
But that’s only the start - there are other problems:
- The HRIS Analyst-type resource tends to be underwhelming in the HR reporting and business intelligence tasks of their jobs. They tend to have deeper skills, focus and interest in systems administration, configuration and development of business processes, not data, reporting and analytics. And certainly not in HR-specific data warehousing (a whole different beast given the effective dated nature of HR transactions), ETL, HR metrics, algorithm development, visualizations and insightful analytical use cases for People Ops. You get the picture - they are great at running Workday or UKG/UltiPro, but struggle when it comes to delivering the reporting and analytics you really want and need.
- The increasing cost of a HRIS Analyst, the tight labor market for this role and the mercenary movement of qualified candidates with hot-product skills
- The necessary and cyclical focus and investment in Upgrades
- The total cost of maintaining and operating your HRIS likely means there’s very little budget (if anything) left over for more
So it’s time to face a few facts:
- HRIS Analysts (Junior or Senior) aren’t built for your HR Reporting and People Analytics needs.
- The Total Cost of Ownership of Workday is significant.
We’ll come back to this in more detail later.
What is People Analytics? Telling Apples from Oranges
While the definition of People Analytics varies somewhat based on who you speak with, it tends to be quite consistent and can be applied to both basic people analytics capabilities (like excel-based VLOOKUPS and PivotTables) and advanced capabilities like those found in an enterprise data warehouse based solution.
The fundamentals are:
- Multiple sources of HR/People/Talent/Productivity data
- Unification of these disparate sources of data into one single repository designed for storage and manipulation of your HR data with a focus on data discovery and analysis, not transactional processing
- Algorithms using mathematics and statistics calculating HR metrics and relevant analytic use cases
- Presentation, reporting, outputs and/or visualization of your data, based on the analysis and discovery criteria which a user sets
These components must work in concert together and if your survey, talent or HCM solution isn’t employing a data warehouse for your reporting and data analysis, then it isn’t a people analytics solution.
Why is Data Warehousing for HR & People Analytics Complex & Elusive
In my opinion, there are two aspects which make data warehousing of HR data, and therefore, people analytics remarkably complex and elusive.
1. HRIS systems store transactions much differently than what is needed for reporting
Transactional systems have databases which are built to store and retrieve a transaction in the most efficient way possible - not to aggregate data for reporting. If someone was adding a bunch of transactions to an HRIS (e.g., bringing on summer hires), the technical result will be the addition of numerous rows to the database - something that an HRIS is set up to do.
On the other hand, a data warehouse in a people analytics solution stores data much differently than any transactional system. It stores data centered around the employee, position or requisition, versus storing the data around a system transaction like a hire, promotion or pay raise.
The logic needed to translate a single dimension transaction into a people-based record (that identifies key characteristics about an employee and his/her position) is really quite complex.
2. You must also construct this people-based record by bringing together different data from different sources within the context of point-in-time
As discussed in point 1, because data warehouses store differently than a transactional system, when we bring data together in an HR data warehouse, the technical activity shouldn’t be viewed as "adding transactions" as much as it is “adding more context” to an employee, position or requisition.
Time is one of these contextual dimensions - and creates a number of challenges when designing, building and optimizing the performance of an HR data warehouse.
So when bringing in other data sources into a data warehouse for HR reporting and people analytics, we are transforming them to fit within the context of the data that is already there - which is this people-centered view.
Let’s take performance data, for example, which is often from another system or possibly even a spreadsheet. For this data, we are not just taking a file and inserting records (as your transactional systems are designed to do). We are assessing the time period for which this rating is valid (starting with an Effective Date) and adding in that characteristic, within that specific time period, to an existing employee.
This means that there’s lots of under-the-surface magic which must occur so that when you go back in time to analyze the impact that accelerated pay increases have on performance and productivity, you’re data is structured in a way which will make that analysis easy and speed-of-thought.
So when it comes to true people analytics, data preparation, storage and data management, you need two components:
- Very capable tools
- People skilled and experienced in the dark-art of HR data warehousing
Some Real Examples Re: Your People Analytics Challenge
Example 1: Unifying Candidate Data from your ATS with Employee Data from your HRIS
Your challenge starts in the fact that these transactions are executed and stored in separate segments or modules within your transactional systems of record - or most frequently, in an entirely different system altogether.
This may be a combination of an ATS, an HRIS and/or a payroll system.
The complexity is then compounded by the fact that the hiring transaction data (for a candidate we will call “Jim Wong”) must, for analytical purposes, be mashed with the data collected in your HRIS or HCM related to that same person, now an employee (i.e., not a candidate anymore) who is identified in your HRIS through an Employee ID and his name - “James Peter Wong” (aka - “Jim Wong”).
So the proper names in your ATS and HRIS mean the same, are the same, but they are different.
In addition, there is no consistent “bridge” between Mr. Wong’s candidate data in your ATS and his employee data in your HRIS.
But this is just the start.
Once you’ve consolidated all of those transactional data points about Jim/James Peter and every other candidate/employee - you then need to store them in a way which is people-centric - not transaction-centric - and in a platform capable of powerful data discovery relevant to people analytics use cases.
Example 2: Using Your People Data To Create Sales Team Success Profiles
You’ve been tasked with creating Success Profiles for your Sales Team.
In order to do that, you may start with analyzing the employee lifecycle of consistently top performers - employees like “Stephanie Cruz”.
Stephanie was an agency-sourced candidate and a finders fee was paid (incidentally, she was hired under her pre-marriage name which was logged in your iCIMS ATS as “Steph daSilva”) - and you need to track her through all positions, pay grades and compa-ratios, learning events, leaves of absence, performance ratings and sales quotas achieved.
The analysis also calls for you to find all other Sales Reps who were hired by the same Hiring Manager, a Sales Manager named Brad Jones who is consistently evaluated in his Multi-rater feedback as Top Quartile for Developing Others.
In addition, you need to test the theory that those who attended the innovative “Solution Selling” course delivered better results in the 4 Quarters immediately following the attendance of this training course.
Addressing this scenario is quite complex and a big part of the reason why we haven’t really moved the needle in HR Reporting and People Analytics over the past 20 years
In a nutshell, you are looking to understand the return on investment (ROI) and learning impact of this course given you have plans to roll it out globally (sidebar: click here to download our comprehensive Playbook which will help you tackle these types of projects).
The systems required for conducting this analysis will include: your ATS, your core HRIS, Compensation System and Pay Grade Scales (historical and current), Learning Management System, Performance Feedback Tool, Sales Results (Quotas), Time Tracking (PTO), amongst potentially other sources of data.
What’s required at speed-of-thought and with no degradation to other user’s performance, is a system being able to grab the masses of simple, single dimension transaction-centric details across a company (like promotions, learning, salary and PTO), and to then package and aggregate the right segment of data in a way that delivers an employee-centric view - with the added dimension of time.
A transactional system can’t deliver this.
“Wait… I thought People Analytics was part of my HR Tech”
That’s what you thought, but unfortunately, it isn’t.
Instead of true people analytics, you get transactional reporting with some basic data visualization.
Now, this transactional reporting isn’t all bad – it can actually be pretty good for some levels. In fact, you can likely access reports that meet basic needs and the self-serve reporting requirements of some front-line users.
But this isn’t analytics and doesn’t meet the needs of many functional analysts and leads, or power reporting teams, and certainly not those who want insight based on data mashed from numerous HR systems and sources.
So even though things look quite rosy from the outside-in, there are many who experience weekly and monthly headaches and face unnecessary complexity to deliver the type of reporting and analytics their audiences really want, need and expect.
We know this because many of our customers have partnered with us to solve these reporting and analytics challenges with our managed service analytics solution.
"Simply put…you don’t get People Analytics in transactional HR Tech"
6 Considerations for DIY People Analytics
One Time Cost
Implementation + Initial development of your Reports & Analytics + Training + Subscription or Licensing Fees.
According to Workday, their new DIY People Analytics module will cost about 40% of your Workday HCM subscription.
And for those running other HCM Platforms like SAP/SuccessFactors, ORACLE or UKG/UltiPro, you might select BI toolsets like BW, OBIEE, IBM Cognos, SAS, Qlik or Tableau which will come with significant licensing commitments and costsfor implementing many other components of the “stack”.
How much will you have to spend on initial configuration and implementation? Training credits? Expert partner professional services?
Annual Licensing or Subscription Fee for your BI, ETL & tech stack. + BI Developer(s) for ongoing dev & data management. Est $150k-$300k/yr.
Let’s say you convince your corporate investment committee to fund the initial build of your People Analytics platform, now you’ve got to run it.
Over and above your annual, ongoing subscription fees you will be paying for the BI product and other technical components, you will need additional specialized resource(s) specifically for Business Intelligence - that’s in addition to your HCM Analyst(s) who will continue to operate and upgrade your transactional HR modules.
I’ve estimated that the smallest companies running HCM platforms Workday, UKG/UltiPro and SuccessFactors (~1,000 employees) will need to spend at least $150k/year on delivering People Analytics through DIY approaches - with many enterprises spending well into the high hundreds of thousands annually.
The Need to Hire HR BI Developers
To deliver HR Reporting and true People Analytics through a Data Warehouse, you will need BI Developer(s) with HR experience
With the prospect of “no more SQL”, the going-in position is that many of these tools are built for the people operations analyst, the people analytics expert, or your team member responsible for things like recruitment reporting.
Don’t get fooled by that given the specific tasks required for running your platform would be more familiar to someone in a BI Developer role rather than a People Ops specialist. You do, however, already have an HCM Analyst(s) on the ground. Good news right?
Maybe not. My sense is your HCM Analyst may not be able to make the leap - or have the time and interest - to becoming this BI Developer for ongoing support of your People Analytics capability.
And your people analytics “expert”, who you’ve just hired in the past few years, might be best utilized actually using your People Analytics outputs to drive business decisions versus integrating and preparing your data and developing dashboards - which will take up a significant portion of this role if you lumber her or him with this.
You may want to ask your People Analytics “expert” what they need to be successful - and where they should spend their time:
- Operating your BI infrastructure and preparing data, or
- Using your data and analytical solutions to solve people and business issues that matter.
If they opt for the former, beware. If they opt for the latter, you’d better have a good strategy to enable this because they might not stick around for long - and then you’ll be back at the beginning. Remember, this is a frothy market for hot skills like a People Analytics “expert”.
I think the reality is you will need to hire a net new BI Developer strictly for People Analytics.
Once you do hire your new BI Developer, this person might not have any experience in the nuances of HR data warehousing, the data driven needs of your people operations, and how to best develop business-focused and impactful people analytics.
Bottom line, implementing People Analytics with a DIY approach will likely require you to add a full FTE (and maybe more) with the optimal skills combination of a BI Developer mixed with a People Analytics lead.
BI Developers will cost you about $100k per year - not including the hot-product skills premium, your location puts-and-takes, and your payroll load factor.
That needs to be part of your total cost of ownership.
Your Systems' Evolving Data Models
Your data structures from other systems will be constantly in flux. Your BI Developer(s) will need to be on top of this moving forward.
This consideration mainly applies to your other HR Tech systems whose data you’ve integrated into your People Analytics engine – and the fact that their constantly evolving data models will cause downstream issues during data preparation/management and errors in your analytics.
- How is your BI Developer going to deal with that?
- How much time will that take every month?
- What validation processes, integrations, relationships and governance will they need in place with non HR system owners and IT?
HR Data Complexity
HR Data is some of the most complex within a business due to its nested, historical and progressive nature. Flat transactional data must be transformed and it's not an easy task.
I’ve already provided my detailed reasoning for this earlier in this Point of View - HR data is a remarkably tough nut to crack for analytical purposes.
Transactional HR data is simply not usable for true analytics. It must be transformed. And Transactional systems are not built to run analytics. You need a data warehouse-based system for that purpose.
And herein lies the reason why there’s limited reporting and analytic functionality in any transactional system - and the very essence of why Workday bought Platfora and is releasing Prism Analytics, why Ultimate Software has an IBM Cognos snap-on, why SAP has had BW for ~20 years, and ORACLE has OBIEE.
Incidentally, this holds true for any transactional system, from Workday to Salesforce to a Point-of-Sale system and beyond.
Transactional systems are for transacting, or writing data to a system. Data warehouses and analytics systems are designed for reading data from systems data management, discovery and visualization.
Apples and oranges.
Blending Data Complexity
HR Data becomes even more complex when you add business dimensions from other systems like performance, outcomes or productivity - especially when there's no unique identifier
As an extension to the prior 2 items, mashing HR and business data together from different sources, Workday or non Workday is a custom activity given the endless arrays of data schema that will be present.
Think of a company who is moving towards Workday over several phases - but is currently running Workday HR, ORACLE Financials, and best-of-breed products like iCIMS as an ATS, UKG for Time & Leave, Cornerstone for Learning, Salesforce as a CRM, workforce plans in spreadsheets, Qualtrics for ExM, operational production data in a custom system, and externally sourced “big data” for things like local labor market metrics.
Now think about getting analytics on “productivity” which might solicit data from each of these systems.
Next, consider how your HR Team (or more than likely, your BI Developer) will map all of these data points (each system with unique identifiers - some consistent, others not), into a consolidated record that works both initially, but more importantly, in a seamless, ongoing production-like fashion.
Set-it-and-forget-it won’t work because the transformation and integration of your other HR data (non Workday systems, surveys, productivity, learning, health and safety, time, etc.) into one single, unified data set is EXTREMELY COMPLEX and finicky which needs and deserves constant care and feeding - regardless of the BI toolsets at your disposal.
This is a unique, custom and forever activity for every HR Technology landscape.
Transformation of data for analytic use cases also requires your BI Developer to have great understanding of the business outcomes and problems you are looking for insight into.
My sense is it will take some time for your BI Developer to come up to speed on your most pressing strategic and operational people, talent and organizational issues that warrant analytical investigation.
Don’t Get Fooled Again
I believe HR Tech has traditionally underserved the management information needs of HR teams, executives and businesses.
It’s only recently that HR Tech vendors have been attuned to this critical need – and it’s only just now that we are starting to move the needle in terms of data driven maturity across HR.
Yet while we are starting to make small progress in delivering the technical capabilities which have been available to the rest of our business colleagues for the last 20 years, it’s remarkably difficult and complex to deliver a true people analytics capability.
And for those who decide to go-it-alone and build a Do It Yourself solution, there will be a significant total cost of ownership, high complexity and risk…
...you up for that?
Why not consider your options?
There are options out there which may be a much better fit for your HR Reporting and People Analytics needs.
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