The Corporate World Is Ready for (HR) Insights
Many articles have been written about People Analytics and the value of converting people and HR data into actionable insights to gain competitive advantages. This year seems to be one of digital transformation everywhere—and analytics is an important part of the business case. Having worked for leading companies in various industries and geographies over the past few decades, I have experienced the trend towards streamlined business processes across those geographies and industries. This is especially true for the HR space where standards are moving in fast and where the war for talent is never ending.
Anyway, I can admit that I am part-time data nerd and have a strong feeling for analytics. For the past 18 months, I have been fortunate to work extensively with analytics related to Human Capital Management. In this blog, I will share some more in-depth experiences with the newest addition to the SuccessFactors software suite: Workforce Analytics on HANA (WFA on HANA). This innovation allows companies to analyze data over time, understanding the trends shaping your workforce and providing you with actionable insights. And since it is based on the in-memory architecture of HANA, most of the insights are provided in just a few seconds.
Hoping you will still read on, I will give you the conclusion first:
WFA on HANA is the most important feature that has been added for a long time to the SuccessFactors suite.
And knowing intimately what innovations have been provided in the last 30+ releases, this is a big thing to say. Read on, and I hope you understand why I am making this bold claim!
First things first: define what you want to know.
Before embarking on an analytical journey, it is important to define what key performance indicators or metrics are important to your organization. What is it that is most important to you? What makes your company different? What trends in the demographics do you need to be aware of? What hypothesis do you want to test? The definitions can rely on your own historical experiences, but you can also take advantage of the experiences from GP Strategies and SAP who define a framework of standards for Human Capital Measures. These ensure that you follow good industry practice and allow you to compare your own organization to market data provided by SAP.
Workforce Analytics on HANA lets you look at your data like you have never been able to before so you can understand more about the trends that are shaping your workforce over time, and so you can make better People Decisions to secure your future. WFA on HANA has a set of predefined metrics following good industry practices and is flexible enough to allow companies add their own dimensions and filtering capabilities. For example, you can run headcount reports over different time periods, split by different dimensions, drill down, filter, and even combine metrics (e.g., “managerial headcount split by gender”). So, in that sense, Workforce Analytics is a flexible tool that allows you to report on the items that give you a competitive edge while on the other hand following good industry principles. End users are intended to be not only business analysts and reporting specialists, but also HR professionals and senior managers.
Case: Headcount Reporting
Let’s say that you just want to know the headcount for the past 4 years. WFA on HANA allows you to get this with the measure “EOP Headcount” (End-Of-Period Headcount). If you were to do this in other reporting tools, such as Online Report Designer, this report would take minutes to load and would not be suitable for online analytics.
This shows you, hopefully not surprising, that there has been significant growth in your company headcount (or that there have been acquisitions or other major events). More analysis will reveal where the growth has been, what employment types are the most significant, and more.
Case: Headcount Reporting and Diversity
Then you may want to know what the gender distribution looks like over time for your headcount. Easy, just specify that you want to analyze data by gender (multiple other analytical dimensions exist).
Now this report shows you that there were some data quality issues in previous years (gender “Unallocated”), but also that the gender split is fairly linear across the years. It is possible to drill down to, for example, Country level to look at differences in geographical areas. So, this is what we want to document to our CHRO who asked the question.
Case: Headcount Reporting and the Five-Generation Workforce
Next you may want to look at headcount and age distribution over time. Simple—just add Age as an analytical dimension and the numbers are displayed.
Instead of Age, you could also use the dimension Generation, which converts age to a descriptive text in case this is more meaningful to you. You can also click out any of the dimensions as to emphasize the changes in the others, if you, for example, would be interested in knowing the “over 40” and “below 40” groups.
Case: Managerial Positions Split by Age Ranges
But these three, you may say, are just simple data, not really insights. OK, then let’s try to answer a little more complex question about managerial positions—how are we staffing them? To answer this, let’s first look at how many managerial colleagues we employ.
As expected, as we have grown, the number of managerial positions has also grown. We can also see that the growth has been significantly larger in the older segment than in the younger. Again, this is not a surprise but important to know. The data tells you something about what promotion principles you have had the past years, and this can be used going forward.
Case: Managerial Positions Split by Gender
Like the regular headcount dimension, you could also look at the gender dimension instead of age ranges. Just add Gender to the Dimension and the report generates. This allows us to understand if we are applying any gender-based biases towards our hiring policies and where in the organization this bias is most profound. We also see which areas can serve as role models so that we better understand what practices we should learn from and apply in other areas.
Like all other measures, you can drill down to understand if there are geographical differences, business unit differences, or which managerial lines have the best mix. If, for example, you have a large presence in Southeast Asia, you can look at that region only to see how the numbers are stacking up. I didn’t include these details in the images—I hope you get the point.
Employee Central Is the Core
All data you source in WFA on HANA is delivered directly from effective dated transactions in Employee Central. Data refreshes happen daily and take only a few minutes to complete. With the latest Q1-2018 release, WFA also respects GDPR requirements such as ability to perform read level logging of personal or sensitive information such as Gender. Events and Event Reasons are mapped from Employee Central to relevant Dimensions in WFA, allowing you to compare your own trends to market benchmarks for measures such as Voluntary Termination Rate.
OK, this blog covered almost 2% of the capabilities in WFA on HANA. I did not mention anything relating to termination trends (voluntary vs. involuntary terminations per business area), combining different data sources such as performance ratings and termination trends, or looking at average salary and salary ranges split by gender or generations.
As mentioned in the introduction, I think it is fair to say this is a major improvement in the SuccessFactors suite. Best of all, WFA on HANA can be implemented now if you have Employee Central in place—or are planning to. WFA sources data from relevant SuccessFactors modules and optimizes your data views from the transactional database into cubes that run in the background, automated via impressively speedy daily (or hourly) processing.
Working with people analytics is both a project where you define a set of KPIs, implement a tool, and build processes and education around it. It is also a journey where you will be able to—if not forced to—adapt new KPIs as your business surroundings change and as your business matures regarding analytical thinking. It is important to understand that WFA on HANA is not the end result; it is the beginning of a continuous journey where you will improve your understanding over time, and your capabilities to make better people decisions will improve over time.
If you have any comments or questions, please do reach out to us. At GP Strategies, we have always been leading the path, and we are happy to be part of the first partners able to implement WFA on HANA for real. And hey—please do leave a comment here—it is always a great inspiration to get feedback.