Mining for HR Gold


Human Resources (HR) exists as a function in every company and impacts every employee. HR departments often concern themselves mainly with payroll and enrolling employees in benefit plans but they can do so much more with the information they have if given the opportunity. In fact, they are often an overlooked area for measuring company effectiveness.

Mining for HR Gold Involves Four Components

Collect and organize important data.

Your company is probably already collecting the key HR information it needs to maintain business operations and meet labor regulations, but are you getting the most from that data? Making the most of your data doesn’t only depend on the information but how it is organized and the ease of accessing it.

Employee salaries are in your payroll system. Reviews, training and certifications are in departmental spreadsheets (each department is collecting it differently, of course). Company-paid benefits are located in your accounts payable system. Your applicant data is with the recruiter. Chicago data is in the Chicago office while the Dallas data is in Dallas. You can probably see the issue now. The data is all over and needs to be “lassoed” in order to be analyzed and used most effectively.

An HR system is a good way to accomplish this. Formal systems keep information centralized, standardized and consistent. The system can also provide controlled access to this very sensitive employee data so only the appropriate people have access.

Once the data is “lassoed” into one centralized location, it can be more easily reviewed to determine if it is adequate for the analysis needed by the company and/or other reporting agencies.

Analyze data in a meaningful way for your company.

Achieving company goals and making your organization more effective are two of the main priorities of every business. However, companies often do not incorporate or overlook the “real” value HR data can have on meeting these priorities. Simply analyzing the “trendy” HR metrics may not be what your company needs.

One key metric that is rarely analyzed, but can be quite meaningful to your business, is the costs to hire and retain an employee. This metric is helpful when reviewing employee retention initiatives, as well as when reviewing a new line of business. With a new line of business, all related costs need to be as complete as possible, including HR costs. Be sure to include not only salary and benefits but training, mentoring, ramp-up time, certifications and other costs directly attributable to the employee that may not be shown on a paystub.

In addition, the “perspective” or “angle” of the data must also be considered. For example, while reviewing employee turnover at the company level is somewhat meaningful, reviewing employee turnover at a department or even manager level might be much more meaningful. At the company level, one may see high turnover as a company culture issue. However, when a data review at the manager level reveals 80 percent of the turnover falls under one manager, or when a separate data review shows that turn-over is lower in one department than another, the real problem at the heart of employee turn-over becomes more apparent.

Business and business issues constantly change and evolve so it is important to have a periodic review of the analytical information that is most meaningful to your company. It is also important to make sure this review is conducted by trained and reliable personnel. A great way to make sure this happens is to form an Advisory Group to oversee the review.

Provide analysis in a timely manner to the most appropriately trained personnel.

The analysis needs to be received by the user community in a timely manner. When the data is too old, it becomes meaningless. If a manager needed specific data before a budget meeting and didn’t receive it until the day of, they may not have the time to effectively process the information and prepare for the meeting.

HR data is sensitive information by its nature. It is essential that HR data be collected and managed by reliable and trustworthy employees. Distribution of the analysis also needs to be closely monitored. For instance, a vice president would like to investigate a new line of business and has asked to see employee costs for a similar line of business. Whether or not they need to see specific employee names from the other business line should also be considered. On the other hand, not giving a manager departmental turnover information will not help improve the department’s poor performance. So ask yourself, who would you give the employee names to?

Lastly, to appropriately use the analysis, the user needs to understand the data. To fully understand the data, the user should be, as needed, informed on where the data comes from, how it is calculated or compiled, and what the analysis means. If the users of the data don’t understand what they are looking at, the analysis is of no value - think of it as fool’s gold.

Hold someone accountable for the results.

Data complied and distributed just for information sake, if it is actually read, is often reviewed in a cursory manner with no one taking ownership or responsibility for the provided information. The employee or Advisory Group reviewing and disseminating the analysis to users must have the authority to make the business and HR changes they deem necessary to meet the organization’s main priorities. Avoiding necessary changes in business policies, procedures and practices will result in unchanged conditions the next time the analysis is made. This offers little or if any real value to the user community and the organization as a whole.

Next Steps

Mining HR data for analysis can involve a major time commitment and lead to significant changes in your organization. Your company’s HR analysis will not only need input from the HR group, but also from the Executive Team, Managers and other potential recipients and providers of the data. Keeping this in mind, you may find greater benefit if you break the analysis into small, simple projects focusing on the easiest wins. Additional layers of complexity can be added once that first project is completed and succeeds.

Keep in mind, the implementation of each project will include asking yourself how the four components discussed above are essential to HR data mining:

  • How can we collect the data in a manner where we can use it for analysis?
  • What metrics would be meaningful for analyzing our company’s effectiveness?
  • How do we distribute the analysis?
  • Who is accountable for changing the results that need change?
As a team and with an executable strategy, your company can turn a pile of disparate data into a pile of HR gold.

Learn How

If you would like to learn more on how Omnios can help you take advantage of your HR data, please contact Shawn Osland at 847-459-8500 ext 159.