5 Reasons Why Your HR Analytics CoE is Not Delivering Expected ROI

An Analytics Centre of Excellence (ACoE) is an old industry proven model, which is meant to be a central competency to provide leadership and best practices in data research, analysis & modeling, insight based recommendations, and data & measurement governance support for any specialized areas.

The concept of HR Analytics CoE (HR ACoE) is no exception and a recommended setup by most of the consulting firms as a sustainable & scalable model. The organizational alignment of HR ACoE may vary from one organization to other. Usually, the competency is located in offshore centers due to the availability of skilled Talent at the reasonable cost and have matrix reporting to Head of HR Shared Services, and Head of HR Strategy (or Head of P&R or Head of Employee Relation or HR COO). Big organization with the global geographical footprint, may additionally appoint Global Head of HR Analytics with accountability of HR ACoE.

The ROI curve of HR ACoE follows multi-S curve path (figure 1), as the engagement progresses through different stages of analytics maturity model. The area below the graph represents the ROI. Larger the area, higher return on investment.

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Figure 1

However, often engagement is stuck in neutral, mostly at inflection points (A, B or C) which raise a question on return from ACoE. What could go wrong in spite of proper planning, sponsorship, and investment?

Here are five strategic reasons your HR ACoE is not delivering ROI as expected within defined timelines.

1. Leadership Instability: Frequent churn at leadership level causes a severe impact on HR Analytics/HR ACoE’s performance. Change in Leadership may dampen speed of the progress that not only flattens s-curve but also shifts inflection points, and as a result, ROI & moral of the team.

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Figure 2

The area under the ROI curve may remain same but shifts horizontally to take more time to reach to inflection points i.e. A, B, C (Figure 1). This change delays realization of overall ROI from ACoE. Leadership change coupled with the organizational realignment of HR Analytics function aggravate the impact further.

Fix#: Organization have started to realize the benefit of HR Analytics contribution to the strategic mission and shareholder values in the future state of work. Then, shouldn’t HR Analytics leader position be identified as one of the “key” strategic posts in the organization, and be treated accordingly? People (Leadership) churn is a bitter truth and unavoidable. Hence, identifying this position as a key role will change the way this post is managed i.e. recruitment, C&B, development & succession.

2. Strategy on Paper: HR ACoE is set up for a particular purpose and plan is laid out accordingly. The multi-year strategy plan usually articulates of what is expected and by when. It covers all four key competencies i.e. Data, Reporting, Strategic Analysis, and Advanced Analytics. However, when the rubber hits the road, you may get stuck with “urgent” at the cost of “important.”. If not managed well, your CoE will become a dumping ground for anything related to HR data, and become a data Reporting CoE, not Analytics CoE. In other words, you are stuck in reporting zone and don’t have needed capacity and appetite to pivot to next level i.e. Strategic Analysis (Figure 1). The danger you may get into is shifting your multi-S curve over time leading to stakeholders forming a perception of ACoE not delivering expected ROI.

Fix#: Understand and align your strategy with organization readiness. If your strategy is to create Reporting CoE, be that. If your organization is not yet ready to shift to strategic analysis or advanced analytics, don’t over-promise while defining objectives for CoE. Address current reporting challenges by streamlining & automating processes and then pivot to next zone. REMEMBER: HR ACoE is setup to execute the p by the Business Leaders and HR Business Partners. So, the change needs to be driven by all the stakeholders (Figure 3) not only ACoE. Additionally, be clear about the measurement of ROI. It’s different for different competencies e.g. efficiency for reporting while effectiveness for advanced analytics.

3. Being Partner Vs. Being Prescriptive: Business Leaders and HR Business partners are the strategic partners to HR ACoE leader. While they are expected to bring strategic guidance and process facilitation, ACoE executes those priorities through analytical frameworks, tools, data analysis, and recommendation.

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Figure 3

However, there is a thin line between being a partner vs. being prescriptive. Wikipedia defines partnership as “an arrangement where parties, known as partners, agree to cooperate to advance their mutual interests. Organizations may partner together to increase the likelihood of each achieving their mission and to amplify their reach.”.

Fix#: Partner with a purpose, not with a prescription. Prescription (synonyms: Order) limits the possibilities that ACoE can deliver.

4. Jack Of All Trades (And Master Of None): You are an Analytics Center of Excellence, and you should do everything. Does this ring the bell? Everyone can’t do everything – testing of newly acquired data, reporting, hot-spot analysis, pattern recognition, build & deploy predictive models, and tell an impactful story through accurate visualization & executive commentary. Your CoE efficiency and effectiveness, both is compromised if this is not addressed strategically under operating model.

Even each Marvel super-heroes have a unique value proposition.

Fix#:  Divide your HR ACoE into small CoEs of specialized services i.e. Data, Reporting, Strategic Analysis, And Advanced Analytics.  Map all expected engagements into these four distinct verticals. Align your Talent to one of these verticals, basis their key skills and knowledge.

HR Analytics Center of Excellence = f(x1+x2+x3+x4), where

x1 = f(data CoE, n1)

x2 = f(reporting CoE, n2)

x3 = f(Strategic Analysis CoE, n3)

x4 = f(Advanced Analytics CoE, n4)

n = HR Analytics CoE FTEs = n1+n2+n3+n4

This helps you:

  • Separate vertical capacity from total capacity at ACoE
  • Prioritize & invest in what is important for the stakeholders
  • Communicate, and manage your stakeholder’s expectations
  • Additionally, define your Talent acquisition, development and retention strategy at ACoE.

5. Tool Agnostic: One Size Doesn’t Fit All

Are you dependent on too few technologies?drill-444484_960_720

Do you have specialized tools to deliver specialized services i.e. Data, Reporting, Strategic Analysis, And Advanced Analytics?

When was the last time you (Head of HR Analytics/Head of HR ACoE) visited the HR Tech or Analytics Forum to learn what’s new in the market?

Does your multi-year strategic plan consist of regular technology assessment?

If your answer to any of the above question is “no,” you are limiting your organization efficiency and effectiveness capability.

Fix#: Build an environment that enables growth of a data analytics ecosystem. Just as plants require the appropriate environment to thrive and flourish, so does your HR Analytics center of excellence and the new resources brought in to support it.

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About Manoj Kumar 68 Articles
A senior management consulting professional and an entrepreneur by heart, Manoj has led global change programs for fortune 500 companies like HSBC, Fidelity Investments, and GE. His expertise lies in functional strategy development, operating model building, process analysis, operational improvement, and simplification including global implementation of BI technologies. In 2014, he was recognized as one of the Top 72 HR Analytics Influencers worldwide. He is currently working as the Vice President, HR Analytics, HSBC. He is also very active in the Entrepreneurial community in India. His entrepreneurial stints include – India’s first online Toy Rental Company “Rentoys” (http://www.rentoys.in), featured in Outlook Money, ET, DARE, UTV Pitch, ET Now, BangaloreMirror, Indian Express, DNA) and an online marketplace for Indian voiceover artists – VoiceHired.com (1000+ artist community)