So we now have our data, our metrics, and we understand that we need to focus our reporting on genuine insights into the operation of the business. Easy enough to say, but what is insight and how do you identify it?
Insight is “penetrating mental vision or discernment; the faculty of seeing into inner character or underlying truth”. So you need to find something interesting to say about your organisation that either, the report’s audience doesn’t know, or only suspected and can therefore inform future decision making.
Sounds great, but what is “insight” really? How will you recognise it in your organisation?
Recognising ‘insight’
The slightly unhelpful answer is that the only person who can determine that is you. Insightful findings from data ultimately rely on context; what does your company do, where is it based, how is it performing, is it expanding rapidly or undergoing widespread redundancies?
A labour turnover rate of 20% would be outrageous in a stable manufacturing firm, but fantastic in a typical call centre. You need to ensure that you have a clear understanding of your organisation’s priorities and historic performance and this should then be the filter through which you consider all the data you generate.
Practical steps
Fear not! There’s some practical help we can give you, to help you identify something insightful.
There are three objective sources of information that you can use to tell if, what is happening in your data, is worth bringing to the attention of the business:
- Historic performance
- Internal benchmarking
- External benchmarking
Historic performance
Historic information is vitally important as it allows you to define what ‘normal’ looks like in your organisation. Normal does not mean acceptable, but it can tell you if the metrics you are seeing now are unusually low, unusually high, or business as usual for you.
From this starting point you can then identify the areas where you need to dig deeper and find out the human story behind the numbers; is a spike in engagement in one department the result of a new manager working in a new way that might be shared, or a natural high from a great project just delivered? Is a steep increase in labour turnover in one area due to dissatisfaction with low pay, or a coincidental series of resignations with no single underlying factor?
If you are lucky you will already have historic information that you can use straightaway. If not you may need to run your reporting for some time until you build up a history of how your company performs. It is by using this information and questioning that you will identify the issues that need to be brought to the attention of the business. This will also allow you to better judge performance versus internal or external benchmarking.
Internal benchmarking
Your organisation will set internal benchmarks for various metrics as it identifies problems, projects, and priorities. If you are lucky then these will be something more formal, for example, seeking a 10% reduction in sickness absence allows you to clearly define a hit or miss target. Or it may be something more nebulous such as a desire for increased employee engagement, in which case the challenge is to dig into your available reporting for measures to help identify if this is being achieved.
Picking up on the issues which your business leaders are discussing and are most interested in, is a great opportunity to set internal benchmarks. Identifying and reporting progress towards these demonstrates a direct connection between HR’s activities and supporting the business.
External benchmarking
To gain an extra perspective on what is ‘normal’ for any given metric, you can look externally and seek out external benchmarking. The primary benefit is that you gain a broad insight into whether your organisation is under or over performing on a particular issue against comparable organisations.
However, I would add a note of caution that this kind of data is best used for perspective rather than firm goal setting. Circumstances vary considerably and it can be difficult to ensure you are comparing exactly the same measure – apples with apples. Labour turnover, for example, has no standard methodology in business. Companies may report on year to date or rolling performance, average headcount or end of period headcount, with redundancies included or excluded, and so on.
Instead external benchmarking is helpful in identifying whether you seem to be ahead or behind the market – and therefore what improvement you need to make, if any. It also allows you to push back on internal objectives that may be unrealistic, for example, a demand for a zero absence rate.
Supporting your journey
Innecto is passionate about helping companies embrace analytics and start their data journey. Using HR analytics in your organisation now, is about preparing for the future, and building your own confidence in gathering and interpreting HR’s data.
Look for the insight in your data to ensure that your report is the one that people look out for!
