The HR Board Report: How to come up with data driven reports

One of the key functions of any board is\nto make sure the human resources (HR) of the organisation is put to good use.\nTo enable the board to effectively execute this task they need information on\nhow human resource activities are impacting on business performance. This\ntask is made even more difficult by the fact that most of the Board HR\nCommittees are chaired by people with no HR experience. This is not a major\nchallenge as long as the committee members are provided with the right\ninformation to enable them to make informed decisions.

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\nThe major challenge facing organisations today is that the human resource\nfunction is one of the most under-reported functions in most organisations. As\na result, most of the scandals bedevilling organisations tend to start in the\nhuman resources department. Most board members have no idea what happens in\nhuman resources. In most cases they only wake up after some form of scandal in\nthe human resources department. This  should not happen if the board is supplied\nwith the key indicators from the human resources.

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\nMost of the reports supplied to boards have tended to be narratives not\nsupported by any factual information in most cases.  Trends are changing.\nHuman resource management and reporting needs to be data driven. I know a few\nprogressive organisations that have started well on this journey. Those that\nhave started have moved from opinion driven reporting systems to data driven\nsystems. The only challenge with where they are is that even as they are moving\ninto data driven areas, the information is still descriptive in nature with no\nmajor insights coming from the data.

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\nI would like to classify the level of reporting at board level into four\ncategories. Level one is opinion driven (primitive stage), level two is the\ndescriptive stage, level three is predictive stage and level four is the\nprescriptive stage.

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\nAt level one, the information provided is mainly opinion driven. Reports at\nthis stage are narrative and full of the opinions provided by the human\nresources department staff on a number of issues. The assumption at this stage\nis that the people in human resources know what they are doing and they will\nact in the best interest of the company. We know this is not normally correct\nas most senior managers, not only in HR, but in other departments, make\ndecisions driven by their own personal interests. There are chances that the\nboard may make serious human resources errors if they base their reports on the\nabove.
\nIn stage two, you mainly find descriptive reports. Typical Board reports cover\nthings like the number of people on sick leave, number of people on leave,\nheadcount and number of disciplinary cases handled, number of people trained,\netc. This is all good but no insights are driven from such reporting. It is\nalmost like information for noting when it is supposed to assist the board to\nmake decision. To enhance the reports at this stage, there is need to go deeper\nthan just providing the figures. For example, instead of reporting on number of\npeople on sick leave, annual leave, study leave, you could try to indicate the\ncost the company is incurring because this is paid leave. You could also add\nthe costs of covering up for the individuals on leave and loss of productivity.\nEvery data you find in the human resources department can be turned into\ninsights that would help the board make better decisions. On staff costs,\ninstead of reporting staff costs to revenue on a global level you need to break\nstaff costs to revenue by level and also executive staff costs as a percentage\nof the overall wage bill. If you have industry benchmarks for the same\nindicators it’s even better.

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\nThe predictive analytics stage brings even better insight for business and not\nfor human resources. While the data comes from the human resources department,\nthe impact is always measured in business performance. Many companies are\nstruggling, for example, at workforce planning. They neither know how many\nemployees (establishment provision) they need for a particular period nor at\nwhat cost. If they do, many of these companies guess these figures and usually\ndiscover later, for example, that they are over or under staffed. Many of the\nretrenchment exercises that we are seeing could have been avoided if companies\nhad done proper workforce planning using statistical models. Still in the\npredictive stage, the human resources department can predict the employees who\nare likely to be top performers before they are hired and the Board would be\ndelighted to have such information, especially for senior and critical roles in\nthe organisation.

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\nFlight Risk Calculator, a human resources function, can predict which employees\nare likely to leave the organisation and when. This will enable the\norganisation to arrest the situation before the competent employees leave.\nFlight risk can also be calculated for new employees as they enter the\norganisation. I have given a few examples, but there are so many areas where\npredictive analytics (using statistical models) can be used to add value to the\nbusiness.
\nThere are many other HR solutions based on your company’s data that you can\nstart implementing. Leading international companies such as Google have spent\nyears methodically building Human Resources Management Systems which have\nsubsequently paved way to their incredible success.

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\nCompanies of different sizes operating in different industries can benefit from\nextensive data analysis. If you have not given any thought to building a\ncomprehensive database for your company, it is high time you do. Subjective\n(guess work) decision making is dangerous. Many companies are struggling\nbecause of it. Leading companies in the world have embraced a data driven\napproach to human resources management because of its immense benefits. It is\nhigh time Zimbabwean companies adopt evidence based management.
\nThe prescriptive stage is the pinnacle of human resources reporting. At this\nstage you can tell which human resources policies or interventions will bring\nimmense value to the business before they are implemented.

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Memory Nguwi is an Occupational Psychologist, Data Scientist, Speaker, & Managing Consultant- Industrial Psychology Consultants (Pvt) Ltd a management and human resources consulting firm. https://www.linkedin.com/in/memorynguwi/ Phone +263 4 481946-48/481950/2900276/2900966 or email: mnguwi@ipcconsultants.com  or visit our website at www.ipcconsultants.com