HR Analytics Gives Alabama Firm Better Insight - InformationWeek

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6/3/2015
03:26 PM
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HR Analytics Gives Alabama Firm Better Insight

The HR analytics field is getting crowded. Here's how the chief HR officer at an Alabama company chose one solution and gained better insight over the business.

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When it comes to figuring out a company's finances, getting a handle on payroll and employee expenses is critical. That's why getting the analysis of those expenses right is so important.

Cathy Hulsey is chief human resources officer for EPL, Inc., a Birmingham, Ala., software company in business since 1977. EPL, with 76 employees, is a company that would be defined as small-to-medium-sized.

Even so, in a telephone interview with InformationWeek, Hulsey said that getting basic numbers on HR factors was intensely time-consuming. "I had to do it the old-fashioned way: Put everything in the spreadsheet and make sure everything lined up. Sometimes it would take a whole day to get the final numbers."

(Image: geralt via Pixabay)

(Image: geralt via Pixabay)

EPL became a customer of ADP for payroll and HR services in 2013. Hulsey said that she began to look for analytics support and ultimately narrowed her consideration to a pair of options, ADP and a competitor she declined to name. She was offered a chance to look at the ADP analytics suite and accepted the opportunity. When asked about the integration process, Hulsey said, "Adding the analytics was very easy. It was literally a flip of a switch: Once we said 'yes' the dashboard literally just showed up at my log-in."

Analytics around HR has become a more competitive market, largely because it is one business area that has seen the least uptake in previous iterations.

In a November 2014 article at Forbes.com, Josh Bersin wrote that recent research indicated that only 4% of HR departments are using predictive analytics, though it's an issue that more than 60% struggle with. Recent product and service announcements from companies including SAP, Oracle, IBM, Skillsoft, and ADP show that enterprise software vendors have recognized that an opening exists for advanced analytics as part of an enterprise software toolkit.

In most cases, the HR analytics are tied to other modules in an overall enterprise management suite. In ADP's case, the analytics are tied to the services the company offers in payroll and human resources management.

[ The options for HR analytics keep increasing. Read Workday Brings 'Insights' To Talent Management. ]

Hulsey said that using the ADP Datacloud allows for the forward-looking analytics that she needs to have as part of the executive team.

"Right now we're putting together a three-year strategic plan. We're looking at the data going forward -- looking at financials and workforce planning perspectives," she said. Hulsey said that every department in the company wants a higher head-count, but analyzing trends allows her to look at more than simple current and future department sizes. "Aligning personnel with strategic perspectives we can now look at retirement, recruitment, turn-over, total compensation, and other things," she said.

The data analysis isn't restricted to Hulsey's control panel.

"Each manager has access to these analytics through the ADP portal for their team. In, say, network support, you can look at your team members and see the average age, the average earnings, and use the information to see if they're getting the performance and see if there needs to be improvement," she said. "It lets us know whether there are things they need to be working on."

Hulsey also mentioned diversity and employee retention as areas that can be analyzed and corrected through the software's use.

In EPL, Hulsey says that it's not that the analysis couldn't happen before the ADP Datacloud was available, but that now the analysis can happen more quickly and more often. As an executive with "a seat at the table," those objective numbers are critical to her part of the conversation. "It's not that I couldn't do it before, it would just take more time," she said, adding, "I'm fortunate to be at a company that believes HR deserves a seat at the table, but with that comes responsibility. This tool helps me bring evidence to the battle."

Curtis Franklin Jr. is Senior Editor at Dark Reading. In this role he focuses on product and technology coverage for the publication. In addition he works on audio and video programming for Dark Reading and contributes to activities at Interop ITX, Black Hat, INsecurity, and ... View Full Bio
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Curt Franklin
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Curt Franklin,
User Rank: Strategist
6/4/2015 | 1:35:48 PM
Re: Capital Intensive and Human Capital Intensive
@Brian.Dean, much of the historic analysis of HR data has centered on increasing the value of the "human capital" that makes up the workforce -- factors that include, as you note, certification, training, and so on. Now, HR professionals have begun paying attention to many more factors and the HR analytics software has started to reflect that.

It's interesting to see the degree to which "soft" factors like employee satisfaction can have an impact on very hard numbers like productivity and employee churn. I suspect that we're going to see a number of companies paying much more attention to employee satisfaction as the anaysis shows the correlation between happier employees and better company financial results.
Curt Franklin
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Curt Franklin,
User Rank: Strategist
6/4/2015 | 1:39:52 PM
Re: Capital Intensive and Human Capital Intensive
@Whoopty, I agree that it would be most interesting to see how closely employee satisfaction tracks compensation. I think it would be even more interesting to see whether employee happiness really does start to level off after a certain level of compensation, or whether there are alternative sorts of compensation (like time off) that have a greater impact than simple pay level. I strongly suspect that HR pros are about to start learning some intriguing lessons as analytics advance: The real question is whether corporate executives will pay attention.
Curt Franklin
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Curt Franklin,
User Rank: Strategist
6/9/2015 | 10:26:36 AM
Re: Automation tasks
@kstaron, you raise an interesting point, and one that we tend not to talk about in IT: When would it be more cost-effective to go back to the "old fashioned" way of hiring a person to do a task rather than paying a software vendor for the automated solution?

For the last three decades one of the basic justifications for IT spending has been reduced head-count: Is it possible that it would be cheaper to simply pay someone to work with a spreadsheet?

I know that people are expensive but I think this is a great question that's asked far less often than it should be.
Curt Franklin
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Curt Franklin,
User Rank: Strategist
6/9/2015 | 10:44:15 AM
Re: Capital Intensive and Human Capital Intensive
@Brian.Dean, it's very true -- at a certain level of analytics we tend to view all businesses and all employees the same. I think one of the reasons behind this is fear: executives are afraid that, if they treat their business as unique and things don't go swimmingly, they'll be blamed and suffer the consequences. If, on the other hand, they point to "business research" as justification for their actions, they're often shielded from the worst consequences.

In the US we have a number of cultural things working, as well. In general, we distrust leisure time and those who enjoy it -- "Idle hands are the devil's workshop," and all that. When I look at my own history I know there's a point at which I do value time off over a few more dollars in the paycheck and I get the feeling this is even more true for my son's generation. It's going to be interesting, indeed, to see how HR practices change to meet the needs of the millenials.
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