Scott Mondore, Ph.D. is co-founder and managing partner of Strategic Management Decisions (SMD), a boutique consultancy firm on HR Analytics. Scott has over 15 years of experience in the areas of strategy, account management, measurement, customer experience and organizational development. He is also an adjunct Professor of Psychology at the University of Georgia, Fairleigh Dickinson University and the University of North Carolina.
HR Congress CEO Mihály Nagy has recently interviewed Scott on the essence of Workforce Analytics and how the profession has been using and exploring its benefits. The first of the three-part interview with Scott Mondore focuses on getting evidence-based analytics right in an environment where HR is becoming increasingly driven by business results.
Contrary to some beliefs, Workforce Analytics is not a new phenomenon, in fact, it goes back as far as the early 1900’s when Elton Mayo used HR Analytics (resulting in the definition of the Hawthorne effect) to observe and analyze what really drives performance amongst factory workers. So, it practically started about 100 years ago, yet it has only been gaining momentum particularly in the last ten years. Your organization is specializing on the topic. Tell me about your background – why and how did you get started in HR analytics?
Well, I got started in it through the education channel of getting a Ph.D. in Industrial and Organizational Psychology. It had a heavy focus on not only behavior in the workforce but also statistics and analysis. And so that’s where the genesis of our business is, how you use statistics and analysis to drive business outcomes. Reflecting to your point, you are right, analytics has been around for probably over 100 years and the joke that we tell here is, that we were doing analytics back when it was just called research because that’s all that it is, it is research. It just has a much more fun name – now it’s called analytics.
We got started with our technology about three or four years ago because we saw a niche in the market. People were talking about analytics, but they really weren’t doing that, they were just running more reports. That’s how we got focused on how we can make analysis real for a front-line manager through technology – that’s where we got started. But the original genesis was the ability to really understand advanced cause-effect analysis, not just correlation.
A previous research by Visier in North America says is that the next generation CHROs definitely have to be data-driven, in fact, it’s a demand by business. What is the driving demand for HR Analytics amongst your clients? Is it more of an internal demand to look at skills, manage retention, compensation etc., or is it more of an external demand in terms of remaining competitive, attracting the right talent, growing the business in new locations?
Well, for our clients it’s all about driving business results. So it’s not just driving HR metrics or looking at compensation or driving activity, they really want to understand what we can work on with our people to drive sales or revenue or growth or productivity or even reducing turnover.
But it’s not really an HR-focused approach that we take, we take the approach of HR as part of and has the assets to drive business outcomes. They have business problems and they want to use their current assessments such as; employee surveys, 360’s, hiring assessments, you name it – to really understand what drives business results. Then use that type of prioritization, those specific skills that actually drive business results. HR does then what they do best, which is to build programs around business drivers versus just, you know, high and low scores, so that’s where the impetus is. But what’s great about it is once you understand the people drivers of actual business results then you can apply that to your recruiting process, hiring process, development process survey, even succession planning and exit processes. But you can’t really do any of those things really effectively unless you truly understand how they are driving business results.
Probably due to positive technological changes, much better quality data is easily available and is quite simple to manage from the data management point of view. So basically, the idea is that HR professionals have the right tools at hand. I’m just wondering in this case, how do you get HR people in organizations to take advantage of the right data and start thinking analytically?
Yes, I think with the rise in popularity, HR folks are definitely interested in being more analytical. One of the obstacles is that typically HR people don’t have a huge statistical background, whether it is educational or experience based. Now suddenly they are forced into this statistical situation where they need to be more statistically or analytically driven. So the way that we do it is we actually take a different approach, we want to use the most advanced analytics that we can, cause-effect structural collision model, and make it as simple as possible for all leaders in the organization, whether HR or front-line leaders to understand.
So the way that we help them think more analytically is to stop talking about driving HR metrics and start thinking about what the business outcomes are that you are trying to drive. Secondly, about what kind of data you currently have. Because as you said, everybody has a lot of data, the question is where the data is, how and how often it is measured, and whether it’s been measured properly.
We are really helping our clients to see that you can tie all of this data to the actual business results. I think that’s where the education comes in, people think that they only should slice and dice and analyze HR data, which has almost zero value in the marketplace. What they have to understand is all the data they’re collecting on their people has to be tied to business results and once they do that, then they are a useful entity in the organization and not just a cost center. They will have the ‘seat at the table’ because they’ll be talking about what they are doing in the context of driving outcomes.
We don’t expect our clients to become statistical experts and go back to graduate school for four years like we did, we just need them to become a good consumer of statistics and analytics to know that plenty of reports and data visualizations are not analytics, but tying their data to business results is really what analytics is, and how it can be successful.
Scott, you mentioned the terminology ‘cost center’ – and yes, HR is often looked upon as a cost center. What it means is that companies try to spend as little as possible on HR as a division, but if you really want to get analytics right, particularly HR Analytics right, you need time and resources. It certainly takes time to get the right impact and to show the right evidence. I never heard any HR professional saying that “I have so much time that now I really can dedicate weeks or months just to do proper analytics”, usually it’s the other way around, isn’t it? So how do you tackle the challenge of time and resources to deliver proper evidence based HR?
I hear a lot of advisers talking about ‘well you’ve got to build an analytics team’. But the issue with that is that, to your point, is that it’s very expensive to build a full-time analytics team internally who can understand data and present it practically. The second thing – is it really a full-time job? You might end up having analytics team to create projects to justify their existence. So unless you are very mature on the analytics curve you might want to consider other avenues.
Outsourcing, for example, can happen very quickly and at a reasonable cost. We do a lot of our projects in a matter of hours and days versus months and months and months. So to be able to take data that already exists from an employee survey or a 360, and bring in business data and show immediately where the priorities should be and where the potential business impact is, can be done in a couple of business days at this point.
So there is an opportunity for where the investment of being a cost center is very, very minimal on the analytics side, without having to build an entire team and a whole new infrastructure. The cost that you’ve ramped up is very, very minimal. And so that is another thing I think HR people miss, is that they don’t have to go and hire five data scientists tomorrow.
What they really need to do is hire one HRIS person who knows how to pull HR and HR data and then get it in the hands of people who are already in an analytical base to analyze the data. But to your question about the cost center, is that right now if you were to ask an HR person how much they spend on, for example, an annual employee survey, they can tell you the exact amount. However if you ask them, well, how much return on investment did we get that money, they probably couldn’t answer you if they’re not really connecting it to the true business outcomes.
Scott is the managing partner of Strategic Management Decisions (SMD) – an HR technology with the only patented survey/assessment tools that link data to business outcomes with customized action planning tools. Before SMD, he served as East Region President for a large survey/assessment company. Before that, Scott worked as a Corporate Strategy Director at Maersk, Inc. He also worked as an Organizational Effectiveness Leader at UPS, focusing on employee assessment and measurement. He is the co-author of “Investing in What Matters: Linking Employees to Business Outcomes” (SHRM, 2009) and “Business Focused HR: 11 Processes to Drive Results” (SHRM, 2011). Scott recently won the Walker Award for ‘best advances in state-of-the-are HR practice and thinking’ from HRPS for his article “Maximizing the Impact of HR Analytics to Drive Business Outcomes”. His “Predicting Success” was released in Fall 2016.