“People Analytics” for strategic human resource management

I guess we all know that getting the people thing right is totally critical to strategic success and to sustained strong performance. We can have all the great products, powerful marketing, clever strategies, fantastic action plans etc. we like, but if we don’t have the people and capabilities to exploit all that, it’s all for nothing. HR professionals have always known (of course!) that their “strategic human resource management” (SHRM) capability is massively important. But even they may not appreciate just how important!

Although we may think of organisational stuff as all touchy-feely – numbers matter! It’s tricky enough getting the right number of people at the right levels, in all teams, at all times. But we need people with the right qualities – especially with the skills and experience needed.

BUT (you probably saw this coming!) – the dynamic (time-based) challenges are huge. 

A simple example

A technology business has a growth opportunity, so needs more engineers over the next 3 years (quarters 12-24) – the dashed blue line. If the hiring and training keeps working like before, it hits its needs. but if the faster intake of new trainees and external hires raises turnover from 5%/quarter to 10%/quarter (hardly a dramatic shift in high-demand sectors), it not only misses its long-term aim, but actually goes backwards for some time!

People Analytics to the rescue

It turns out there is a strong professional community focused on exactly these challenges – the “people analytics” movement. 

The big time-based challenges

The main approaches to people analytics seem either to focus on isolated issues (e.g. how to raise your hiring success). Or, if attempting to tackle the bigger issues, they rely on the “usual suspects” like data-mining and statistical analysis.

But like all strategic challenges, initiatives and plans, though, successful staffing efforts and strategies are confronted with time-based complications, notably:

1. Every staff group is, of course, an “accumulating asset-stock‘ – so we have no control over its current quantity, only over the rates that change that quantity. We can’t decide to “change the number in that team from 20 to 40”. We can only try to alter the rates that change that quantity – hiring and promotion rates (In and out), and the loss-rate. (See What is a stock and why should I care?“)

2. The time-constants are huge. If we hired too few trainees 5 years ago, we will not (obviously!) have enough people now for jobs that need 5 years’ experience. And companies in many mature sectors share the problem of having big numbers of people nearing retirement who were hired decades earlier, with too few youngsters coming through to replace them.

3. Feedback effects are everywhere – and powerful. If we promote more folk to level 3, we empty level 2, raising the challenge of re-filling that level either by promoting level 1’s or external hiring … and if things get tough in level 2, we might lose more people, adding to that challenge.

4. Causal mechanisms reach into the outside world and back! If we didn’t hire from degree programs last year, we will be less considered by this year’s students – and next year’s and …

5. People will decide what they want to do! So we have little influence over many of the flow-rates in any case!

Why that problem above with the need for more engineers? Our existing engineers were in a steady organisational environment. Now that environment is changing, with a lot of youngsters coming in, external hires who don’t share the culture, the fear of more rivalry for promotion slots. And those newcomers themselves may be less loyal, seeing the value of their skills to other employers.

… and we have not said anything yet (though we can!) about the impact of all this on the experience of the team or on the consequences for productivity or the quality of work that gets done.

See how to build digital twin staffing pipeline models in our class 6 on modeling multi-stage resource-building challenges – along with marketing pipelines, product development and asset aging.  As a follower, get 1/3 OFF the price of this course – enter coupon code ‘blog33‘ at checkout. 

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