Should the People Analytics Function Report into HR or Enterprise Analytics?
Leading People Analytics teams are focussing more and more on delivering business value. In a recent study by Insight222 97% of people analytics leaders report to the CHRO themselves or into the HR function, and only 3% report into Enterprise Analytics. Some might argue that reporting into Enterprise Analytics would allow them more ability to deliver business value. But it’s not that simple.
Delivering business value means moving away from ‘serving HR’ and starting to consider how to connect with the real business opportunity. To do this, there are two forces that need to be finely managed:
1. Workforce data is unique and requires people that understand how to apply people data and work with the ethical nuances of workforce data
2. True analytics needs to be objective and not influenced by the answer that best fits the existing approach and strategy
The tension between these two forces is what creates the question. Speaking with the CEO of a large pharmaceutical company, we asked why he had moved a people analytics function into an enterprise team, to which he responded:
“I want us to get as close to a right answer as possible and not care what the answer is… we can’t do that if people analytics reports into its own function.”
If you are asking yourself this question, here are three important topics to consider:
1. Defining your customer is more critical than ever: It’s easy to start treating HR as the end consumer and lose sight of the business altogether
Leading people analytics teams spend time building a solid relationship between themselves, senior HRBP’s and business leaders. The relationships needs to be equal and based on a solid foundation of transparency and collaboration. If an enterprise people analytics team starts measuring itself based on things like HR SLA’s, you know this relationship is becoming more service focussed than value focussed. Building a really clear stakeholder map and engagement approach can help significantly to avoid this trap.
2. Influencing HR, when not part of that organisation is hard: Having impact from an enterprise level people analytics function requires a very strong leader
People analytics leaders already have a tough job with the best being technically advanced, strategically savvy and storytelling wizards. Overlay these skills with the need to influence HR to become more data-driven and self-reliant, without being part of their formal team, and the expectations on this leader are even higher. The advantage though is that you could have more respect from business leaders if you come from a general analytic function with other commercial colleagues, rather than from HR (which can sometimes be seen as less commercially savvy). Therefore, whilst it might be harder to influence HR, it might be easier to influence the business itself – and therefore deliver the value they desire. The critical thing is that this isn’t easy to influence HR ‘from outside’, but it is easy to fall into the trap of being a service centre to the HR function and lose the drive for business value.
3. Access to resources is better: Within an enterprise team, there can be better access to enterprise data, technology, and skills but People Analytics can become the ‘poor cousin’ to other analytics functions that are perceived as ‘more important’.
Leading people analytics teams foster a range of deep analytics skills. There is a big opportunity to share skills and knowledge when you report within an enterprise team – the same goes for access to and sharing technology and data. Your access to other business data, such as finance, consumer, and real estate, should certainly be easier. However, with People Analytics often being less mature as an analytics function (than say, finance or marketing), people don’t necessarily view people analytics as a place they would want to advance their careers. They might not want to share data, and this could end up isolating the team further.
As the data above shows, most organisations have decided to design the organisation with people analytics reporting into the HR function. The reasons for this are numerous:
HR usually owns the budget
Ethics for people data inside a company are important considerations that usually are handled better by the HR professionals themselves
People analytics explores the interface between quantitative, qualitative, and behavioural data – and the last of these is usually better handled by HR professionals
HR VPs want their people analytics team organisationally ‘close’
However, despite these points, and the data that is overwhelmingly in favour of people analytics reporting into the HR function, there is certainly compelling arguments for people analytics to report to an enterprise analytics function.
The important thing though, is to make the decision that is best for your company. Get that decision wrong and the team will find themselves in a difficult place to influence and operate effectively. Get it right and the opportunities are endless. All the elements for success need to be place for both scenarios – excellent leadership, strong HR support and an organisation that is truly committed to delivering business value through people analytics.
Interested to explore more?
We’re setting up a small group to explore this topic – people who are considering this move or have done this move and want to gather insights from peers. Get in touch if you’d like to be involved.
For more information on where the People Analytics function is best placed read Excellence in People Analytics by Jonathan Ferrar and David Green (Kogan Page, 2021) who explore this topic in more detail (pp 312-315).
ABOUT THE AUTHOR
Kate Marks is currently the Director of our Consulting business at Insight222. Her team work closely with clients to increase impact, value and focus on people analytics. Working with some of the mature people analytics functions as well as those companies just starting their journey, they bring expertise and leading practice to help design the processes and strategy to enable success. Kate has extensive experience as a people analytics practitioner and previously worked for PwC London and Sydney.
Insight222® Consulting use their deep People Analytics expertise to provide HR Leaders with support they need to build and execute their strategic roadmap to drive business value. They work with some of the most mature People Analytics functions as well as those companies just starting their journey with people data, to develop a strategic roadmap for your people analytics function with a clear case for change based on business value. Expertise leads everything they do and whilst they create time, space and structure that’s expected from excellent consultants, they will always bring leading practice to the discussion. To discuss your consulting needs in more depth contact Insight222® today