Just because something can be counted, doesn’t mean it counts.
Albert Einstein’s words have struck a chord with Greig Aitken, head of people strategy and insight at the Royal Bank of Scotland (RBS).
RBS, under Aitken’s guidance, has long been wielding the power of data analytics at HR issues. Aitken began collecting HR data back in 2000 with the idea that the better the organization understood its employees and their motivations, the better they would perform.
But, simple data – big or otherwise – is not the answer, Aiken is clear that:
Data isn’t insight. What you don’t need in your organization is more data, it’s more insight.
And this is where many organizations come unstuck, he believed. They either fail to identify the kind of data that the business needs at all or they fail to present their information in a format that the business can relate to. Aitken advises:
Go to them with one page: here’s the problem, here’s my options and this is what we should do. Don’t go with a 36-page report. They don’t want the data, but the insight.
This insight needs to go beyond simple headcount information, but to try and measure the effect of people issues that are hard to quantify, such as engagement, leadership, culture.
Yet, even providing simple headcount information is hard enough in itself for many organizations. There often isn’t a common definition of terms between departments, as Peter Cheese, CIPD chairman, pointed out at the organization's recent conference:
HR and finance don’t have the same definitions let alone between organizations.
Above all it’s about attracting and finding ways to keep hold of the highest performing staff. Says Aitken:
Retaining great people is about joining up people insight with business insight.
By providing insightful information that can do that, HR can make it to the top table in their organizations.
Aiken believes that the financial crisis has forced many to invest in transparency, engagement and trust.
Ed Houghton, the CIPD’s research advisor for human capital metrics and standards, agrees that issues such as people and skills are valued far more highly than in the past.
There has been a radical shift from the 1970s, where the value was found in buildings, machinery, land – concrete items. In today’s knowledge economy, the value is in people. The problem is measuring that. Houghton says:
An investor will look at skills, knowledge, leadership. Investors want to look at sustainability.
The problem, according to Houghton, is how can organizations identify those assets:
Organizations are more aware where future value lies. People are our most important asset – but we need to clarify and classify that. If you can capture and understand that using analytics, then you can understand value.
Like Aitken, transparency is “hugely important” to Houghton. It’s not only investors, but regulators, customers, current and future employees who want a clear line of vision to an organization’s relationship with its workers. He says:
It’s important to share what we know. Too often, we don’t do enough to report our human skills. If you know more about an organization, about its leadership, then you can make better investment choices.
Leadership is one of the key metrics Aiken has identified in RBS. People simply want to work with good leaders, says Aitken:
Great people in your organization are fickle. They want to work with class A leaders.
Good leaders should then not just be measured on their financial contribution, but their contribution into creating an engaged team around them.Aiken pointed out that the breakeven point for a new manager to become productive is just over six months. And that the costs in time and money of building a new leader in-house are one tenth of the amount needed to hire a new leader.
So, using metrics to identify existing and future high-performing leaders can directly affect business competitiveness.
But what makes a good leader is constantly changing as the talent pool itself changes. The workforce is a mixture of a few old-guard traditionalists, boomers, X-ers, Millennials and the internet generation, born after 1996. As today’s boomer leaders give way to the Gen X leaders, the leadership profile will change.
Often insight comes from collating different types of metrics and data to create a coherent story. Joining together strands of metrics from its contact centers enabled RBS to identify the key to high performance. These metrics include:
- Leadership index
- Engagement index
- Customer focus
- Image and competitive position
- Managing people and change
- Efficiency and innovation
- Performance management and development.
These are mapped with the typical contact center business metrics, such as average call handling time, hold time and calls per hour. RBS found that the three centers with the highest scores across the seven people measures also scored highest in the on the business metrics.
Looking at customer service across the business units, RBS has been able to prove that staff engagement levels had a direct impact on customer service, with a 27% difference in engagement between top and bottom performing business units.
Engagement, leadership and culture are the three key elements of RBS’ human capital strategy. One of the reasons Aitken believed analytics in these areas has worked so well for the company is because it has built and kept the intellectual capital in house rather than buying it in. As Aitken says:
I started it and I still own it.
RBS is highly regarded as an early and innovative adopter of HR analytics. The clear message from Greg Aitken is that what’s important is joined-up analytics.
It’s not just one measure that’s important, but a series of HR metrics viewed together business metrics that creates a complete picture.