By Olivier Meier, Mercer
In my conversations with top management, I sometimes hear that the issue with HR metrics and analytics is not so much getting them but rather their relevance for the business. In fact, some managers complain about HR information overload and the perceived lack of maturity of HR analytics compared to analyses from other departments such as finance and marketing.
To be fair, let’s bear in mind that top management is much more likely to come from finance or line management than HR, and there is often a degree of “cultural misunderstanding” when HR tries to communicate with management and get involved in strategic business discussions.
These managers have a point, however: jumping to conclusions and trying to come up with numerous comparisons and analyses is always tempting when starting with HR and talent mobility analytics. The first step should rather be to take the time to analyze what the company is trying to achieve with talent mobility and challenges existing assumptions.
Dispelling the illusions of mobility management
We tend to think of mobility management as a rational process and assume that management has a good understanding of its implications, costs, and consequences. We often believe that international mobility is good for an employee’s career, and that we have a good understanding of the costs and drivers of mobility.
The reality is far less certain. An assignment can be a great opportunity for employees, or it can hinder their careers (“out of (HQ’s) sight, out of mind”) and cause them to leave the company upon repatriation due to a perceived lack of opportunities. I have also discussed in other articles the role of international assignment to foster diversity within the international workforce: a mobility program can foster diversity and gender parity at senior managerial levels, or, on the contrary, it may slow down minorities’ progress towards the top if they don’t have access to the right assignments.
The same logic can be applied when questioning the benefits of mobility for companies: some assignments can be successful for the employee but detrimental for the company. A typical example would be an assignee who performs well while on assignment but fails to train the local workforce or create the conditions for a sustainable long-term business in the host location. At first glance and based on the individual’s performance the assignment was a success. In reality it constitutes a missed opportunity for the company and a wasted investment. This scenario is fairly common, because few companies have clear definitions of what constitutes a successful assignment and many don’t determine assignment-related goals for their expatriates (as opposed to individual performance goals).
The message is not meant to be a negative one. It is a reminder that some international assignments can benefit some employee groups under specific circumstances but not all of them. It is an encouragement to dig deeper and uncover the conditions and circumstances that make an assignment beneficial for both the company and the assignees.
Managers involved in cost management and supervising mobility processes also have to navigate a grey area based on fundamental assumptions, subjective judgements, and limited factual information. The question of cost is often formulated in terms of direct budgeted costs as opposed to total direct and indirect actual costs. Furthermore, the question of value is often absent from discussion or at least not accurately measured. More generally, the perception of top management about mobility reflect their previous experience with assignments: some managers have been assignees themselves and can be very supportive of it without necessarily checking all the facts while other might forms their negative opinions based on only a few unsuccessful cases they have heard about or even clichés (“expatriates cost three or four times more than locals”).
So the first issue that metrics and analytics should address is not so much to find innovative solutions to manage mobility but to help us revise our assumptions about assignment management. In other words, can we bring more transparency to processes and objectivity to decision making?
|How we think it works…
||…How it actually works
|Mobility is good for the careers of employees
||Mobility could benefit or hinder an employee's career
|Rational decisions about cost
||Limited understanding of overall cost and value
|Mobility is driven by business needs
||Lack of synergy between mobility and strategy
|Management makes informed decisions about mobility
||Management's view of mobility is very subjective
|Assignee engagement drivers are clearly identified
||Engagement drivers can be overestimated or underestimated
Exploring our toolbox
The words metrics, KPI, and analytics tend to be confusing and used interchangeably. We can use three simple definitions to clarify what tools can be used:
Metrics are quantifiable measures designed to assess and track a specific process over time. Common examples would be the number of assignees in a given locations or how many exceptions to the policy have been made during the year.
Key performance indicators
Key performance indicators (KPI) are sets of measures designed to evaluate the performance of a company, a team, or an individual against predefined goals. They are focused on the question of efficiency and performance. A KPI could be about setting a maximal number of exceptions for the year and measure the performance of the mobility team.
Analytics goes further than simple measurements describing the past activities of the company and aims to understand why specific outcomes happened and how these outcomes could change in the future. Analytics can be descriptive but also predictive: for examples, which assignees are more likely to be successful on assignment or to request exceptions?
These three types of measurements share a common objective: drive the business forward by fostering the right behaviors from all mobility stakeholders.
While there is an apparent hierarchy in the complexity of these types of analyzes, it doesn’t mean that a company’s journey should be a linear one starting with basic metrics and automatically leading to advanced predictive analytics.
How far do we want to go?
Getting the basics right is a good first step. It implies tracking assignments and having a basic understanding of direct costs with simple metrics that don’t requires analytics knowledge. A first version of a mobility dashboard providing simple indicators can be designed.
Before rushing to the next steps, talent mobility teams should ask themselves what is relevant for their organizations. Not all companies have an immediate need for advanced predictive mobility analytics and, more importantly, few teams have the resources and the skills to produce them. The question of the next step on the journey is therefore about finding a compromise between the scope of the analyses (adding more metrics) and their depth (introducing analytics).
For some organizations the priority is to expand the scope of the analyses to capture all types of mobility and introduce a greater transparency through numerous metrics. The focus is on descriptive reporting rather than on determining causation. This approach does not require advanced analytical skills and can benefit the companies in terms of compliance and accuracy of reporting.
A different path would be to dive deeper into the analytics to explore the plausible causes of trends for selected types of assignments or groups of assignees. The objective is not to cover everything but to try to identify discrepancies that would indicate potential issues.
A more ambitious long-term goal would be to combine scope and depth to come up with detailed prescriptive analytics – a goal that requires much more resources and upskilling.
Tips to get started
Data management is one of the greatest challenges when getting started with metrics and analytics. Capturing the right data, cleaning it, and ensuring consistent labeling will require significant efforts. The objective is produce a data catalogue designed to answer these three questions:
For example, if we are talking about mobility premiums, what does it cover and what is its purpose?
The mobility team might be clear about what a mobility premium is but other business units might label it different. It might be called “foreign service premium” by American colleagues and listed in payroll as “other incentives” in the payroll system. In some countries it might be combined with other payments. It is imperative to be consistent with labelling before starting to analyze the data.
Many pieces of information required by the analyses will sit in databases not managed by the mobility teams: they can be located in the talent management database, in the various payroll systems or even be managed by finance – not to mention that pieces of the puzzle will be spread among geographies.
The data catalogue aims to bring clarity and consistency to the data. It requires on-going updates and should be supervised by a data auditor whose role is to ensure consistency of the data going forward.
This data management exercise is crucial for many analytical but also for reporting activities. It should be at the top of the team’s mind even if the company is not ready to move fast with analytics. Requests for consistent data will come from management and if no preparation has been done it will be a daunting task to perform analyzes. Rigorous data management is a priority for companies and an investment for the near future.
Reaching out to other departments
While it sometimes possible for mobility teams to design their own metrics and analytics, analytical teams can benefit from cross-functional input and expertise:
- The IT department is an obvious first point of contact and can help understand to what extent the company’s systems are integrated, how data can flow between business units, and what manual input will be required.
- Most HR professionals are now familiar with data privacy issue. It is however important to remember that moving data across jurisdictions and combining pieces of information during the analysis process can result in personal data privacy breach and compliance issues. Contacting the legal department is an important step before starting to compile and analyze data.
- Reaching out to other departments is also useful: they can provide assistance and expertise but also inspiration about what should be measured and how. Finance can provide input about alignment between analytics and business objectives while marketing can provide insights on capturing internal customers input and use visualization to optimize the presentation of the results. Beyond practical assistance, talking to them can also provide insight into the company culture and the type of analysis that resonates best with top management.
Focus on what matters
Measuring for the sake of measuring or measuring purely from an HR perspective are two cardinal sins of people analytics. The success or failure of early analyses will influence the perceptions of mobility analytics within the organization. The focus should be on a few important measures, identified by management as priorities, and that can lead to actionable results.
Management will probably start asking about benchmarking. For example, “What is the typical turnover for expatriates?” Benchmarking can help with some issues but more often than not, comparisons will be meaningless or inaccurate. It’s difficult to cut and paste metrics and analytics from other organizations.
The objective should rather be to find the baseline for your organization. Identify trends that are specific to the organization over a period of time and focus on deviations from this baseline that could represent problems. Spot checks may skew the reality of the situation, because factors such as luck and unforeseen events can influence the short-term performance of an assignee or a business unit, so instead measure over time to get a more accurate understanding of the company’s mobility trends.
The metrics and analytics journey is more a marathon than a sprint. The value of analyzing data comes over time. Constantly refining the analysis and adding new information is part of the journey. Metrics and analytics are about bringing transparency and trust around mobility activities through a persistent and consistent approach.
While many talent mobility team still have to manage their day-to-day activities and have only limited time to look into metrics and analytics, it is worth starting the journey early and make the necessary preparations for more advanced analyses. Teams who start using metrics and analytics are in a good position for future strategic discussions, and it also makes their job easier when trying to implement new policies, processes, and more generally when communicating with top management.