People Science: The Context
Article 5 in a series of 6
What should I do with my people data? What HR metrics or people analytics should I use? What reports or dashboards do I need? How do I interrogate interrupt the data? Is my cost per hire too high?
I hear these questions every day from HR and people teams who are starting the People Science journey. Unfortunately, there is no one answer to these questions. People Science is the extraction of actionable knowledge directly from people data through a process of hypothesis formulation and hypothesis testing within the context of achieving an organization’s business goals and strategy. There are no universal truths in People Science. The what, why, and how of People Science is unique to each organization and is dynamic, changing with the business strategy and goals.
For example, in 2006 most companies were growing rapidly and talent was in high demand. Low unemployment and tight labor markets gave people choices and organizations had to work hard to attraction and retain talent. In this environment, a people scientist may have been focused on how to attract high quality candidates. Two years later, many organizations had hiring freezes, layoffs, and contracting revenues. In this environment, a people scientist may have been focused on how to engage people during change and uncertainty. In many organizations, voluntary attrition was considered good, and even encouraged with voluntary separation agreements, as it reduced layoffs. Context not only determines the what, why, and how of People Science, it determines how data are interpreted. Context is how we assign value judgements to data.
In People Science, the ‘Big C Context’ should drive discretionary analysis and reporting (i.e. those not legally required). Context is the business’s vision, values, short and long-term business strategies and goals, from which, the talent strategy or people strategy is derived- the people component of the business strategy. The people strategy includes the vision, strategy, goals, and objectives- the foundation and guiding principles for the people function. People Science quantifies the people strategy, measures the current and future state, testing hypotheses on how to close the gap, and monitoring progress. For example, a people strategy could include a diversity and inclusion (D&I) component with goals for improving leadership diversity. The people scientist quantifies the current state of leadership diversity, determines key performance indicators (KPIs), analyzes people data to identify root causes for low diversity, and then works with the people team on initiatives to address the root causes. As initiatives are implemented, D&I KPIs are tracked and the people scientist determines if the initiatives are having the desired impact. If not, further analysis can determine why and corrective action taken.
People Science analysis projects derived from the people strategy is a top-down analysis approach. Unfortunately, many HR and people teams have not created a people strategy and/or aligned it to the business strategy. The absence of a people strategy is often the root cause of the ‘what’ questions. Lacking a people strategy does not mean there is no context for people scientists. A bottom-up approach starts with data exploration and pulls in context on a case by case basis.
For example, an attrition report at XYZ company automatically flags any values over 10% and flags a 25% attrition rate for sales associates in their Dublin office. The people scientist at XYZ will need to explore the context to determine if the 25% attrition rate is good, bad, or neutral given the business strategy and goals. If Dublin sales associates are aligned to a deprioritized market segment that is slowly being phased out by XYZ than higher attrition might be good, however, if they are a critical segment for growth, then high attrition is a significant issue.
Little c- context is used by people scientists to assign judgment values to specific people metrics and KPIs. It includes KPIs targets and value judgements that cascade from the people strategy. It also includes external business and economic data, labor market data, historical data, internal benchmark data, and external people benchmark metrics. In the XYZ attrition example above, the 10% attrition rate flag may have been set based on external benchmark attrition rates. External context, especially benchmarks, are important inputs into building and quantifying the people strategy as well. Benchmarks provide insights on how people data, metrics, and KPIs compares to industry and talent competitors and should be include in assessment of the current state.
The importance of context in People Science is frequently overlooked. Our information overloaded brains crave universal truths and platitudes. However, like the people in them, businesses are snowflakes, each with its own context. The application of People Science and the interpretation of people data adapts to the context it exists in.