Data-Driven Human Capital Decisions: Today's Human Resource Information Systems Make It Easier to Manage by the Numbers

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Sun Microsystems Inc., a Santa Clara, Calif.-based computer maker, wanted to know the results of a mentoring program it conducted for thousands of employees. A standard HR practice would have been to distribute a questionnaire to participants and draw conclusions from their subjective responses.

Instead, Sun conducted a statistical analysis of employee data--68 variables--looking for correlations between the program and promotion rates, salary increases, performance ratings and other factors. It studied data from a statistically significant sample of participants--mentors and mentees--and from a control group of employees who did not participate.

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By drilling into data, Sun gleaned insights it never could have gotten with any certainty from a survey. Among the findings were three conclusions that ran counter to hunches: Mentors benefited as much as or more than the mentees did; administrative employees benefited more than engineers; and low performers benefited much more than high performers. Sun used these and other findings to optimize its mentoring program for the future.

A small but vocal group of HR professionals, consultants and thought leaders believe it is time for the profession to adopt such analytical methods, which are widely used in other areas of business. Called workforce analytics, they drive data-based decision-making, which is more systematic than the gut feelings HR professionals have too often relied on.

"The next battleground for organizations is to address productivity, retention and employee acquisition by doing this kind of analysis," says Jim Bowles, vice president of workforce development at Cingular Wireless, an Atlanta-based subsidiary of AT & T Inc., in San Antonio. "We're moving toward fact-based decisions. The business demands it. Most organizations are numbers-driven, and HR must be able to produce reliable numbers and explain interrelations and how they drive decisions."

Bowles uses workforce analytics to study call-center retention, but the variety of uses is constrained only by the …