Merck KGaA: A Case Study for Organization-Wide People Analytics
Kai Beckmann, Member of the Executive Board at Merck KGaA, Darmstadt, Germany, states that in the industrial sector, people, machines, systems, logistics, and products are communicating and collaborating with one another – a revolution known as industry 4.0. Everywhere, applications are accessing data from a wide array of sources such as social media, credit cards, customer loyalty cards, smart metering systems, and personal aid devices – all for the purposes of data analysis.
Merck KGaA, a leading science and technology company in healthcare, life science, and performance materials, has multiple digitalization initiatives driving innovation from research to manufacturing. The company is also harnessing digitalization to drive innovation in the planning and management of one of its most important assets — its people.
Digital HR and people analytics are key terms in this transition where Merck KGaA is using data to glean insights into all aspects of HR work, which can then be applied to tasks such as workforce planning, talent management and even the gradual optimization of day-to-day operations.
“At Merck KGaA, it’s not just HR doing analytics for HR. Our people analytics aims to increase the quality of people capital and the organizational decisions we make,” said Anna Lena Fritzsche, Organization Development & People Analytics Expert, Merck KGaA Germany.
3 Reasons Driving Merck KGaA’s Need for People Analytics
Merck KGaA looked to people analytics technology for three reasons:
- The team was struck by how many people were building reports from process data. Rather than counting heads to monitor reduction in headcount, they wanted to see an increase in the number of employees working on reporting and analytics with an improvement in the overall quality of the data. Instead of less reporting, they wanted increased use of data and analytics to drive workforce decisions.
- Merck KGaA wanted a single source of truth. They had a myriad of regional systems and managers who were picking and choosing the data they wanted. By moving to global processes, everyone could leverage the same data and definitions. For example, the definition of talent should not vary between China and Germany.
- The team recognized that certain assumptions about talent trends were not based on data but rather on “gut feelings.” For example, many managers believed that talent was not being rewarded, performance was not impacting turnover, and that the wrong people were leaving. The team used analytics as a driver to change mindsets and to encourage leaders to make data-based decisions.
The Visier technical implementation for Merck KGaA consolidated more than 45 million single data points which included SAP, SuccessFactors HR Suite, and an employee engagement application.
Managers and HR colleagues can access information on their more than 50,000 strong workforce based on user-friendly and non-technical questions that focus on organization and people management. For example: “How are demographic developments impacting our organization?” Then they can slice, dice, and compare the data based on the results of the entire company, resulting in a new standard of transparency.
Organization Development Leads the Charge to Achieve Value Through Analytics
Merck KGaA’s combines Organization Development (OD) and People Analytics to deliver practical and differentiated support to the business. As a result, Merck KGaA is enabling almost 3,000 managers and hundreds of HR employees to access and use real-time data for decision making using Visier.
They can access robust data on headcount, diversity, turnover, performance results, and compensation, so they can make decisions on a wide variety of issues to improve performance and optimize organizational structure.
“You cannot make decisions based on data alone in the same way you should not make decisions based only on gut feeling. It’s important to put the data – now easily accessible with Visier – in the right context to be able to drive better decisions,” added Fritzsche.
Merck KGaA emphasizes that the value of investment is not a monetary value, but a strategic value. With Visier, HR business partners are transforming from information providers and report generators into data-supported consultants who are now strategic advisors to business managers.
People no longer have to go with a gut feeling on decisions, but instead can rely on data. Merck KGaA believes it has increased the quality of decisions with Human Capital while professionalizing HR as a function.
Read the Merck KGaA’s full case study to learn the roll out and internal marketing strategy they used to implement people analytics across their global organization.
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