As a company grows, it can become increasingly important to ensure that the daily running of the business is as simplified as possible. However, even in today’s modern technological times, the vast majority of companies are still using outdated methods for managing employees. As human resources departments face increasingly complex business changes, the use of data analytics can make a significant difference in a company’s employee quality, as well as the overhead spent on hiring, training and even retaining good workers.
In the past, many companies made the majority of their hiring decisions based on a couple of basic things. First, HR professionals reviewed stacks of resumes, setting aside the few that stood out among the rest. Then, they scheduled an interview with each potential new hire. Whether the interview process consisted of one or multiple face-to-face interviews, the hiring manager was still faced with a huge amount of responsibility in choosing the best candidate for each position almost solely based on their own personal instincts. Data analytics, however, enables the HR department of a company to make decisions based on specific data rather than the candidate’s appearance or personality traits.
Advances in technology have transformed the role of human resources (HR) professionals over the past 50 years. Today’s HR specialists are expected to take on strategic planning that adds value to the company’s bottom line — a big change from HR’s early days of basic data entry.
In the very near future, the role of HR will shift again. While strategic planning will remain at the forefront of HR responsibilities, rapid changes in technology are revolutionizing the way strategic decisions are made.
Linking Data Analysis to Strategic Planning
In a global survey of C-level executives, researchers at KPMG determined 82 percent of organizations plan to increase their use of data analysis to make human-capital-related strategic decisions over the next two or three years. Evidence-based HR will be standard practice, and HR professionals without the skills needed to analyze big data and apply findings to strategic planning will find themselves left behind.
One of the key imperatives from the C-suite for HR this year, according to the CEB’s Leadership Council Research, is to increase the influence of HR data in the enterprise organization.
In fact, developing and applying measurement strategies that “ensure efficiency, effectiveness, and business alignment” is among the 10 best practices of “high-impact HR organizations,” according to research from Bersin by Deloitte.
Yet only 8 percent of senior HR leaders “believe they are getting returns on their talent analytics investments, and only 15 percent of business leaders have changed a decision in the past year as a result of data from HR,” according to the CEB report.
It’s a sad irony, considering the mountain of people data at HR’s fingertips.
Deloitte’s recent report, “Global Human Capital Trends 2015,” is a wake-up call for HR leaders who are paying attention. For starters, the report ranks learning and development as the third most important talent management challenge facing business this year (the most important challenge was culture and engagement, followed by leadership).
But while three times more companies rated learning and development as very important this year compared with 2014, only 40 percent of respondents rated their organizations as “ready” or “very ready” in learning and development in 2015. That compares with 75 percent in 2014.
What that means is that while we keep hearing about how rapidly business is changing and how HR is transforming, HR continues to fall further behind. HR leaders need to take stock and decide what role they’ll play and how they’ll deal with the changes.
One part of the problem is that HR is being inundated with data, and the C-suite is asking HR to step up and play a more strategic role. But often those skills are not necessarily in HR’s wheelhouse. More to the point, more data is rarely the answer.
Ok, we have all heard about Big Data. But we leave the techie stuff up to our highly skilled IT folks, in order to tame those massive volumes of information so we neophytes can make sense of it all. Enough has been written about the value of Big Data, so we won’t repeat the obvious here. The cold hard fact is that Big Data, when fully understood and properly analyzed, is a game changer for many HR organizations.
That’s just great when you have a fully staffed IT department waiting by the phone for you to call with a new analytics project request. Oh, they are busy right now? And maybe for the next few weeks or months? Sound familiar? Unfortunately, those of us that crave that big data analytics value proposition just didn’t graduate from college with a computer science degree. Humanities, psychology, business, accounting, maybe. I don’t know about you, but my form and analysis professor (music major here) never mentioned Big Data. Not once. Sonata Rondo form structure, yes. Big Data, no.
To be clear, serious analysis like that discussed in LBi’s recent whitepaper “The Power of HR Analytics in the Quantified Organization”, requires careful planning and execution. In order to answer tough questions such as “What drives high-performance sales teams?” “Who will be our best leaders?” “How can we change behavior to improve customer retention?”, we need IT to be all-in with HR. Big Data analytics in HR must encompass more and more non-HR data sets such as sales and supply chain data. Additionally, as the whitepaper suggests, by embedding these services within business process applications, real-time analytics with current data can readily accelerate management and executive decisions, thereby truly creating a competitive edge.
However, we may just occasionally be forced on our own to jump into the Big Data pile heap and figure it all out. It can be done. Trust me.
The answer lies in Microsoft Excel’s glorious Pivot Tables and Pivot Charts. Just one slightly techie skill. Not too much to ask.
What does the datafication of HR mean to you? What about for your organization? How do you think the role of HR technology has changed to meet the demands of the quantified organization? Which trends in HR technology do you think will have the next most immediate impact on HR practitioners, their organizations, and their employees?
How the datafication of HR fits into the quantified organization is the focus of a new paper from LBi Software in which several observers of the HCM space weigh in on this timely topic. In a nutshell, here are my thoughts on the subject, drawn from the paper’s conclusion:
- The first important thing for HR to have when it comes to using big data is a goal. Yet having a goal for big data — having a project, a hypothesis, a strategic business pain you want to understand more clearly — is probably the most overlooked element when an organization of any size sets out to develop its people data through new technology.
- The second important thing HR needs if it wants to fully leverage big data is the necessary tools to analyze the data from throughout the organization — not just from HR’s people data.
Without those two linchpins, the power of HR technology and its trends for the future will fall short of expectations.
LBi sought insight into what HR leaders ought to be thinking about when it comes to using more-powerful tools for gathering and analyzing data; how HR technology has evolved as part of the growing demand for people data to help drive business decisions; and what HR technology trends will have the most immediate impact in the datafied organization.
We reached out to five engaging and diverse industry thought leaders: