In life, as well as in work, we’ve been told that it is best to keep things simple. And indeed this was the case before analytics entered the business world. Through the sheer power afforded by data, combined with the insatiable appetite of senior executives for competitive advantage, it seems as if there has to be at least four angles to everything. So whether it is about pinpointing the cause, predicting the probability, measuring the impact or modelling future scenarios, it seems that the days of viewing talent through the simple lens of reporting is no longer going to be enough. Binary assessment and categorisation of people, based on the belief that all employees are very similar, is being replaced with complex statistical profiling to illustrate the unique richness across our workforces.
What does this mean for the role of HR then? As the profession attempts to footnote everything from their reward strategies to their workforce planning forecasts with correlative meaning, for most it spells discomfort and uncertainty. That is because these more complex stories have more depth, which in turn creates more ambiguity and, crucially, more analytical processing complexity. Against this backdrop, it is understandable that numerically nervous HR professionals can sometimes see an unfathomable gap between the difference of wanting and finding insights.
This gap is highlighted in Deloitte's 2014 study into global HR challenges. Despite 86% of respondents recognising the emerging importance of HR analytics, only a quarter believe they are developing the appropriate capabilities to make the most of this new strength in the future. Asked what level of play they’ve reached, nearly 90% are still scrambling around in the lower echelons of basic reporting. Only 4% claim to have attempted to apply predictive analytics to a fundamental talent challenge.
Boiled down to the basics, analytics is not that difficult. At its simplest, it is just a case of taking some data (whether it be big or small), pushing it through an appropriately configured stats engine, and dazzling the Board with the subsequent insight. The component that is often missed, however; is knowing what questions need answering and where to find the data. Once that is figured out, it comes down to structuring the insights to tell a more compelling, interesting and objective story about talent and the impact on business success. This means we need HR business partners to be more inquisitive and experimental in their thinking. They have to become the talent architects of the business who are capable of selling their new constructs to sceptical customers.
With stronger lines of enquiry, the spotlight quickly falls on data. Here HR needs to quickly grasp the laws of the road and understand that if you feed rubbish in, you’ll get rubbish out. At a recent conference of leading HR professionals, in a room of nearly 100 people, there was universal agreement that data is the single most critical component of good analytics. Yet nobody had a formal HR data governance framework for managing quality and integrity. Add to this an unhealthy reliance on the Human Resource Information System (HRIS) data set as the sole contributing data source, it is little wonder that the resultant insights are rather uninspiring.
HR leaders also need to change their mind set and turn their functions inside out. HR needs to stop trying to use analytics to justify artificial constructs it has created, such as performance management, and start using analytics to hard-wire people to the commercial drivers within an enterprise. Finance doesn’t sit in the boardroom making a big play about its debtor management process – that’s a given. What it does, is show how capital investment activity is on track to deliver an internal rate of return equivalent to a 10% increase in market share. HR could do the same – if only it gave up trying to control what it can’t manage – such as people’s performance or even their motivation. Shift the focus to spotting, monitoring, profiling and predicting the commercial holy trinity of risk, cost and value of people.
Finally, HR and their strategic business customers need to realise that great talent analytics requires dedicated investment in terms of skills, tools and funding to accelerate capability beyond two-dimensional reporting. A new type of people analyst needs to be attracted to the profession. These individuals will most likely be part data scientist, part statistician and part talent manager – a rare and unique blend of skills that needs to be either cultivated internally or acquired externally.
Finding this skill, however, is only one part of the challenge. The second is keeping them. Motivating the new generation of HR analyst will mean stimulating the big questions, being prepared to let them do things their way and encouraging them to decipher the various levels of workforce complexity that are key to driving your future business success.
Laurence is a leader in HR analytics and a champion for insight driven transformation. Created first predictive analytics solutions over 10 years ago as a trailblazer for smarter talent decision-making. Main CIPD spokesperson analytics and media commentator