By Vidal Ferreira
Can Big Data in HR really be a game-changer on the quest to impact the bottom-line?
It’s not an exaggeration to say that lately the term “Big Data” has been overwhelming the headlines, whitepapers, classroom as well as boardrooms around the globe. Putting the “trend-ism” aside for a moment, answer this: How can Big Data in HR (aka Talent/HR Analytics) really make a difference to the organizations’ bottom-line? Here are a few: by taking advantage of analytic tools and techniques, organizations can develop a “people-model” approach, and understand how people-related factors have a direct impact on the business results. Additionally, assess potential organizational risks, employee engagement drivers, and leadership pipeline; moreover understand the workforce gap that might endanger the organization’s strategic intent.
Bersin & Associates in “Making Sense of BigData in HR” shared a simple, yet practical approach in categorizing maturity levels for HR Analytics, which I personally like because it conveys how organizations gradually evolve from highly scalable reporting towards advanced analytics.
In spite of the popularity of Big Data, a recent research by CEB stated that last year (2012) only 15% of leaders changed their business decisions because of HR analytics. Well, clearly not the impact we expected to have.
Because of its perceived complexity, and sometimes daunting statistical terminologies, we might think that turning data into valuable insights involves adopting the latest-greatest technology and analytical techniques, but sophistication alone does not guarantee we can influence business outcomes. The key driver for outcomes through analytics resides in HR’s abilities to ‘properly and timely’ apply talent data towards solutions addressing business challenges, turning data analysis into insights enabling improved decision making and providing the needed support to effectively act on them. An article published by the Harvard Business Review: “Good Data Won’t Guarantee Good Decisions” illustrates spot on the matter.
Some researchers suggest that HR Teams that improve the application of business meaningful analytics generate nearly 3 to 5 times the analytic impact in comparison to direct investments towards increasing data sophistication alone. The message is clear: your current HRIS tools, or even excel might do the job, lack of business acumen and strategic thinking won’t fly.
There are few other get-it-done points related to enabling technology capabilities, but here are a few other aspects to help you succeed on your exploration into higher levels of talent analytics:
First (and foremost), start with the problem, NOT the data – Begin by asking what big decisions do you need to make? What sort of problems you must solve? Starting with the data might set you up for an endless task, so prioritize analytics around critical business questions, not benchmarking. If your company is in an industry where gender diversity is not a reality for now, but other companies are doing it – keep your eyes on the ball, you need to stay relevant.
Second, Got Talent? – Make sure your HR staff has the KSA to apply business judgment to the talent data, and let’s not forget challenge leaders’ assumptions. You don’t need Data Scientists for the job; a well-organized HR Analyst can deliver results just as good, as long as there is “curiosity”. Yep, you heard me right – it won’t kill the cat this time. Curiosity is seen as one of the most sought after abilities for data analysts – read “Breeding Data Scientists”. As your analytics model matures, you can think of upgrading your team’s skills accordingly.
Third, last but by no means least – boost the credibility of your talent data by working in partnership with leaders and other functions to interpret analysis and reach the right decisions together – avoid the urge to rush to, sometimes ‘half-baked’ solutions and give HR directives. Working closely with Finance for instance, with whom HR shares similar and interconnected mandates will make your analysis stronger by creating a direct and undeniable link between financial and talent metrics – apart from lots of learning. That will make easier to tell a story and get buy-in from your business leaders. Towers Watson wrote an interesting piece about the benefits of such collaboration “HR and Finance Partnership Opportunities”.
Talent Analytics alone is considered new heights for HR – the perceived transition from “art-to-science” is a big step towards a more evidence-based culture for human capital strategy. Utilizing analytics results as input for Strategic Workforce Planning for instance, only endorses that full alignment with the business strategy will ensure HR strengthens its position as a true strategic business partner.
These are unknown waters for HR though, therefore caution, consistence and business orientation are key to truly make a lasting business impact capable of not only guaranteeing a ‘seat at the table’, but that the role is kept relevant and stay there.
I will speaking at the Workforce Planning and Analytics Conference in Dubai in January 2014.
Vidal Ferreira is a Strategic Workforce Planning & Analytics Consultant with Saudi Aramco. He has over fifteen years of a diversified Human Resources experience with extensive international exposure across six continents. Having lived in over seven countries throughout his career, he is considered a truly global mindset professional.
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