How Can HR Harness The Power Of Big Data?

Big Data is everywhere and is affecting all areas and functions of business – from sales and marketing and their sophisticated CRM and marketing automation systems to procurement and finance and their advanced vendor inventory management systems. HR are now readily assuming a strategic and business critical role, so it’s only natural then that HR would also start to see the same kind of technological progression as other business areas.

Having worked within HR I have seen and experienced the shift towards a more data driven environment. In particular there has been a wider introduction of analytics and metrics around business operations and performance. As a result HR teams are better placed to be able to analyse and make strategic decisions on talent acquisition, performance management, reward, compensation and workforce planning.

But Is That Enough?

The challenge then is how to make sense of the data that is available to you. Whilst HR are learning how to engage through people data, talent management analytics and reward systems (which are vitally important to finance and senior executives in making strategic business decisions) as a function they need to go further than that. It’s important that HR learns how to analyse and interpret data themselves through the creation of wider HR Analytics roles, rather than an over reliance on new technology and data platforms to analyse information.

Google have already focused on the importance of data in HR or ‘people operations’ as they call it. With Google’s capital and HR analytics roles they have been able to develop data algorithms to “systemically prioritise” their CVs. Google receives around 2 million applications every year so they needed something to give candidates a best in class experience that doesn’t completely reply on human interaction and over stretch their HR department. 

How Can HR Make Sense Of Its Data?

Google’s solution was developed with in-house expertise, but of course not all organisations will have the skills needed to execute this in-house. A solution is to acquire specialist tools and services that are designed to make sense of that data that HR teams have available to them. This is common-place within other business functions, in particular marketing where a range of services and tools aim to provide actionable insight into the wealth of data that their digital marketing data produces.

Many organisations are looking at how to harness data, and within HR this data can be used to source talent, manage rewards, and make better work force planning decisions. For instance there is software available to predict job retention and how likely an employee is to stay, alongside software that allows HRs various data platforms to “communicate” such as services from providers such as ADO, Oracle, Wordday and Business Box.

New Tools Doesn’t Necessarily Equal Better Insights

There is a danger through that in the rush to make sense of their data, companies buy expensive tools and data services without being clear about how to action the insights they provide. Internally, HR still need to learn how to make sense of the insights they get and know which metrics to focus on and how to drive increased performance against those metrics. Insight and understanding comes from shared relationship, not just numbers on a spread sheet and HR need to understand the reliability, validity and context of the data.

I’m sure we’ve all had an experience of seeing a significant part of the budget spent on an all signing, all dancing talent management, reward, learning and recruitment platform, only to pull the plug a few years later because you realised it is not measuring what you intended it to measure or it was unclear how to measure it’s impact on business.

HR Need To Get In Shape First

Before deciding which tools to purchase, HR need to start by getting the structure and communications right, and being able to work together collaboratively.

What’s fundamentally important is that both the business and HR have a clear understanding of the role HR is expected to play, and has established the foundations of working relationships with other business units. HR is changing, but the attitudes need to as well as we are no longer a Personnel department.

There are three key areas HR as a function needs to improve are:

1. Being truly collegiate with cross functional relationships
2. Understanding that data alone won’t solve anything unless we understand what we are trying to measure and how it can impact the business (sharing the information with the full spectrum of HR (Reward, Learning, Talent, Assessment, Recruitment)
3. Understand we can’t work in silo – especially with data

Is There A Need For A New Type Of HR Role?

Perhaps it would be worth considering creating singular or third roles within HR that embrace analytics? Now I am no data head myself (although because of studying Statistics and Analytics I know their worth) and as a result I know my limitations with that skill set. It’s a legitimate concern though that many HR professionals do not have a background in data analysis and so there is an obvious skills gap for those types of individuals. The first step then is to focus on creating HR Analytics roles that support in-house people metrics to drive business performance.

Every aspect of HR now can have a decision in data – when to hire, who to hire, what role to create, how much to pay, when to facilitate succession planning, when to open new offices. My observation is that although HR are well educated, professional and commercially astute, we are flooded with technological advances which varies across functions.  We are almost in an area of HR Business process re-engineering but what we are perhaps forgetting is to re engineer the relationships within and across HR.

What Do You Think?