Insights & Ideas

Costly Barriers to HR Analytics

HR professionals need little convincing of the power of talent analytics. They recognize that insight into employees can directly impact the business bottom-line. The whole process can also boost their credibility in the boardroom and help bury their reputation as a cost centre that provides little business value.

Quite simply, talent analytics is a game changer for HR professionals.

But while the interest is certainly there, the expertise is not. According to Deloitte’s 2014 Human Capital Trends survey, 86% of organizations do not have HR analytics capabilities, while 67% describe themselves as ‘weak’ at using HR data to forecast workforce performance.

The problem with analytics, then, lies not in whether or not to use them, but where to start, how to do it, and who should do it.

Here’s some of the common obstacles HR professionals face.

Skills and culture

Research from IBM’s Smarter Workforce found that the biggest barriers to implementation were a lack of understanding and skills. While HR people are used to being presented with employee data, analytics is a black art for many. HR professionals entered the profession because they were interested in people, not statistics, and few have any kind of analytics or statistical background.

So it’s vital that HR identifies the skills and capabilities required. Look to bring in experts from other parts of the business to build up the internal HR expertise. Marketing, for example, are far more used to analyzing data to inform their decision making. These HR analysts need to be able not only to understand the data and analysis, but importantly, they need to be able to understand the people agenda.

While most see the power that people analytics can bring, some traditionalists may still be a little daunted and sceptical about its benefits.

For many organisations, the problem lies deeper than a lack of analytics skills, as there’s a lack of an analytics culture across the company. Training and development are the key tools to address this to help shift the company culture.

If your people analytics initiative is going to be transformational, then it needs the full backing of the executive team, and not just within the HR department. This transformation is likely to happen in small steps. These small steps need to be celebrated, reviewed and the process improved.

What do you collect?

Many companies have been collecting people metrics for years; the problem is they are not necessarily collecting the right metrics. All too often, their focus is on collecting basic transactional data: pulling together metrics on diversity, turnover and engagement. While this may be useful data for the HR department, it does not provide the kind of insight that plugs directly into the heart of business goals. What the business needs is insight into what it needs to do in the future – not what it has done in the past.

An Economist Intelligence Unit survey, commissioned by KPMG, found that 85% of its 418 global executive respondents said their HR team does not provide the kind of predictive insight they need.

You have to start somewhere. So decide which are the main business pressure points: such as why staff is turnover is high or identifying who the top performers are.

If top performers is the focus, then you would want to try and find out why – where did you recruit them, what training, what kind of managers or supervision did they have? Then rather than present this in purely numerical terms, HR professionals need to use those data points to create a persuasive story – it’s insight that the business wants, not numbers.

Data is not only growing all the time, but also the type of data is expanding. HR analytics will increasingly need to look at social analytics and tools as well as data from mobile devices. IBM’s Smarter Workforce institute also mentions other areas such as neuroscience analytics, cognitive computing and the integration of labour market information and sensor analytics, as other sources of data that businesses will be using in the future.

Where is it and what state is it in

After skills, the IBM Smarter Workforce survey identified the ability to get to data as the biggest barrier to implementing analytics.

It’s certainly not a volume problem. Most organizations already have a lot data on their staff. The problem is that it’s often in separate silos, with training information held in a separate learning management system (LMS), for example.  Data quality and access are key problems, but there are data management tools out there which can help.

It sounds like an impossible mountain to climb. But the sooner HR professionals start climbing those foothills the better. No one is anywhere near the summit yet, so you will be in good company.

The great thing about using analytics is that you can quickly begin to see results. According to the international IBM Institute for Business Value study, 63% of executives said they had seen a positive return on investment in just one year.

HR already has an awful lot of data at its fingertips. The key is to be able to link that people insight with business data.

 

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