In the era of digital transformation, a well working team is oftentimes considered the most important factor for success. This holds true both for startups, as well as for the corporate world. At the same time, organizations, enabled by the latest technologies, strive to make data-driven decisions wherever possible. The goal is to find the right levers to achieve strategic company objectives with the least friction possible.
Why are people analytics gaining momentum?
Particularly for HR, these two major trends mean tremendous change as HR needs to strengthen its role as a value driver within organizations. As a consequence, applying people (HR) analytics is on top of companies’ people strategy agendas. People analytics is supposed to form the core element for creating insights and derive the right actions for all HR functions (recruiting, talent management, etc.). Therefore it’s one of the key drivers for the future of HR management and a huge opportunity.
This is also backed by a study from Deloitte when asking a large cohort of HR managers about important topics in the future of HR. While the majority ranks People Analytics as essential, in reality the implementation looks different. Companies are struggling with this shift towards meaningful data-driven decision-making.
What are the operational challenges?
This finding is also reflected by the feedback we’ve received from our customers.While customers are aware of the value lingering within their existing data, many have not been able to tap this resource appropriately due to various operational challenges.
Especially in the HR space, companies tend to use a variety of specialized software solutions, tailored to the needs of each user type within HR. Whereas talent management and feedback software are supposed to trigger the highest employee engagement possible, payroll software has a rather limited set of specialized users. As a result, companies often lack one single tool that integrates and harmonizes all their available data. Without this access, companies are essentially losing meaningful insights.
Customers who have managed to overcome the data silos revealed that they face challenges in analyzing it properly. In the past, profound analytical tasks haven’t been a focus for HR roles. HR managers either perceive it as very time-consuming to perform spreadsheet-based analyses or face challenges in procuring analyst resources to pull the needed reports directly from the data warehouses.
Even if companies are able to access and analyze HR data on a regular basis, trends are often only discovered in retrospect as analyses are not based on real-time data. Therefore, one major requirements of our customers regarding HR data is to enable predictive people analytics. This allows to proactively conduct long term analyses to anticipate changes and counter negative trends before they impact the company’s performance.
What’s your view on this topic? We would love to get your expertise and thoughts on this via a quick survey:
How can I manage the journey towards data-driven HR?
A major trend in people analytics is to move from big data to smart data. This development allows companies to get the most value possible out of their data. Given the different status quo of companies’ HR digitalization, we suggest to take a step by step approach to achieve this.
More forward looking analyses require a well-organized foundation (What is happening?). Based on this and with the help of tools allowing real-time analyses, one can then work on the diagnosis (Why did it happen?). Identifying the right drivers finally enables organizations to tackle the supreme discipline: predictive people analytics (What is likely to happen?).
Make sure your stakeholders understand where you stand as a company and what needs to be done in order to tap the full potential of what HR can contribute.
In our latest research, we also found some interesting insights we wanted to share with you. Depending on which step of the HR data process you are at right now, there are some insights for everyone:
Being able to access, connect and compare all your HR data sources and integrating all your existing HR systems into one dashboard.
Find out more:
“A big challenge is that many HR organizations don’t know where to get started, or even what skills they need.”
“54% of the sample stated that inaccurate, inconsistent, or hard-to-access data [require] too much manual manipulation”, as their biggest obstacle to achieve better use of data, metrics, and analysis.
Being able to easily analyze all you HR KPIs in real time, benchmark your data with the industry average and gain deeper insights into how your organization is doing.
“CFOs typically have a view across the organization, they can provide a perspective on what the business needs from HR and where to focus efforts. That information will help determine the data HR will need to collect and analyze.”
“The good news is that Big Data is making a difference in places and ways you might not expect, particularly in human resources. Companies are analyzing their employee data with workforce analytics to answer a variety of critical questions.”
The following article describes 4 approaches that companies should use while analyzing HR data: 1. Clustering, 2. Driver analysis, 3. Risk analysis and 4. Forecasting.
Predict trends in your company and take action before they can impact your performance.
“Predictive analytics, defined as the practice of extracting information from existing data sets in order to determine patterns and predict future outcomes and trends, predictive analytics doesn’t tell you what will happen in the future. However, it does forecast what might happen in the future with an acceptable level of reliability, and includes what-if scenarios and risk assessment.”
Could we bring your attention to People Analytics? Do you want to share your expertise and thoughts with us?
Read another interesting article about "Predictive Analytics: A Human Resource Big Data Business Solution" by Advance Systems.