A lack of data skills is holding HR back from making strategic use of HR analytics. Building a “superhero” HR analytics team is the solution. Michael Carty reports from the recent CIPD annual conference in Manchester.
HR analytics offers HR a major opportunity to build strategic influence within the organisation, according to Annabel Jones, UK HR director at ADP. “To make the strategic leap, HR must lead on supplying people data to underpin real business decisions,” she told CIPD conference delegates. “Investment in analytics is not a nice-to-have for HR. It is an essential.”
People data and how to use it
The HR profession must act fast to take advantage of this window of opportunity, argues consultant Simon Walker.
“If HR doesn’t seize analytics and big data, another part of the business will,” he warns. “Finance is likely to come to harder, less people-oriented decisions based on the same people data.”
He believes HR distrusts data. It fails to understand the organisation’s business context and fears it will be judged if it tries to use data.
As a result, many HR departments limit their use of data to what he calls “the easy stuff” – reporting only on basic people metrics such as absence and attendance.
However, the biggest barrier to HR achieving strategic advantage through people data is the general lack of analytical or technical skills within HR departments, he says.
In most organisations, finance, marketing and “every department other than HR” have fully integrated data and analytics into their decision-making processes. Many of these departments are now moving towards harnessing insights from big data.
This means HR is fast running out of time to achieve strategic influence through the people data it has at its fingertips.
Six key skillsets for the “superhero” HR analytics team
Building a “superhero” HR analytics team is essential for HR to use people data and convert it into strategic actionable knowledge, says consultant Morten Kamp Andersen.
In his session on analytics and data-driven decisions, he took CIPD conference delegates through the six key skillsets required for HR to build the ideal HR analytics team.
First and foremost are strong psychological skills, to understand the insights about human behaviour and motivation within people data. “This is fundamental,” he says. “This is all about people.”
HR analytics: further reading
Skills in data management, excellence with numbers and statistics, creating visualisations and understanding the business are also needed.
Finally, the HR analytics team requires storytelling skills to land the message coming from the data.
“Data is not a language,” says Andersen. “You need to be able to explain why data is telling you what it’s telling you.”
The capabilities required to make effective use of HR analytics are rarely all found in just one person. They are also rarely found within HR departments.
“It’s hard to attract these people into HR, even in large organisations,” says Andersen. “Many companies don’t have a culture of HR talking data.” To overcome this, HR should form strategic alliances with finance and marketing, with the aim of accessing the analytical capabilities within their departments, he recommends.
The analytics team should then be allowed to grow organically, as its success creates a growing appetite for data. The ultimate goal is for it to establish itself as its own entity. “I think it should be a separate unit, sitting within HR,” he says.
However, HR does not necessarily need to assemble an HR analytics team before embarking on data projects.
In Andersen’s experience, HR departments that start by forming an HR analytics team make less progress than those beginning with a single individual. The most effective HR analytics work often starts with “just one guy that knows about data and stats”.
The most effective way to build a successful HR analytics team is to allow it to develop organically, he says. “People overestimate the difficulty. If you know someone who likes numbers and knows Excel, you can go a long way.”