HR needs to improve people analytics skills to gain credibility

HR needs to get a better understanding of people analytics to build capability, says DDI

HR’s attempts to adopt people analytics are “increasingly failing”, according to a global leadership survey published by DDI.

According to its Global Leadership Forecast 2018, produced in conjunction with The Conference Board and EY, HR has failed to develop its digital skills in pace with advances in technology, and its stock has fallen as a result.

The report found that companies that excelled at people analytics, which it defines as “the systematic identification and qualification of the people drivers of business outcomes”, were more than three times more likely to outperform their competitors.

Breaking down people analytics into component areas, almost a quarter (24%) of organisations were deemed to be succeeding at tracking efficiency metrics, and 22% at benchmarking internally.

However, just 11% were effectively benchmarking externally, and 16% had experienced success with data visualisation and storytelling, said DDI.

“Our data shows that it’s likely a case of the analytics bar rising faster than HR can leap over it,” it noted. “Despite low success rates, 70% of HR professionals reported an increase in their analytics skills and data-driven decision making. Yet, this clearly isn’t enough to keep pace.”

DDI’s research revealed that 41% of HR professionals were considered “reactors” by other senior executives, while 48% were deemed “partners” and 11% “anticipators” who develop strategy proactively in line with the business. In 2014, when this survey was last undertaken, 20% were considered anticipators – suggesting HR’s reputation has taken a hit.

HR also needs to take a broader view of talent management and leadership development, DDI’s survey found.

As digital disruption continues to transform the workplace, we’re facing a massive leadership shortage worldwide.”

Organisations that extended development of high-potential employees below senior level were 4.2 times more likely to financially outperform those that take a narrower view of the “type” of person that has leadership potential.

Applying data analytics to diversity could deliver real business value, the report adds, by demonstrating how greater diversity in leadership can positively affect the bottom line. It found that organisations with more women in leadership positions were 1.4 times more likely to have sustained, profitable growth.

Only 14% of CEOs questioned for the report felt they had the leadership talent to execute their strategy, and almost two-thirds (64%) cited developing leadership potential as a priority.

“If you’re deeply concerned about your organisation’s lack of leadership capability, you are in the clear majority,” said Evan Sinar, chief scientist and vice president of DDI. “The tremendous amount of data we collected in this study shows that as digital disruption continues to transform the workplace, we’re facing a massive leadership shortage worldwide.”

The survey drew on data from more than 25,000 leaders and around 2,500 HR professionals across 2,488 organisations worldwide.

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