Out of the wide range of HR software investments available, data analytics is attracting perhaps the greatest interest. In her latest HR Tech Talk post, Cath Everett looks at how HR can use technology to harness the power of “big data”.
In my previous Tech Talk, I looked at the vast sums being invested in HR software systems by employers, and why this should make it a great time for HR professionals to feel more love for the technology that serves them.
But are there any areas in particular where a little bit more understanding could help HR to stand out?
Rising-star investments in the HR tech world include anything to do with analytics and social media, which is growing at a rate of 10%, according to professional services firm Towers Watson.
Of those two, analytics and the growing prevalence of “big data” are perhaps the most exciting in terms of what HR can do with them.
HR hasn’t always had the data at its fingertips and often relied on gut feel” – Carol Haag
Employers now have access to huge amounts of computer processing power that makes it possible to take vast quantities of information – so-called “big data” – about the organisation and its employees, and analyse it using specialised workforce and predictive analytics tools.
These tools interrogate the data and connect different bits in different ways that might never have been thought of before. So they reveal new things, offering insights into what has happened in the past, what is happening at present and even what is likely to happen in the future.
Finding the link
Personnel Today’s recent roundtable discussion with recruitment experts highlighted this appetite for data. The panel discussed the importance of drawing insights from the many different data sources and how HR can use them to illustrate anything from performance to engagement or the link between the two.
Yet, according to the CIPD’s recent HR Outlook survey, while more than half of HR practitioners feel confident about using data and metrics to improve their department’s effectiveness, fewer than half said that they were able to draw insights from this data and communicate this to other people in the business.
But it is important to know that these insights equal power. You can use the information as the basis for making effective business decisions that help to influence the future direction of the organisation.
For example, by using data to identify patterns in this way, it becomes possible to get a clear handle on whether individual departments or job roles should be created – or got rid of, as the case may be.
It also becomes much easier to spot future possible leaders for development purposes, and even predict how successful they are likely to be.
More than a gut feeling
Carol Haag, an HR sourcing expert at PA Consulting, puts it nicely: “HR hasn’t always had the data at its fingertips and often relied on gut feel. But this provides new ways of looking at information that would have been struggle in the past.”
Again, this is not to deny the significance of the human element. Haag explains: “The data in and of itself doesn’t do anything much. It still needs someone skilled in reading it and applying it and feeding it into the conversation.
“Humans are still incredibly important – but these tools equip them with something they’ve never had before, which is powerful data that they can use.”
This, in turn, implies that simply ramming in a few analytics tools to work against your core human capital management (HCM) system and hoping for the best won’t really cut it.
Humans are still incredibly important – but these tools equip them with something they’ve never had before, which is powerful data that they can use” – Carol Haag
If you truly do want that board-level influence, you’re still going to have to network furiously with senior managers and win their trust by showing them that you know your stuff. Only this time, you’ll have a few cheeky little tools to help you.
Just as an aside, and before you get too excited, it’s still early days for big data HR projects, which are currently few and far between, according to Peter Cools, head of HR technology for Europe, the Middle East and Africa at Towers Watson.
So far, he knows of 15 workforce and predictive analytics initiatives going on in the banking industry, which is always at the leading edge in this area. But of course, where they go, the rest of us tend to follow so it is still worth thinking about.
And it is not just about slicing and dicing standard HR data fare such as absence statistics or turnover rates: what are the links with customer satisfaction scores? How does data from other systems amplify what the HR data tells us?
Jill Miller from the CIPD reckons this is where HR’s influence will come from: “Action around HR analytics is an essential way in which they can develop this commercial mind-set, inform the people agenda and increase visibility of HR’s impact on the business’s KPIs.”
For a profession that likes to talk about the importance of building credibility, getting a handle on this could put you ahead of the curve.