The future of HR is with analytics – everybody knows that. How to leverage this analytics to drive business growth is now on top of every CEOs and CHROs’ minds. Every company is sitting on a huge data mine where every day increasing amount of data is being collected, be it on their processes, products and people. Data is not just about measuring the success of marketing, operations and sales, and finance. It also means to measure each and every function of businesses which also include Human Resources.
In a 2015 Deloitte Global Human Capital Trends survey of over 3,300 business and HR leaders, 75% of companies reported workforce analytics as “important” to them, but only 8% rated themselves as strong in it’. The report also mentioned how Big data is a key component of workforce analytics – the art and science of combining workforce data, business data and information technology (IT) expertise together to make more effective and efficient decisions about people.
The problem that most organizations face today is what to do with the huge amount of data and how to utilize data to drive workforce capabilities. The conventional HR model needs to be revamped since technology has taken over almost all aspects of business. HR has woken up to using analytics and is slowly aligning its skills with tech. "HR increasingly is using data analysts and statisticians to accurately identify root causes, identify patterns and predict outcomes for different strategies in almost all critical areas of people management – Hiring, Attrition, Employee engagement, Performance Management, Compensation and Health Benefits," said Rajiv Burman, Head of HR, APAC at Kronos. This helps HR professionals to chip in to strategic business development.
Vlasta Dusil, Head of Human Resources, SAP India said, "With technology moving at a fast pace towards artificial intelligence, companies have to bank heavily on their data to anticipate and drive business decisions. In this scenario HR also needs to be a more data driven organization. HR needs to be more factual and metrics oriented in order to demonstrate its impact to the organization. Doing so, it will help business make better and intelligent decisions with regard to policies and programs that impact the workforce."
Since HR grapples with the understanding of data, it has become imperative to look beyond and bring in data geeks in the HR world. According to the Deloitte report, combining the business and technology side on one team with people side to drive value and enhanced decision making for the organization is the necessary step towards utilization of this data. Data has to be in the rights hands to drive analysis out of it. Recruiting statisticians, economists, IT specialists in the HR is the need of the hour. HR needs this diversification since it is tricky find employees who are masters of all the above and also HR.
Noshin Kagalwalla, MD, SAS India said, "Data is now getting its due recognition as an important organizational asset to drive business performance. To leverage this goldmine of an asset, HR functions need to embrace effective data management policies and drive adoption of technology such as analytics and mobility within its various functions."
And what impact can analytics have on HR functions? "Considering the amount of data HR functions have access to today, some of the top impact areas of implementing analytics can be: Identifying the factors important for employee retention & employees’ sense of engagement; Identifying which engagement initiatives have the maximum impact and redirecting investments to the more beneficial ones, Predicting the employees at the highest risk of voluntarily leaving the organization; and Helping HR functions clearly articulate the business impact of its investments," Noshin added.
Similarly, Dusil agrees that "Backed by HR predictive analysis organizations are in a better position to understand upcoming trends with respect to employee turnover, assessing risks, leadership requirements and employee needs. It is also helping organizations engage with the workforce more effectively by reading into employee sentiments. The other important factor that HR Predictive Analysis helps is to present data in an intuitive manner to the relevant stakeholders to help them understand workforce challenges and thereby deploy the right strategies that can ultimately build and develop the business and its people."
And "while traditionally HR may have relied on IT to get answers to the questions they were confronted with, the clear answer is that HR functions in organizations only stand to benefit from including the likes of data analysts, statisticians and app developers in their team," said Noshin.
"In my past experience we have extensively used data analytics to identify successful sources of hiring, predicting attrition and using this information to plan our workforce management strategy. Using health assessment data with appropriate privacy safeguards, HR can help design benefits programs which deliver better outcomes for employees and the companies – improving health, productivity and saving money. Having specialists who can use the data available with HR to analyse and predict helps HR get out of the gut feel method. In addition it creates greater credibility for the function making it easier to sell the business case to Boards and Executive Teams," said Rajiv.
Although SAP India have data scientists, but they are not part of the HR organization, says Dusil. "That said, we do see this as a real possibility for the future,” she added. SAP India looks at “bringing together different data sets and look at correlation between aspects of talents to help us make better decisions. We are looking at analytics to determine which employees are at risk of leaving the organization and correlating which universities produce the best talents. This kind of data analysis is surely set to bring in a lot of changes in the way we work, from sourcing our talents to understanding their career goals and helping them achieve these very goals within the organization," said Dusil. At Kronos, "We continue to enhance our focus on predictive data analytics for our customers and our employees. Towards this HR globally and in India has invested in hiring data analysts. In India, we are now setting up an HR shared service team which will provide deep expertise to managers across APAC to help use data to analyze issues and predict outcomes. We are excited about the opportunity to further increase the positive impact HR has on the business and employees," said Rajiv.
To remain competitive in the current market, Noshin explains why it is important to give emphasis on a team of data scientists in HR. "By investing in technological advancements and by having a team which can empower front line HR leaders with accessible and actionable information for decision making, the organization can maximize the impact of the HR initiatives to effectively manage their most valuable assets viz. employees. In today’s dynamic scenario, this has the potential to drive direct bottomline impact which in turn enables organisations to remain highly competitive in the long run," said Noshin.
The same thought is echoed by Dusil when she says, "The HR organization needs to embrace the dynamic and intuitive means of data mining that comes with Predictive Analysis. In today’s world, businesses need relevant data to make well informed and strategic decisions especially with regard to their workforce. Data analysis can help organizations predict future trends and help them stay ahead of competition."