My reflection on the Deloitte HCM 2015 trend report: 5 HR analytics … stuck in neutral

As an engineering physicist I sincerely love numbers. I was also a big fan of using HR analytics and HR business score cards in general when I worked with HCM. The beauty from twisting numbers and matrixes and their correlations is obvious to me. I know it does not make any sense for many others though and I don’t blame them. Math is considered boring for the majority of people. Many can’t even predict their own private cash flow. Many can’t interpret or make sense out of a bubble diagram. But getting analytics has actually never been more easy. Technically there is no stopper and you don’t need to like math.

Gartner in general expects the Big Data hype to calm down soon. It has reached it’s hype peak.  Big Data is everywhere. Everything should be smart. Why start in HR if you have not started at all in more obvious benefit areas? This is why I believe Deloitte use the expression “stuck in neutral”. It won’t take off soon in HR. Unfortunately as it’s easier than ever to get started and demonstrate some new value.

Failing to understand why you need to combine different data sources with different data owners across the organization may represent a major mental challenge to build a business case for HR analytics. Practically seeking related funding to combine data from HR together with sales and other operations across the organizations, with functional and operational leaders HR never met or worked with before, is another obvious challenge, even more if HR still is regarded as a pure cost of operation reporting to CFO.

Many stakeholders are involved to get to the same table to do something no one really understand why they should do with HR in the first place beyond the very basic (but obviously not so basic after all if you ask me) benefits, as highlighted by Deloitte, such as:

  • Understanding and predicting retention
  • Boosting employee engagement based on prediction
  • Expanding the sources of talent and improving the quality of hires
  • Profiling high performers in sales and customer service
  • Drive compliance behavior

HR analytics is not about what-you-can’t-measure-you-can’t-control, only. Deloitte means there is a strong business case in general “… reducing turnover, improving sales productivity, and increasing the quality of hires (which) all have a tremendously high ROI”

If HR is not trusted advisor when it comes to business decisions, see my previous reflections and the full Deloitte report, why spend money at all in this area? HR needs to reinvent itself and seek external partnership with scarce combination of skills that can help them look smarter, become more business oriented and in the end evolve as trusted business advisors.  Service is, after all, a people business and HR is on the supply chain side. HR also needs to ally with IT, finance and other core operations. I apologize for sounding arrogant but the entire Deloitte study clearly demonstrate that a fundamental change is needed. Maybe not for you, but for the rest of us.

Of the respondents surveyed by Deloitte only 8 % consider themselves strong in HR analytics (!) which, for me, is a surprisingly low number. Much of the technically advanced capabilities may come out of the box from leading HR cloud solution providers today, for both core HR as well as strategic HR.

I claim you could get started and up and running within months.

Consider the Deloitte survey statistics:

  • 55 % are week to utilize HR & talent operational scorecards
  • 63 % are weak at correlate HR data to business performance.
  • 62 % are week to conduct multi-year workforce planning
  • 71 % are weak to use HR data to predict workforce performance and improvement

The need to build new HR capability is compelling and different compared to some years ago. Now it’s also about the prediction of the future and maybe even manipulate what will happen, not only making conclusions and get-well plans based on what happened and the latest employee survey.

Much of the logic is in the minds of people could and should be automated, like spotting that trainees are likely to leave the company within 2,5-3 years. Employees sudden increased / changed activities on social media may also be a clear sign that change likely is underway (attrition?) as likely as your spouses’ new look and gym visits.

“Companies that excel in talent and HR analytics can be positioned to out-compete and outperform their peers in the coming years. Without early, substantial investments, however, it is difficult to get traction. Companies should therefore make a serious commitment to this discipline, search for robust solutions from their core system vendors, and hire people into HR who have an interest and background in analytics and statistics.” – Deloitte

In HR specifically cloud solutions on the market come with good enough packaged solutions. The bigger challenge is the necessity to start with a business problem and break it down to HR logic. The technology is ready. HR may not be. The core systems may not be. Transform them or outsource them. Why wait? Create a culture of change. Start small. Start with a real problem.

I really recommend to read the full and good report from Deloitte at http://www2.deloitte.com/se/sv/pages/human-capital/articles/introduction-human-capital-trends.html

Personally I have analyzed and worked with HR scorecard and made sound business advice and drafted business tactics and strategic moves for very large organisations. It’s not that complicated, but you need to like it. If you don’t like it you need a side kick. One of those data scientists everyone is talking about.

Please comment or reach out for a 1:1 to discuss this topic and your own view.

Sven Hultin – Business Development Director at Zalaris, Sweden

About klingerii

Twitter: @klingerii
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