The Deloitte Global Human Capital Trends 2014 Report, released today, highlights trends and presents the views of some 2,500 business and HR professionals in 94 countries.
Not surprisingly, everyone agrees that HR is all about big data, which is being used for finding talent, predicting performance, and forecasting workforce trends. But 86% of companies report no analytics capabilities in the HR function, and 67% rate themselves as "weak" at using HR data to predict workforce performance and improvement. Only 8% of companies said they have "strong" analytics capabilities.
The report points out that HR is lagging behind other segments of business. For instance, 81% of the respondent companies use analytics for finance, 77% for operations, and around 58% for sales and marketing.
In a press release about the report, Josh Bersin, principal of Bersin by Deloitte, a part of Deloitte Consulting, said:
As the world's population grows, the global workforce is simultaneously getting younger, older, and more urbanized. Millennials are reshaping the talent markets with new expectations; new technologies are changing work in countless ways; and we are more frequently competing and racing with machines for knowledge work. The findings of our global survey reveal that a majority of global organizations are not prepared to deal with these trends that are reshaping the workforce.
Companies cite leadership developments, retention, and "reskilling" the HR department as the highest priorities, and many are investing in these initiatives going forward. Among the findings:
- 78% of large enterprises (10,000 employees or more) ranked HR analytics as "important" or "urgent"
- 66% believe they are “weak” in providing leadership programs for millennials
- 40% say they're "weak" in helping employees balance work and home lives
- 48% are actively developing or planning to move ahead with talent and HR analytics
- 57% of HR departments increased their analytics investment in 2013. Those that are succeeding have 30% higher-selling stocks than their peers
The report points out that HR analytics are going to play an increasingly critical role for companies that want to remain competitive in the 21st century. "High-performing" organizations are already using analytics to identify the characteristics of their best employees, to reduce factors that lead to fraud and injury, to reduce churn, and to maximize salary investments.
To get started, the report's authors recommend that HR departments "embrace the disruption" and forge strong collaborations with IT and business operations. Other tips include:
- Get a skilled analyst or sales professional to lead the team
- Look to "outlier" professionals -- like demographers or BI specialists -- to bring new perspectives while crunching numbers insightfully
- Make sure the team has a comprehensive solution set, including visualization and project management tools
- Start with a specific business challenge (we've heard that one plenty of times!)
- Don't be afraid to experiment
- Don't wait for 100% data quality and accuracy
This last point resonates with me, because it reflects the common mistake of letting "perfect" be the enemy of "good." Analytics projects -- especially ones that involve big data -- will yield positive results even when they're not using a fully scrubbed dataset. There may be some false-positives and missed signals, but that's why we have people to oversee the processes and make the final decisions.
What do you think, members? Do you see tremendous potential for HR analytics? Do you feel as though your organization is woefully behind? Share your stories in the comments below.
— Michael Steinhart, , Executive Editor, AllAnalytics.com