Global Firms Way Behind in HR Analytics

According to a new report from Deloitte, companies around the world believe analytics are critical for recruiting talent and modernizing HR operations, but few are doing anything about it.

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.

Talent & HR Analytics
Deloitte found that most countries are clustered in the 'high urgency, low readiness' quadrant of the graph.
Deloitte found that most countries are clustered in the "high urgency, low readiness" quadrant of the graph.

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

Practical advice
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, Circle me on Google+ Follow me on TwitterVisit my LinkedIn pageFriend me on Facebook, Executive Editor,

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Michael Steinhart, Contributing Editor

Michael Steinhart has been covering IT and business computing for 15 years, tracking the rising popularity of virtualization, unified fabric, high-performance computing, and cloud infrastructures. He is editor of The Enterprise Cloud Site, which won the Least Imaginative Site Name award in 2012, and he managed, a community of IT professionals taking their first steps into cloud computing. From 2006 to 2012, Steinhart worked as an executive editor at Ziff Davis Enterprise, writing and managing research reports, whitepapers, case studies, magazine features, e-newsletters, blog posts, online videos, and podcasts. He also moderated and presented in dozens of webinars and virtual tradeshows. He got his start in IT journalism at CMP Media back in 1998, then moved to PC Magazine, managing the popular Solutions section and then covering business technology and consumer software. He holds a Bachelor of Arts degree in communications/journalism from Ramapo College of New Jersey.

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Re: No surprises
  • 3/13/2014 10:37:32 AM

What we need are more HR analytics directors to share their stories, a la Mark Berry at ConAgra. Hearing how others have been successful, and to what end, would surely help energize and inspire others to work harder at or get started with HR analytics.

Re: No surprises
  • 3/13/2014 10:03:12 AM

I suppose that's true -- but the folks peddling HR analytics have got to create a sense of urgency around it, so it's helpful to tell folks they're already losing the race. I still maintain that it's high time companies started phasing it in, though.

Re: No surprises
  • 3/13/2014 9:22:25 AM

Hi Michael, I think the idea of data-driven HR/human capital analytics has to start within the HR department itself. That means the department would be headed by a data-savvy HR professional. If HR doesn't have that kind of leadership, combined with senior management buy-in/sponsoship, I can't imagine this idea going anywhere within a company. For companies just getting started with analytics, I don't think HR would be a natural starting point -- because of the additional complications of applying the analytics to people. Better to get the chops elsewhere, and then apply that knowledge to the human realm.

Re: Believeable
  • 3/12/2014 10:03:07 AM

I think that past attempts to re-skill people have always met with mixed results. Many of the HR people I talk to are still skeptical of internet recruiting. This would be a very big leap for them.

Re: No surprises
  • 3/12/2014 9:58:46 AM

I'd say I agree and disagree with you, Beth. You're right that other areas of business operations are more number-centric, but HR ought to have been number-centric, too. Since companies have been able to measure productivity on an employee-by-employee basis, that information ought to have flowed back to HR processes. (Backpropagation is the algorithmic term -- I learned that at Sentiment Symposium.) 

It's clear that HR's been resistant to incorporating that kind of numbers-based approach. I'm not sure whether that's coming from management or from HR itself. What do you think?

Re: Believeable
  • 3/12/2014 9:52:24 AM

Do you think it's not going to really take off until younger workers replace older HR professionals, tomsg? Or is it possible to undertake a "re-skilling" project, as the Deloitte folks think?

No surprises
  • 3/12/2014 9:47:11 AM

Hi Michael -- I'm not surprised by Deloitte's findings, necessarily. But I guess I do wonder whether it's fair to compare the use of analytics in HR to the use of analytics in the more naturally numbers-heavy areas like finance, operations, and sales. I don't see this so much as a catch-up situation but as the next step in an evolutionary process.

  • 3/12/2014 9:43:04 AM

I think the points you make really resonate with my experience. The global companys complain of lack of talent and yet the ways they have to find and mine the talent available are rooted in old ways of doing things. I really think this is an area for future growth- one of the keys will be to get some younger people in HR who really understand the benefits of mining data.