The Quest for Better HR Analytics


Pity those poor human resources departments. While other departments within corporations are reaping the business value of big-data, HR departments are still stuck in neutral -- making little progress with big-data in strategic decisions.

In fact, according to a new report from The Conference Board, "today’s human capital professionals have yet to move from being reactive to proactive and predictive."

During the past two decades, HR functions have aggregated volumes of information about the workforce. However, many of today’s human capital professionals are working with inconsistent, basic information, contend authors of the report, "Human Capital Analytics: A Primer." Human capital functions that embrace and employ predictive analytics to the fullest are finding themselves more closely aligned with business strategy than those that do not, they note.

The report, completed with contributions by members of The Conference Board Research Working Group on Human Capital Analytics, was co-authored by Jac Fitz-enz, "the father of human capital strategic analysis and measurement," Patti Phillips, president and CEO of the ROI Institute, and Rebecca L. Ray, senior vice president, human capital at The Conference Board, and the leader of the Human Capital Practice.

The goal was to get a better understanding of the current state of human capital analytics in terms of challenges, guiding principles, processes, models, and standards, and to identify the metrics and best-practices that can lead to rapid development and deployment of a solid human capital analytics function.

HR professionals need to embrace analytics, develop capability, and recognize analytics' use in positioning human capital investments as drivers of organizational strategy, conclude the authors, noting in the report the need for consistency in training, processes, and methodologies.

Additionally, the authors conclude that human capital analytics practices:

Should be built on a foundation of guiding principles that support the practice in driving strategic outcomes, involving multiple perspectives, balancing analysis with information needs, and ensuring sustainability and transferability.
The report notes that there is no one best human capital metric for any one process or initiative, and that the best metrics are those that answer the business questions at hand.

HR professionals face common challenges in creating an effective human capital analytics capability that spans geographic and industry boundaries. The challenges include:

  • Getting senior leaders and executives to recognize the value of human capital analytics initiatives

  • Effectively relating the impact of human capital analytics initiatives to business outcomes and the bottom line

  • Aggregating data into a single, centralized database with consistent, quality data

  • Developing the necessary systems, technology, analytical skills, and resources

  • Using tangible measures to measure the intangibles

  • Moving from the reactive to the predictive

The report maintains that successful, analytics-based HR practices need to drive strategic outcomes, involve multiple perspectives, balance analysis with information needs, and be sustainable and transferable.

What do you think? How can HR departments best utilize analytics?

Noreen Seebacher,

Noreen Seebacher, the Community Editor of Investor Uprising, has been a business journalist for more than 20 years. A New York City based writer and editor, she has worked for numerous print and online publications. Her work has appeared in The New York Times, the New York Post, New York’s Daily News, The Detroit News, and the Pittsburgh Press. She co-edited five newsletters for Real Estate Media’s GlobeSt.com and served as the site's technology editor.

She also championed the commercial real estate beat at The Journal News, a Gannett publication in suburban New York City, and co-founded a Website focused on personal finance. Through her own company, Stasa Media, Noreen has produced reports, whitepapers, and internal publications for a number of Fortune 500 clients. When she's not writing, editing, or Web surfing, she relaxes in an 1875 Victorian with her husband and their five kids, four formerly homeless cats, and a dog.

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Re: counter intuitive
  • 1/1/2013 12:19:41 PM
NO RATINGS

..

Beth writes


In large respects, it is all just a crapshoot. Looking at a person "on paper" is tricky business.


 

I generally agree.  And I'm skeptical that current "analytics" tools (which, to my knowledge, are mainly based on tests given to the jobseeker, plus maybe some other background stuff, including "shoulder-surfing") are competent, either.

Maybe more sophisticated approaches could be tried (Brain scans? Hypnosis? Mind-melding by psychics?), but these seem pretty scary, and I'm still skeptical that they'll reliably predict anything ultimately useful about the candidate's performance.

 

Re: counter intuitive
  • 1/1/2013 12:19:12 PM
NO RATINGS

..

Beth writes


In large respects, it is all just a crapshoot. Looking at a person "on paper" is tricky business.


 

I generally agree.  And I'm skeptical that current "analytics" tools (which, to my knowledge, are mainly based on tests given to the jobseeker, plus maybe some other background stuff, including "shoulder-surfing") are competent, either.

Maybe more sophisticated approaches could be tried (Brain scans? Hypnosis? Mind-melding by psychics?), but these seem pretty scary, and I'm still skeptical that they'll reliably predict anything ultimately useful about the candidate's performance.

 

Re: Wish analytics would...
  • 12/14/2012 8:23:37 PM
NO RATINGS

How do we define perfect employees? Maybe it's too big even got big data

Wish analytics would...
  • 12/14/2012 11:11:49 AM
NO RATINGS

Use the data they have to identify high value employees bsed on performance, education, experience. Create programs to assure that employees that are considered high value are appropriately mentored and developed. Identify employees with performance issues and put them on plans for imporovement and move mid level performers to higher performance levels. Just my holiday wish list!

Re: counter intuitive
  • 12/14/2012 10:02:10 AM
NO RATINGS

In large respects, it is all just a crapshoot. Looking at a person "on paper" is tricky business.

Re: counter intuitive
  • 12/13/2012 11:24:53 PM
NO RATINGS

I would hope that HR analytics will bring more objective decision making. Much of human resource is making bets on a hunch, politics, subjective perceptions and so on. 

Re: counter intuitive
  • 12/13/2012 12:40:29 PM
NO RATINGS

Of course, leave it to analytics professionals to recognize the value in using the numbers to predict hiring needs and optimize the selection process!  Analyzing the Analytics Talent Pool

Re: counter intuitive
  • 12/13/2012 10:24:11 AM
NO RATINGS

In fact, according to a new report from The Conference Board, "today's human capital professionals have yet to move from being reactive to proactive and predictive."


***

It's been like this for 15 years. As for why, my hunch is that people go into HR because they aren't "numbers' people."

Re: counter intuitive
  • 12/12/2012 9:56:38 PM
NO RATINGS

I think it is because HR is still considered as a cost center rather than a profit center and secondly, most companies have not realised that managing Human Capital could be the next frontier to gain competitive advantage in this Knowledge Economy.

Re: counter intuitive
  • 12/12/2012 3:12:56 PM
NO RATINGS

And the whole HR business is founded on analytics even prior to the emergence of the big-data concept in its current form. They could be slow to adopt the new analytics tools for that very reason. The fact that not much in the day to day operation is bound to be new. However on a strategic level it will be useful because from the granular detail provided by latest tools, HR can sort and improve their staff skills and select new hires more accurately.

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