September 28, 2015

HR and Analytics

Everyone in the business world knows that analytics are now a really important decision-making tool. Finance knows it, sales knows it, marketing knows it, HR knows it… despite this, HR lags a long way behind other disciplines in actually adopting analytics and using them to make decisions, validate decisions and communicate those decisions.

There are numerous pieces of research that show just how far HR has fallen behind other departments when it comes to using big data. One such study released recently shows that only 17% of HR professionals in SMEs are using analytics technology to inform their decision-making process. This is despite the fact that the study, ‘Advanced Analytics 2015’, found that 73% of the HR professionals polled think analytics software can help enhance strategic decision making in their organisation. So HR knows it should be doing it but isn’t. Why?

The lack of take-up is partly because there is a shortage of HR professionals who are confident and skilled at working with data.
This came out strongly in the findings of the Learning Performance Institute’s Capability Map (https://www.learningandperformanceinstitute.com/capabilitymap.htm) , an ongoing study into the skills of the L&D profession. It found that only 874 of the 2000 plus professionals who had completed the study a few months ago, said interpreting data was part of their job. Analytics was actually the worst scoring skill in the profession. Even those who did use analytics displayed low levels of proficiency, with only 129 of the 874 saying they were expert at interpreting data.

This shows that HR really needs to get to grips with analytics and get up to speed. They also need to look at their technology requirements – 83% if those taking part in the ‘Advanced Analytics 2015’ study, said they do not have access to the right technology. But it is not only that. A high number (68%) are not taking a strategic view on it and haven’t even yet considered how they could use analytics within their department.

HR really needs to catch up with those other business disciplines that are forging ahead with analytics and have managed to incorporate it into their working practices much more successfully. The study shows just how much more proactive and forward-thinking other functions are. Marketing is leading the way with 48% of them using analytics, followed by strategic decision-making (44%), finance (38%), operations (37%) and customer-facing functions (37%).

There are all sorts of ways that HR can use analytics – measuring employee engagement, measuring the effectiveness of training, pinpointing high performing and low performing individuals and teams, finding the troublespots etc. Having all this data gives HR a lot of insight into the workforce, assists with capability planning and strategic decision making. It also gives them concrete evidence that they can share with the business about what’s working, what isn’t working and why.