Friday, January 16, 2015

The Roadblocks to Applying Predictive Analytics in HR

Data-savvy mindset, business interpretation and clear link between HR data and business strategy are all key factors in building an analytics-driven HR.

Although data analytics is on the top agenda of any forward-thinking organization, the majority of companies only embrace data as an one time IT project, not an ongoing digital capabilities well embedded with their key functionality and the very fabric of organization. From talent management perspective, how to apply the abundance of information to creating a data-driven mindset in HR and how to build an analytics-based talent management in hiring, retention, predicting your talent demand, building alternative talent pipeline and performance management?

A lot has to do with creating a data-savvy mindset in HR. A lot of HR professionals are not used to using data to support the decision-making process. Regular discussions about HR data, reports, definitions and dashboards should go along way in creating a sense of awareness. Having the data isn't worth anything if HR is not conscious enough to provide the context and interpretations of the data. There is a positive shift around the business and beyond. Making data part of the talent conversation will invariable produce the required change over time. Reporting via dashboards has the potential for meaningful impact.

Data has to be "interpreted" including recommendations through business lenses. HR professionals need to look at HR requirements through the business lens to ensure their HR initiatives align more closely with critical business drivers. If it's only about computers spitting out some numbers...without interpretation, then why shall you do it? "sense-making" and application of judgement within the business context is the goal of any data analytics. HR needs to refrain from seeking to access/aggregate /analyze data until such time as you are able to translate business priorities into people initiatives. Hiring a "data scientist" or buying technology won't solve for that deficiency. Invest in sophisticated data analytics tools and technology that incorporate internal and external sources of information and add value on it. If you are not adding value to the basic data in this way then what are you doing? Hence, keep the end in mind, either HR analytics or any kind of analytics, the goal is to create synergy and achieve high performing business result.

Lack of the visible links between HR data and business outcomes and lack of overall strategy that binds them. HR data should be integrated with business information, but the biggest problems are not with IT or business complexity. The biggest issues are the lack of understanding of how the business operates, lack of building the "business logic" that links the HR/Workforce data to business outcomes and the lack of an overall strategy that binds them. Managers need to have confidence with the data and have at least a basic understanding of where it comes from and how it is derived.  it doesn't always mean managers should have regular debates about data formulas, definitions etc...again they need to be comfortable with them, and have confidence in their validity, and managers have much more important things to debate, such as strategy, what to do about the outcomes, and how to make data-driven, evidence based decisions.

Overall, it is a journey to build a solid analytics capability in HR and the overall organization.  Without concerted effort and consideration of the change management issues, then a culture of data driven decision making in HR and talent management will not just "spontaneously" appear. It needs hard work, persistence, resilience, and a deliberate strategy to make it happen. Furthermore, processes underpin business capability, you need a range of stakeholders and business processes to come together to make it happen, from senior management, to frontline managers, to HR, to IT. But it is worth the effort to build a data-savvy HR and manage talent not just as the cost, but as an invaluable investment for business’s long term growth and maturity.


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