We need to talk about HR analytics

In February we published our most recent report in the HR Outlook series which among other things explored HR analytics and how businesses and HR professionals use data in their work. As part of the survey we asked HR professionals to consider where in “maturity terms” they are, on a rough scale between starting out and investing in ad-hoc activity, through to being heavily invested and capable with predictive capability. Our data showed us that the majority of HR professionals either don’t do analytics (8%) are just starting out (13%) or have set up a simple system but are not applying it to any strategic issues (29%). Very few have managed to step in to the “optimising” space, where we state that analytics is truly predictive (7%). It’s easy to see then that there are still barriers in place which are preventing analytics from having real impact.

These findings match my own experience of working in the analytics field. As a researcher I am lucky to spend much of my time meeting with business and HR professionals to speak about their people data, how and why they use it and to what effect. Something that has quickly become apparent to me is a real sense of concern and worry HR people have when asked to consider their people-data and analytics capability. I’d say almost nine times out of ten people I interview will preface our conversation with the statement “we’re at the start of our journey”. It’s rare to meet an HR professional totally satisfied with their analytics capability and their people-data system.

What is even more interesting is that the HR profession considers HR analytics to be well-rooted and having real impact, when as the above data shows, it has yet to really embed. The same Outlook survey collects data from the business perspective to consider the views HR professionals are working with. The picture this data paints is one of a data imbalance: HR professionals consider their investment in analytics to be highly value adding and impactful but their functional colleagues give a far less glowing account. We found that 37% of HR professionals believe that their functional colleagues are satisfied with the people analytics they receive – but in reality only 14% stated that they are satisfied. We also noticed a disconnect with regards to using reported data. People data is often shared through a data scorecard, and we found over a third of HR professionals are using this method in their business (34%). However only 14% of non-HR leaders were aware of their business’ balanced scorecard. In short, we may think that people data is adding value and is being used by the business, and in-fact the HR function is probably really benefiting from people insights, but our data shows that the business has yet to learn from people data and see it translate in to business value.

Without the ability to communicate data and its value, people analytics and HR data is very unlikely to embed in to the business and be seen as a vital resource. And if the business is not seeing HR use this data and generating insights on a frequent basis, the future of people analytics existing within the HR function may be at stake. HR and HR analytics: why HR is set to fail the big data challenge a hugely insightful piece published in Human Resource Management Journal by David Angrave, Andy Charlwood, Ian Kirkpatrick, Mark Lawrence and Mark Stuart I’ve summarised as part of our In a Nutshell series explores this issue in great depth. Looking closely at the HR analytics and the role of vendors and academics the piece notes that if HR analytics is to become fully embedded and drive real value it must be wrestled from the hands of vendors and academics taken more deeply in to the profession (Angrave et al, 2016).

HR analytics has been around in one guise or another for some time now, but if the profession is to really benefit we must invest in HR capability and help our business colleagues to use people data when making decisions. If we don’t, HR analytics will remain on the periphery, or worse still be lifted from the function and operationalised elsewhere in the business – and this is unlikely to end well for HR.


References
Angrave, D. Charlwood, A. Kirkpatrick, I. Lawrence, M; and Stuart, M. (2016) ‘HR and HR analytics: why HR is set to fail the big data challenge’. Human Resource Management Journal. Vol 26, No 1, pages 1-11

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Anonymous
  • Very true, HR professionals need to understand the data, figures and know how to communicate it. I think part of the CIPD course should include excel training on V lookups and Pivot tables, so that HR professionals can easily gather data, analyse and interprete data; regardless of whether they have access to sophisticated HR systems or not. With these tools we will be able to create, improve or easily manoeuvre HR systems in organisations and better prove our value adding element.