Investment in HR analytics remains strong in Asia but progress is held back by a lack of skills and standardisation challenges
HR professionals in Singapore, Hong Kong and Malaysia recognise that HR analytics have the potential to be transformative, but a lack of analytical skills and questions over standardisation are holding many organisations from including them as a core part of the HR function. This is according to a new report from the CIPD, the professional body for HR and people development.
The report, Evolution of HR analytics: Perspectives from Singapore, Hong Kong and Malaysia, is being launched today at the Singapore Human Capital Summit 2015 and contains a survey of HR professionals and insights from PwC, Johnson & Johnson, Shell and Maybank. It highlights increased awareness of the potential of HR analytics across Singapore, Hong Kong and Malaysia and indicates that the regions are following a similar trend to the rest of the globe when it comes to the adoption and evolution of HR analytics. The report also shows how organisations view HR analytics as hugely important and potentially transformative, but they also recognise that they are at the very early stages of capability and are being held back by a range of factors.
The CIPD’s report reveals that:
- Organisations in Singapore, Hong Kong and Malaysia are growing at such a rapid pace that there is now a real need for people management practices that drive sustainable long-term performance
- Organisations using HR analytics reported improvements in both culture and performance
- HR functions that focus on small, discreet but high-value projects are the ones gaining the most traction with the wider business, with investment following the production of robust insights and evidence
- Investment in HR analytics is expected to continue to increase over the next 12 months for over a third of organisations, with investment remaining steady for the rest – none predict a decrease in investment
- HR analytics are helping HR professionals to include more long-term concepts in their strategy; for example, developing employee reward strategies which are in support of longer-term business needs rather than rewarding short-term outcomes
- HR professionals across the region are developing balanced scorecards to clearly illustrate high-level insights and the strategic value of human capital and HR data with senior business leaders.
However, the report also highlights a number of factors that are limiting the ability of organisations to fully realise the benefit of HR analytics:
- A lack of business investment and HR analytics expertise are two dominant challenges facing HR professionals in Singapore, Hong Kong and Malaysia. Over half (57%) of HR professionals believe that there is a lack of analytical skills available
- As with other global markets, the application of HR analytics is fragmented, not just within sectors but within organisations too
- 48.5% of organisations do not have sophisticated HR technology which meets their business needs and less than a quarter (23.4%) are using a fully integrated and combined HR analytics IT programme
- Constraints such as investment, leadership understanding and overall HR maturity are holding back development at a strategic level while at an operational level, technology and the analytic skill set are inhibiting the development of the function
- Standardisation is a significant challenge – HR professionals are unsure whether to develop context specific measures for their organisation or standard measures for benchmarking purposes
- The majority of data is used as a reflective insight, rather than using indicators to develop forecast data
- Organisations continue to focus their attention of engagement and data around cultural aspects of the firm as their main sources of people data. Far less is being measured and reported with regards to other strategic activities such as productivity and performance.
Edward Houghton, research adviser for the CIPD, comments: “Many organisations have begun their HR analytics journey but it’s still very early days. Those organisations that are able to use HR analytics to be more strategic are likely to make significant steps towards sustainable, competitive advantage. The pace of evolution may be fairly slow, but this study shows that there is real potential for HR analytics to add value across businesses and across the region. Small projects that show clear business insights through a balanced scorecard are an essential way to get wider buy-in from the business on the value of HR analytics, and can open the door for greater investment in technology and skills to support this critical activity.”
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