The debate: are analytics over-hyped?

22 October 2015

Author: Will Rankin


The debate: are analytics over-hyped

Big data has been heralded as HR’s magic bullet. But, as these experts argue, the reality is more complicated than it seems

We can all benefit – but data analysis will require a skills reboot in HR
 
In HR, we spend thousands on software, but now we are entering an era where we need to look properly at how to make data work for us. It’s a great opportunity for the industry to develop, to grow and to change – we can all benefit from challenging ourselves.
 
But we need to think carefully about metrics, measurement and what we are analysing before leaping into predictive modelling. The HR skillset is ‘soft’ and this sort of high-level analysis requires a skills reboot. Big data could divide HR into those with soft skills and those with analytical abilities. We may even see people lose their jobs as ‘soft’ HR roles are replaced with more IT-based positions, though it will change the face of HR in terms of gaining greater respect in the boardroom and across other business functions.
 
We need to decide how to make the best use of big data, learn how to analyse and dissect that data, and ensure data-driven decisions and predictions are having a tangible, positive effect on the company.
 
The biggest question for the board is, how much will it cost? If we can answer that, it will lead to a greater understanding of HR’s role, as well as closer ties between HR, finance and the IT department.
 
Debbie Arrowsmith, Dubai-based HR consultant
 
Until the core stats are reliable, using data for planning and prediction is meaningless
 
When cultures commit to being data-driven, data can dictate what employees should do next. That’s not liberation – it’s servitude. Data can end up removing choice instead of creating it.
 
The board and executive committee understand the need for big data, but they don’t trust it and are overwhelmed by it. HR systems are notorious for inconsistencies and inaccuracies, rendering it difficult to even get the basics right. Until the core statistics are reliable, using the organisation’s data for planning and prediction is meaningless.
 
Big data will completely change HR, where people are already overstretched. There will be more requirements for reporting, research and number crunching. HR teams should ask themselves: ‘Does this metric really tell us anything?’ For example, good managers develop and promote good people in their department, but this is very hard to measure, as teams are diverse in size and there are several variables to consider. I would suggest don’t measure it.
 
There is a premise that better data means better business, but it takes people to analyse it, and analyse it in the right way. It doesn’t address the lack of capabilities to even use, let alone drive, the data. To meet this demand, HR must focus on developing and hiring technology-savvy experts who have the skills to understand and use broad-based company and market data. Big data will become more useful and less problematic when we have the analytical tools in place, and the right metrics.
 
Samie Al-Achrafi, CEO, Marmalade Fish
 
Big data will allow HR to move beyond traditional management to become more predictive than reactionary
 
I believe big data offers a new opportunity to make data-driven decisions, which will tie HR into business strategy. It will take HR metrics beyond simple headcount and into real-time decision-making.
 
HR planning and analysis teams are strong allies, in part because they experience the same demands to combine HR and financial data into actionable analytics that are meaningful to the organisation. In their efforts to provide full visibility of workforce data and trends to the executive leadership team, HR can use predictive modelling in the same way marketing teams use big data to predict customer behaviour and patterns.
 
Without big data, it is very easy for HR to jump to the wrong conclusions, particularly when it comes to issues of staffing levels or organisational structure. That’s why companies in countries like Bahrain are making the big data revolution happen, across the private and public sectors.
 
We need to promote more understanding of the benefits of big data, and its potential to solve real business problems. Alongside this, we must develop employees with the quantitative skills for big data, who can see beyond the traditional statistical methods of the HR function.
 
Ali Al-Aradi, HR lecturer, VTDI training institute, Bahrain
 
We have the opportunity to overtake the rest of the world
 
Organisations hold huge amounts of information on their workforce that is redundant, so in the last two years we have seen the ‘big data’ wave move into the HR space – with several industry leaders, specialist consultancies, software companies, communities and bloggers driving the debate and building a new industry and functional discipline for HR. There are challenges, of course, but there are also huge opportunities, and the Middle East region genuinely has the opportunity to overtake and lead ‘great practice’ in HR analytics on an international scale.
 
We are more agile and innovative, but our challenge in the short term will be capability: building a robust and scalable HR analytics strategy is dependent on the vision and experience of the HR leader and the teams delivering the ‘big data’ programme. HR has to adapt quickly and think about how HR insights can add business value or solve business problems.
 
Linking HR data to revenue, profitability, customer satisfaction and advocacy is a great starting point – and you can begin by looking into the parts of your business that are facing commercial challenges. What is happening with people in a particular part of the business that might be causing a problem or limiting progress?
 
It’s also about HR making the leap to look at HR data through a multi-dimensional lens – and less in silos. For example, in key parts of the business, is there a link between falling revenues and high-performer attrition levels? And how does this correlate with engagement measures, recruitment trends or compensation benchmarking?
 
I am convinced new ‘workforce’ insights and decisions will change the way organisations approach HR – and as this new discipline matures with the injection of new skills (like data scientists and statisticians), we will see the organisations that are the fastest and most effective adopters reap the commercial returns.
 
Matthew Mee, managing director, CIPD Middle East