How can analytics help HR?

Written by
Mary Appleton

13 Apr 2016

13 Apr 2016 • by Mary Appleton

IBM’s Making Change Work study (August, 2014), found that a major objective for 77% of organisations over the next five years will be further integration of processes and technologies on a global scale.

The report anticipates business analytics will grow in importance. At Changeboard’s roundtable for HR directors, held in September 2015 under Chatham House rule, Paget Miles,
worldwide leader in HR analytics at IBM said: “There has always been a ‘trending topic’ in HR, but analytics has taken the function by storm. Those who use it in the right way will achieve competitive advantage. The challenge is to use analytics to be taken seriously against other functions.”

Are current HR systems fit for purpose?

Roundtable attendees agreed that current HR systems are cumbersome and fail to deliver.
“We spend hours doing reports manually,” said one delegate.

Another added that many software vendors have introduced standalone systems and, in an ever-changing market, HR functions end up siloed. Gathering data for analysis is challenging, as highlighted by one HR director whose organisation struggled to explore why graduates were leaving. “Although we had the information, it was in different places which was frustrating.”

For Miles, the major challenge for HR is using data effectively to drive business strategy. “We found CEOs only call on HR 35% of the time. What can HR do to make itself a ‘powerhouse’, bringing in business metrics to help link the HR and business strategies?” he asked.

Organisations should identify what they want to measure, he advised, then look for patterns of engagement or performance. Most delegates agreed the skillset of a modern HR professional must include an ability to interpret and report on data. However, opinions differed regarding how the information should be communicated to the executive team.

“The board isn’t looking for your ability to report, it’s about understanding your business,”
commented one attendee. “All my boss wants to know “HR needs to be more present in conversations,” suggested one. “If you speak to the right people, you form your opinion – then you look for back ups through evidence and data.”

The bigger your workforce, the more challenging this is. As one HR director said: “I rely on data to give me a pulse. In a vast organisation, often you’re firefighting and have to be reactive.”

A need to take action from insight

Miles warned that HR teams measure the wrong things; for example, ROI of hires, when the real insight lies in measuring retention. “Analytics cannot just provide insights, you need to action something,” he advised.

“How are you making strategic decisions if you don’t have data to back them up?” While  acknowledging analytics will not solve everything, Miles believes we are moving from “big data” to “fast data” – so HR teams need to capture, analyse and act on it quickly.

“Some HR people think we can make decisions based on a feeling. Data won’t make the decision for you, it’s just giving you the information, so HR needs to embrace it,” he concluded.