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Author's profile photo Kouros Behzad

Analytics – from the World of Finance to the HR Organization

dreamstime_18856450-Data-Analytics-300x225.jpgIn the finance and banking industries, organizations have employed for years mathematicians, statisticians, engineers, physicists, and highly-skilled specialists with super-strong analytical skills. They put these skills to work, sifting through volumes of financial, economic, and social data to identify trends, pick out the “needles in the haystack,” and determine the probability of markets going up or down. Their brain power, combined with machine resources, is focused keenly on exploring and acting on new ideas to increase the return on investments, whether through gaining a sub-second advantage in trading or in long-term ventures.

However, the idea of tapping big data in the context of the workforce, in order to gain a competitive edge, is just beginning to sink in with many HR organizations. Josh Bersin, chief executive and president of Bersin & Associates, says “of the companies we talk to, five to fifteen percent are very sophisticated at analyzing people data.” This subset of companies recognized the unique value of their workforce data long before their peers and are able to build a competitive edge and lead their industries as a result

Financial institutions’ history of performing in-depth analyses illustrates that a lack of available tools and technologies need not represent a barrier by itself for the HR function. However, it does point to the fact that HR organizations don’t have the funding for necessary solutions and resources to accomplish this. Inadequate funding can be attributed to the fact that HR hasn’t effectively built the business case and articulated the value that it can provide with the data it holds – most likely because HR is preoccupied with transaction processing

Play Ball: The Moneyball Approach to HR

There are numerous blog entries and articles about the book Moneyball: The Art of Winning an Unfair Game by Michael Lewis and the movie that followed. The authors draw parallels with HR departments’ search for talent to successfully drive their organizations’ objectives of growing and maintaining the business. One fact that can’t be lost is the importance of the HR organization to hire and nourish the analytic-minded talent for the HR organization itself, complementing and supporting the more traditional roles already in HR.

In Moneyball, Oakland A’s General Manager Billy Beane accomplished this with the help of Peter Brand, a research-minded economics graduate from an Ivy League school. Brand was able to crunch through statistical data and arrive at insight on how to place value on the players selected for the roster. The Oakland A’s built their advantage not only from the players that were selected but also from Peter Brand, a key role in building a team to win the World Series

People Analytics at Google

Google is another example of an organization that takes their HR analytics as seriously as banking and finance treat their industry data. Google employs a team of approximately 50 dedicated to “people analytics,” as they call it. There have been many talks and presentations on Google’s quest to build a better boss, find ways to retain high performers, and forecast the future organizational structure based on hiring and promotion practices – among their many projects

HR organizations can certainly invest in tools and technologies to get standard reports, metrics, and analytics – and should.  Concurrently, HR organizations also need to arm themselves with talent, skills, and capabilities similar to those in the financial world – people who can think beyond standard processes and are proficient with the tools and data-mining techniques to surface problems, verify hunches, and uncover differentiators – and ultimately provide the business with the edge it needs to become a leader and maintain that position

SAP is a leading provider of analytics tools, technologies, and solutions – SAP BusinessObjects business intelligence suite, SAP HANA, SAP BusinessObjects Executive HR Reporting rapid-deployment solution, and SuccessFactors Workforce Planning and Analytics – that help HR in its quest to become strategic and help the business run better.

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