When it comes to employee data, HR has a tremendous amount of power. But concerns about security and privacy are preventing many organizations from taking full business advantage of people analytics. Make no mistake, high-profile security breaches along with legal mandates are real gating factors. However, that doesn’t have to automatically shut analytics down.
Strategic view has business value
Fear is not the only reason appetite for people analytics is nascent, according to industry analyst, Lisa Rowan, Research Vice President of HR, Talent and Learning Strategies at IDC.
“The HR professional hasn’t been largely an analytical audience, and when you talk about providing workforce analytics to HR, you have to ask if it’s reaching the right audience, getting bubbled up,” she said. “HR is still bogged down in the weeds, looking at very operational figures like turnover rates and head count, rather than more business-salient, predictive or insightful views. To what degree are there senior executives at the table to nurture the notion of putting time and effort into implementing analytics?”
Getting past data politics
To move out of the slow uptake lane, Greta Roberts, CEO at Talent Analytics Corp., thinks companies need to refocus people analytics on business transformation with results like cost savings, revenue generation and customer satisfaction scores, instead of traditional HR processing efficiencies like time to source and hire employees.
“In some ways it’s political. HR has a lot of power because it has a lot of employee data. There’s an aura around ownership of this data, and not being able share it,” she said. “HR has also understandably focused on using people analytics to solve problems inside its organization. But unlike other departments, HR’s role is to impact the entire company.”
Changing up HR incentives to deliver business value just might impact this behavior. “No one is incented to create long-lasting and productive employees,” said Roberts. “If HR reduces attrition by a certain percentage, or if all the sales reps hired increase revenue by a certain percentage, HR could be incented accordingly. If companies do incentives right, the behavior follows.”
Companies moving forward
Despite these challenges, Mei Kim, an HR Technology Manager , told me there is growing interest in using employee analytics. Kim volunteers on a Workforce Analytics Special Interest Group (SIG) within the Americas’ SAP User’s Group (ASUG), which brings together customers, SAP SuccessFactors experts and partners for open knowledge-sharing and support. During monthly potluck meetings customers gain best practices for benchmarking and improvements along with the ability to directly impact products, while vendors receive first-hand customer input for solution development. In response to customer interests, the SIG’s scope has expanded from analytics to reporting and integrating information from departments company-wide.
“Human capital is a major expense, and it’s a question of how you connect the dots between people metrics and other key business performance indicators,” she said. “What’s important to a company depends on their maturity cycle and their industry. Vendors have to develop products that are integrated with existing solutions.”
Kim said the majority of companies are working on getting processes in place to collect the data that powers analytics. “You can’t get to the top of the skyscraper before the basement is built,” she said. “A lot of topics that come to the community revolve around how customers can make their processes robust enough to support analytics. If not, you’ll be stuck with very basic data that’s great to know. But if you want to get to that end point connecting with sales, revenue and other important business areas, you need the foundation in place first.”
Although slow to take off, people analytics is generating significant attention. Leading-edge experts are coming together this fall at the 2016 IHRIM Workforce Analytics Forum being held September 20-21 in San Francisco. Renowned academics, along with experts from the public and private sector will gather to take on the tough issues, specifically how companies can envision a data-driven future for HR that makes business value happen. Maybe the politics around people data are ready for change.
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