We live in a world of Big Data, and whilst it is a subject that has been hyped more than Lady Gaga’s insipidly bad eighties retro Europop, many people believe it will change the world. Some even claim big data will be bigger than the Internet. That is as an outlandish a claim (minus the blasphemy) as the one made by the late, great John Lennon in the mid-sixties when comparing the relative size of The Beatles to Jesus Christ. But does it stack up? And what is the impact on HR and Talent Acquisition professionals?
To put the amount of data we generate in the world into context it is worth revisiting the staggering revelation Google CEO Eric Schmidt made in 2011:
“Every two days we create as much information as we did from the dawn of civilisation up until 2003”
Think about that for a minute. As stats go that’s up there with Donald Bradman’s Test batting average of 99.94 – surely the most remarkable sports stat as it is over 50% better than the second best average in history. Anyway, I digress…
Sir Martin Sorrell said last year that “the future of advertising and marketing services belongs as much to Maths Men (and women) as it does to Mad Men (and women)”. A similar trend is taking place in HR, where CIO magazine reported the function being “invaded by Data Scientists”. But is HR ready for the revolution in Talent Analytics that big data has ignited?
In a business world dominated by numbers, balance sheets and return on productivity. HR is increasingly isolated in its inability to talk the language of the business. McKinsey’s 2012 report on the Human Capital function – False Summit, concluded HR has an inherent inability to relate the ROI or business impact of the function. This was echoed by Josh Bersin in Forbes where he presented findings from research that suggested only 14% of organisations studied had done any significant “statistical analysis” of employee data at all.
The extent of this chasm between the ‘haves’ and the ‘have-nots’ is reflected in Cielo’s Talent Activation Index (download a copy here), which found that Leaders are 12 times more likely than Laggards to rate their use of data and analytics to inform workforce strategies as “very effective” (72% vs. 6%).
Generally speaking there is a paucity of data-driven analysis and where it does exist, it is not tied to financial measures or communicated well. The consequence is that this can prevent HR from gaining buy-in for innovation, no matter how much it is needed.
So, is there anything that HR can do to rectify this situation? Is this an opportunity to not only gain that long sought after seat at the table, but actually provide insightful talent analytics that have a quantifiable impact on business performance?
Fortunately, the answer to both questions is a resounding yes. HR actually sits on a gold mine of data, but sadly is often not using it well. This is the critical point. The answer does not lie in purchasing expensive technology solutions – a fool with a tool, is still a fool – but in simply doing a better job of applying existing data insights to critical business questions. Moreover, it needs to present the insights in a language the business understands. Chief Executives want HR data to be like financial data: standardised, specific and clearly linked to outcomes.
Take the following example. The HR Director of a large financial services organisation had identified it was taking an average of 55 days to hire Insurance Sales Agents. Having benchmarked his competitors and confirmed that this was too long, he called in a team of external consultants. Several workshops later the HRD signed a contract to install a new Talent Acquisition system. Twelve months on, the HRD and the partner from the consultancy firm were in the CEO’s office excitedly telling him that the $1.5m investment had reduced time to hire from 55 to 37 days. The CEO was distinctly unimpressed. “You mean it takes 37 (insert expletive) days to hire an insurance agent? Get out” he shouted as they scuttled out of the office.
Initially flummoxed after the unexpected hairdryer treatment, the HRD and consultant regrouped and decided to look at how they could present the data differently. A fortnight later, things duly went a lot better. “We hire 3,000 Agents per year and their average revenue per day is $700” ventured the HRD. “By reducing the average time to hire by 18 days, we estimate that we generated additional revenues of $37.8m in the last 12 months”.
The CEO, for once smiling and full of bonhomie, came over and slapped them both on the back and acclaimed “now that’s the kind of data I want from my HR function”. Lesson learned.
Whilst in part anecdotal, this story is an all too common example of one of HR’s main weaknesses. Conversely, it also provides a clear indication of the huge opportunity available if HR is prepared to do things differently. First, by adopting a scientific approach to collecting and analysing data biased towards answering critical business decisions related to talent. Then by presenting it in a language that the business understands, HR will help drive the business agenda , gain influence and have a positive and quantifiable impact on the bottom line.
However, as Bersin highlights and as I heard for myself when I chaired the recent HR & Workforce Analytics Summit in London (read my six key takeaways here), a growing number of HR functions have made the great leap forward and have analytics and data at the centre of their HR strategy. One notable example is provided by Patrick Coolen at ABN AMRO – read how his analytics journey has unfurled on the excellent HR Intelligence Blog.
HR can’t afford to continue being the laggard within the organisation when it comes to talent analytics and big data. It has a huge opportunity and now is the time to seize it.
via Is HR ready for the Big Data & Analytics revolution? | LinkedIn.
Is HR ready for the Big Data & Analytics revolution?
