“Unless HR professionals upgrade their skills and knowledge... the existing forms of HR analytics are likely to seal the exclusion of HR from strategic, board-level influence while doing little to benefit organisations and actively damaging the interests of employees.” — Human Resource Management Journal, Vol 26
In my career working across multiple business functions, I've realised first-hand that HR has been the last to take a rigorous approach to using data. Most companies understand the value of insight driven decisions but don't really act on it in HR. The evidence is stark:
83% of HR leaders agree that all people decisions should be based on data and analytics, but only 37% use data to solve people management problems.*
Nearly two-thirds of HR leaders are not using people data to support HR decision-making or to inform strategic planning.*
92% of companies are struggling to get the strategic insight they need to solve retention problems and other issues.*
Only 22% of HR and recruitment leaders are extremely confident their organisation has access to all the skills it needs to meet business objectives over the next five years.**
40% of HR leaders claim the volume of HR and workforce data has become a challenge.**
Despite having a wealth of data, HR often struggles to use it effectively to make decisions. That means an absence of compelling business cases, and their priorities often put to the bottom of the pile.
“The HR function is lagging behind other functional areas of management in the adoption of analytics technology and in the analysis of big data. Contrary to optimistic accounts from industry sources, we can see little evidence that HR analytics is developing into a ‘must have capability’, which will ensure HR’s future as a strategic management function. Many in the HR profession do not understand analytics or big data, while analytics teams do not understand HR.”
— Human Resource Management Journal, Vol 26
Early in my career, marketing had a similar reputation for an inability to be insight led. In one business I worked in, they were affectionately known as the "crayons and colouring-in department." In another, the Sales Director said "You guys go and have another away day, sit in hammocks, draw pictures and put post-it notes on the wall, and we'll get on and do the proper work!" As a function, marketing understood that to have influence it needed evidence and it has undergone a data-led revolution. Customer insight became central to how marketing operated and consequently the consumers were prioritised by most organisations. The link between customers and business performance is clear. It's now up to HR to do the same for employees.
As troubling as the Coronavirus pandemic is, it is a critical moment for HR teams not just to be highly regarded operationally, in which they have largely succeeded, but to do so strategically as well. Until this point, HR has mainly been an implementer of other people’s plans; recruitment, training, company events and some engagement work. It has taken a forward thinking CEO or an exceptional HR Leader to break the mould.
Our view is that employees are the bedrock of any organisation, and our current situation demonstrates that clearly. Look after your employees, they will look after your customers, and performance will take care of itself. There is a lot of hot air talked about putting people at the centre of your business, and now is the time to make that happen. HR will never have a better opportunity than it does now. The key is the effective use of data.
** Capita Resourcing