This article was written by Jeremy Langley, Marketing & Business Development Director at Lumesse.
As a HR leader, you are often sitting on a mound of crucial employee data, but it is often difficult to understand how to best utilise that data in order to implement an efficient HR strategy. Even harder still is knowing how to take a proactive approach to the data and use it to identify patterns that can help shape your strategy from the outset.
Some HR leaders are tackling this issue head on, especially in the field of recruitment. A recent study from KPMG International revealed that the ‘war for talent’ is crucial to almost every business in today’s competitive global markets. The study also found that the HR function is often viewed as playing a non-essential or ineffective role in helping to hire the best. Josh Bersin, Founder of Bersin by Deloitte, a research company that advises on HR strategy, talks about one of its customers, in a Forbes article, whose HR department applied data analytics to its recruitment strategy to ensure maximum efficiency. The customer, a large player in the financial sector, had always placed emphasis on hiring candidates who had excelled academically at the top US colleges. However, data analytics found that there was rarely a correlation between success in the job and these specifications. Instead, those who really achieved success in the role were those who had previous proven success in a similar job, the ability to multitask and move a project forward with little instruction. Ultimately, this helped the HR department to change its whole recruitment specifications and strategy.
A recent video in the Economist on big data and hiring also explains the benefits of taking advantage of employee data for enterprise recruitment. Large companies often receive thousands of candidate applications for a limited number of jobs, leaving HR staff feeling overwhelmed by the amount of admin time needed to assess each CV and candidate for the role. Once it is agreed internally which set of skills or relevant experience is needed for the role, data algorithms can be set to automatically search and select only the right applications for consideration, significantly reducing the manual HR admin burden.
There is the argument that basing HR strategy on data is risky as it takes away the human factor in the decision making process. Yet the case for data bias is strong. The Economist argues that bias is everywhere – in data but also in people, particularly when it comes to cultural/racial/academic discrimination. In summary, many in the industry, from McKinsey to The Economist, believe that data continues to be an important and inevitable part of the HR decision making and measurement process.
Implementing a data-centric HR strategy can be a bit of an uphill strategy, particularly if it is a new process being introduced to the organisation. The issue then becomes one of a cultural change within the HR organisation. Change of process often needs to be backed by a convincing manager and can take time for everyone to adjust – but if managed correctly it can have a powerful and positive impact on the way people work. If you and your organisation truly believe that a data centric approach is necessary, this should be an idea that is sold into the whole company, starting with the HR organisation, from the top. That means that senior managers and leaders inside the HR department and the overall company need to ensure that everyone in the HR department is pulling in the same direction when it comes to compiling, understanding and using data.
This can take time and once started, will become an incremental approach to rolling out a data centric HR strategy, whch is a great first step to proving its value and getting buy in from the rest of the organisation. For example, it is often best to make the case for using data in one crucial scenario or department first. By monitoring the impact on the business of the data driven decision, HR leaders can make a case for a more widely spread data centric approach to aligning strategy with business impact.
Data centric strategies will be a game changer for HR. The implementation and measurement of this type of strategy will help the HR department prove that not only can it be efficient but importantly, effective. However, such a strategy must go hand in hand with a cultural change, driven by senior management. If it does not, data analytic tools may be put in place but their value is likely to go as unrecognised and they will go underused.
