The pay off from joining the data revolution is no longer in doubt. It is now possible to use big data to better understand the business and so decide on a course of action. This applies to a wide range of areas such as marketing, customer management and strategy management. The question is can this be just as readily applied to the critical asset that is human capital? Laszlo Bock, Senior Vice President of People Operations with Google believes so and has spearheaded this transition towards a data driven approach to people management at work, backed up by his belief that ‘we need to be able to measure, to find out what does and doesn’t work rather than just adopt best practice.” HR has traditionally depended heavily on people skills and instinct rather than hard data. People analytics aims to make the decision making process around recruitment, performance evaluation, leadership, promotion, job and team design and retention more systematic and less prone to bias. The goal of people analytics is to ‘complement human decision makers not replace them.” It allows companies to look behind problems to identify and solve business related problems. It is not just an analysis of HR, it’s an analysis of the business.
Analytics around the HR function allows HR leaders to shine at the top table as it afford greater visibility of the direct results of their processes and initiatives on business outcomes. We have seen a lot of changes in HR over the years from its inception as personnel management to its current guise as human resource management. This move towards a more strategic and business centred approach was heralded in part by the influx of large multinationals into Ireland, increased competition caused by globalisation and also by the influence of notable academics such as David Ulrich. Where people analytics differs from traditional HR is that it uses hard data as well as more traditional information to make decisions. The insights gained from such an approach can dramatically improve performance and leadership within a given company. The idea is espoused by Google’s people analytics team’s mission statement that “all people decisions be based on data and analytics.” The idea is not to replace the human factor in decision making, as there will always be aspects of work which cannot be quantified, but to provide people with tools and information that they can combine with their own subjective analysis to make the most informed decision possible.
The benefits behind such an endeavour can be manifold as analytics provides companies with a powerful tool which allows them to enhance their competitiveness based on how and where they deploy their workforce. Analytics can provide an opportunity to build a more effective and engaged workforce that in turn increases productivity and capability. The data can provide the basis for specific action plans and investments that will address inefficiencies and gaps in an organisation’s workforce that need to be overcome in order to drive better outcomes.
In an environment where the big data is both possible and easy to gather, people analytics will only grow in popularity. The analysis of data at such a scale signals an intrinsic shift in focus in HR from the ‘what’ to the ‘why’ and will continue to help business leaders fine tune decisions about their workforce. The potential of big data to revolutionise the HR function is no secret, the question is how much and how quickly people analytics will be introduced by HR leaders in the near future.