Kevin Savage: The shifting use of data in HR – from compliance to strategy

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How do you use data in your HR organisation? Most of us are very familiar with record-keeping related to labour law compliance, but the data we’re collecting can do so much more. Today’s cutting-edge firms are sifting through their hoards of employment information to guide their strategy and get an edge on their competitors in today’s modern talent marketplace. Let’s take a look at some of their best practices.

Using our research tools, I recently found that demand for data skills in HR positions rose by 41 percent in the first quarter of 2015 compared to 2014. The simple way to read these figures would be to say: “well HR departments do have a lot of data, and everyone needs to know their way around a spreadsheet these days.” But in reality, I think the need for these skills speaks to a deeper shift in the kind of value that organisational leadership is demanding from HR departments. We’re no longer order-takers sitting atop a library of information; we’re being asked to do something with all those dusty files we’ve been keeping.

Think I’m wrong? More than 3,300 executives and HR professionals in 106 countries participated in Deloitte’s 2015 Human Capital Trends survey and gave their HR department failing marks. When Deloitte dug into the reasons, these professionals felt HR was failing their organisation, the second-largest capability gap cited was ‘HR and people analytics’. HR data is in many ways an organisation’s last untouched frontier, and executive management will no longer stand for the status quo.

To survive in today’s globally competitive marketplace, a business must wring every ounce of value from its data. The consequences of the status quo are financial, with £9.2 billion invested in HR systems that only 14 percent of HR executives use for talent analytics. At the same time, the result can be an existential problem too – it can be easy to credit Google’s software engineers for the company’s massive success, yet few ever read about the cutting edge “people analytics” department that governs Google’s hiring and evaluation process. While so many of its contemporaries are lost in the waters of history, Google is only gaining steam, and it has its HR analytics and sophisticated recruiting tools to thank.

After reviewing the data and literature surrounding HR analytics, I’ve come up with a list of the areas where talent management organisations can improve their performance with more rigorous analytics. Do any of the below strike you as challenges?

Talent Acquisition

Like it or not, we’re all competing in a global marketplace for the best talent. Technology has allowed the nimble organisation to efficiently scale its labour force up and down depending on business demand, but it’s also had an interesting effect on employees. With employees now able to work from anywhere, for anyone, a freelance mindset is changing the way many people view their careers. Indeed, Intuit predicts that 40 percent of US workers will be independent contractors by 2020, while here in the UK the number of companies hiring freelancers grew by more than 150 percent in 2014. The competition for top talent is white hot, and strong performers are increasingly in the driver’s seat of their own career.

What if you could model your top performers to understand where to find more of them? What did they study? How did they hear about your organisation? What skillsets do they possess that can be searched for on an external job board database? If you haven’t reviewed the qualities of your best employees to inform your hiring, it’s time for an analytical evaluation. The strongest performers are going a step farther, building recruiting tools that automatically scour the web to look for candidates that match their hiring analytics.

Talent Retention

The biggest threat to businesses in the knowledge economy is having our best performers walk out the door. Most of us invest thousands in training and education for our teams, yet these days a better opportunity at a higher salary point could be just a click away for our top performers. What trends exist in your employee attrition data that can be addressed? Does a deadly tenure cliff exist within your workforce? What reasons do your employees cite for leaving in their exit interviews, and how prevalent are these factors?

In addition, your managers’ skills and capabilities will have an outsized effect on your staff’s effectiveness and job satisfaction. What qualities do your best managers possess? How can you duplicate those skills or find them in your next generation of leaders?

Skills Development and Training

Does your team have the skills to keep your company competitive in today’s marketplace? Have new technologies changed the way they perform their activities? Do you know who among your employees requires which trainings based on their evaluations or inventory of skills?

Taking things a step further, you could identify internal subject matter experts among your employees who possess skills that could benefit the entire company and leverage those strengths.

Business Planning

With flexible work spaces and teleworking becoming more and more common, many companies are facing uncertain infrastructure decisions that will require careful planning and forecasting to avoid costly mistakes. Where should you locate your next office, if you’ll even have an office at all? How many telephones or VPN connections will your IT department need to provide? Are the skills your staff needs now and in the future available in your current market?

I think by now you can see the potential of HR analytics to solve some of the most vexing issues our industry faces. Yet Deloitte has shown that only four percent of HR departments perform predictive analysis on their staff. I hope you’ll join me in lifting that number next year. Your company’s future may depend on it.

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About Kevin Savage

Kevin Savage is UK Managing Director for WANTED Technologies. He leads the company’s business activities with corporate HR teams and recruitment firms that are seeking to use data in new ways within their strategic decision making. Previous to joining WANTED, Kevin has held senior leadership roles with the industry analyst firm Yankee Group in Europe, leading the analyst firm’s delivery of research programmes and expertise to telecoms companies, equipment vendors, software development firms and financial services organizations. He also spent four years at Jupiter Research and Forrester Research, leading those firms’ growth across UK industry sectors.

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