Dr Aaron Taylor, principal lecturer in HR management (HRM) and a line manager at Coventry University London spoke to HRreview about HR analytics and how they are an “indispensable part of any HR professional’s toolkit”.
HRreview: What are the advantages of HR analytics?
Dr Taylor: In my opinion, HR analytics are now an indispensable part of any HR professional’s toolkit. For example, HR analytics are particularly useful in understanding what factors affect employee retention. For instance, employee data can be analysed to ascertain if salaries have increased in line with others who work in an equal role in the same industry. Progression data can also be evaluated to discover how long employees have spent in their post and how their situation compares to their peers. Performance appraisal evaluation scores can be analysed to predict time in a role with those scoring lower tending to leave earlier than those who score highly. Predictive analytics such as these can play an important role in better understanding employees and their commitment to an organisation.
HRreview: HR analytics seems to receive far less attention compared to other aspects of HR such as wellbeing, reward and diversity, do you feel this should change?
Dr Taylor: This is a really good point and I do feel HR analytics warrant more attention. Although the areas you mention are all naturally important, HR analytics allow HR professionals to keep track of what employees are doing, when they are doing it and how long it takes for them to do it. For example, the Bank of America has used sociometric analytics and discovered employees who had a break together performed more effectively. As a result, they created group break times and witnessed a 20 per cent increase in productivity. HR can now use data such as how long it takes an employee to commute to work and how long they are likely to remain in their position to predict productivity levels. HR analytics is also a key component in making effective strategic decisions and allows HR leaders to effectively assess organisational performance using a variety of data-driven HR metrics. The effect of training can be evaluated, performance drivers can be examined, and organisational design appraised. Decisions can now be made more confidently than ever before.
HRreview: Commercial business decisions are often based on data, how well do you feel that HR has embraced data analytics?
Dr Taylor: I personally feel HR has not fully embraced data analytics yet although it eventually will do! There are so many advantages to be had although there can be a reluctance to engage in data analysis if its benefits are not clearly communicated. However, I do believe that HR now has a greater understanding of big data and the advantages it possesses. I can see more HR professionals embracing data analytics as its benefits become more widespread and more clearly understood.
HRreview: What skills do you feel HR need to have in order to provide meaningful analytics to a business?
Dr Taylor: To be successful in providing meaningful and insightful data, HR colleagues will need to be comfortable in the operation of HR systems as well as managing and reporting on large volumes of data. It is important that the data is communicated clearly so being a good communicator will certainly help. I also believe it is important to have an analytical mindset so both high-level and less obvious trends can be identified and then shared with others.
HRreview: How crucial is the presentation/style of data to illustrate the key elements?
Dr Taylor: It is very important, and the data should be presented as clearly as possible, so all stakeholders are able to identify relevant patterns, statistics and conclusions. It is crucial that the information is understandable to all. Stories should be visualised, and text kept to a minimum. It’s important to provide context for the data and to compare metrics with set goals. Colour-coded metrics are a useful way to demonstrate the performance of specific goals.
HRreview: How do you see data analytics being used in future recruitment and selection processes?
Dr Taylor: I can see data analytics being utilised more consistently in the future than they are now. I remember when it used to take me days to go through CVs although thankfully it is no longer necessary to physically sift through mountains of CVs with data analytics now being used by a wide variety of organisations in shortlisting processes. Key words and skills from applications can be aligned to person specifications and job descriptions with significant matches increasing the chances of candidates being shortlisted. Filtering now takes a fraction of the time it used to and removes any potential bias from the recruitment process. I can see the influence of data analytics on recruitment and selection practices continuing to grow. Companies such as Workday, Oracle and Microsoft are all refining their systems and I believe the analytics we use in the future will become more advanced, sophisticated and effective.