Original article written for Inside HR Magazine April 2015
The analytic functionality of modern HR software is meaningless without the right interest, creativity and skill of HR leaders.
You wouldn’t be wrong if the first words that sprung to mind as you read the title were “analytics” or “big data”, as they represent two of the three main components that drive HR system intelligence. Big data is really just a term that represents the massive amounts of information we create and collect in a myriad of digital systems such as email, collaboration tools, HR transactional, talent and payroll systems as well as our online social media activity using tools like LinkedIn, Twitter, Facebook and others.
Nobody really knows exactly how much data we collectively create. Whatever the volume or source, it’s really irrelevant, save to say that every individual in the workplace is creating a significant amount of data on a daily basis that could be extremely useful and valuable in the delivery of business- and people-related goals.
The data, however, is largely meaningless unless we firstly recognise what it is, know what value it will offer our organisations, and are able to apply analytical robustness in a creative and strategic manner to the raw data. Many will be familiar with the movie Moneyball, which highlights the power of using data and analytics to make business decisions regarding sportsmen. It’s now pretty common for top sports teams to measure a specific series of data points for each of their team members. They do this to ensure they invest in the right players from a hiring perspective, through to performance optimisation, risk (injury) management and termination.
This brings me to the third component which drives HR system intelligence – the human factor. While modern HR systems can be set up to provide historic, trending and predictive answers in a quick and consistent way, it takes people to ask the right questions, apply rigorous and causal measurement standards and to interpret the results correctly. System intelligence is far more than a set of logical technology sequences with a sexy user interface; it is a reflection of how the human aspect is applied to data interrogation.
What Moneyball also underscores is the need for absolute focus, commitment and trust in the analysed data. The real-life success of the Oakland Athletics baseball team, which the movie is based around, would not have happened if the right person, who loved and understood the data, was not part of the equation. This is important for HR functional and technology leaders to understand – HR analytics is not an activity you can simply add into your HR generalist’s job description. It’s a contributing factor to why HR departments have not been overly successful with their foray into the world of data analytics.
It’s good to see many HR system vendors actively embracing analytics directly in their HR software. Some provide fairly basic historic and trend analysis through online graphical reporting. Others are providing instant or embedded analytics that display results in a dashboard or by simply hovering your mouse pointer over an icon. More recently, we’re seeing diverse data and complex analysis engines being integrated into HR systems. These offer statistically valid predictions related to employee risk such as likelihood of resignation, best career move and ways to improve engagement.
The provision of complex analytic functionality by HR vendors is important; however, the HR system will not appear intelligent without the right human interest, creativity and skill. As tough as this may sound, your HR system’s perceived intelligence is a reflection of your HR leaderships’ views of data and analytics rather than the system-specific functionality. As we edge towards a completely digital work environment, HR leaders must address their role in future decision making through data intelligence.
HR system intelligence & HR implications
- HR system intelligence relates primarily to its capacity to collect, analyse and represent data in a predictive manner such that it contributes to business and people decision making.
- Just as sports teams have realised the value of people analytics in winning, HR must accept that there is significant business value to be gained by properly analysing HR and related data.
- HR vendors will provide standard analytics in their solutions. These are useful, but should not be confused with the analytics that are unique to your business and HR drivers.
- Data analytics is a specialist role that requires specific skill, a passion for finding answers in complex data and the ability to convey strategic messages from the results.
- There is a direct correlation between your HR system intelligence and the level of interest in data and analytics from your HR leadership.
Rob Scott is global lead: HR strategy & innovation for Presence of IT, a leading consultancy in HR, talent, payroll and workforce management solutions.