A leading pharmaceutical company recently became aware of the pitfalls of advertising jobs internally, with male applicants typically exaggerating their skills and experience. Even more concerningly, women whom the recruitment team knew to be well qualified for the roles advertised didn’t bother applying, apparently under the impression that they wouldn’t be considered.
The company’s response to this situation was to partner with a US software provider that specialized in employment analytics. Using the partner’s tools, the organization’s leaders scoured their workforce data, including qualifications and project experience, in order to identify potential candidates in an objective, merit-based fashion. As a result, there was an overdue spike in promotions of women.
This initiative is just one example of how human resources (HR) and learning and development (L&D) teams are using analytics tools to overcome the challenges they face. Indeed, for chief human resources officers (CHROs), embracing data analytics is rapidly becoming mission-critical.
HR has been slower than some other functions to adopt analytics but, as it becomes clear that action is imperative, adoption is accelerating. One recent report predicted the global HR analytics market would be worth $6.3bn by 2030 – representing average annual growth of 12.2% between now and then.
Technology also enables HR to make better-informed decisions about recruitment and organizational structure: which skills will be needed in each function; how to gain access to those skills; and how to build organizations around the talent of tomorrow.
Two areas offer particularly exciting opportunities. Firstly, there is a growing number of powerful analytics tools that enable companies to serve their employees more effectively, from enabling more efficient work patterns to identifying new career-progression opportunities. Secondly, technology also enables HR to make better-informed decisions about recruitment and organizational structure: which skills will be needed in each function; how to gain access to those skills; and how to build organizations around the talent of tomorrow.
Engagement analytics can assist organizations in providing a supportive environment for their employees, in which they can fulfil their potential. Tools that assess workforce sentiment and wellbeing, for example, are already available to some HR departments; However, this is just a taste of the assistance that managers can call upon to improve productivity.
For example, a company that supplies retailers with security guards has used advanced analytics to predict high-risk locations, including the times at which they are most likely to see an incident, and is applying that to its shift-management software. Using this additional data analysis, the company can bolster its numbers when guards are more likely to be put in a dangerous situation. In addition to this, there are more nuanced benefits, such as the ability to adjust shift patterns and staffing levels in consideration of the distance that employees have to travel to work. The result has been improved customer service, but also a boost to staff morale as employees feel they are being looked after. The company has recorded a notable uptick in retention in an industry where churn rates are very high.
Elsewhere, some companies are now experimenting with advances in unstructured data analytics. For example, CCTV data can provide a snapshot of how workers move and collaborate within their workspaces, with the aim of building up a complete picture of the informal internal networks that so often power organizations. The results can also enable interventions where required – to encourage better communication and promote teamwork, for example.
Indeed, analytics often provide the key to unlock learning, development and career progression. Tools that identify the educational and training needs of individual employees can allow organizations quickly to bridge their skills gaps, simultaneously incentivizing loyalty and engagement.
“Analytics often provide the key to unlock learning, development and career progression”
It’s an important point. HR analytics tools are most valuable when they deliver dividends for both employee and employer. Solutions that leave employees feeling more fulfilled and invested in their jobs will drive productivity and reduce staff turnover. Such tools can even identify those members of staff most at risk of leaving and design interventions to support their retention.
In this context, it’s important to sound a note of caution. Employees will likely bridle at the use of technologies that appear to suggest they are not trusted by their employers. For example, organizations that have reinforced the mutual trust in their employee relationships by allowing staff to work remotely will undermine that process if they use technology to monitor work hours and rates of those remote staff, a practice for which some companies have already run into criticism.
Such tools, implemented in the name of monitoring productivity levels, are perceived to be intrusive and suspicious. They appear to deliver asymmetrical benefits, weighted in favor of employers, consequently damaging engagement and, ultimately, leading to increased staff turnover.
As for the second analytics opportunity, the initial challenge is for CHROs and L&D leaders to improve their own understanding of data and analytics. Not only will they be responsible for recruiting and training the next generation of employees, they will need to rethink organizational structure and design.
Small initiatives, while apparently insignificant, can be highly effective. A leading consumer electronics company, for example, now requires every single new employee to undergo induction training on a very basic analytics tool. The aim is to build data and analytics literacy throughout the organization, irrespective of the roles for which the new joiners have been recruited.
The best advice for HR leaders is to start small.
In another case, a pharmaceuticals company was confused and disappointed by the wildly differing results it achieved from an analytics tool that offered suggestions as to what action a salesperson should take next following a specific customer interaction. In one market, the technology drove up revenues; in another, it was a complete flop. Investigating these results with staff in the latter group, the L&D team realized that the sales team, feeling threatened by the technology, were feeding it inaccurate data – or, at times, no data at all. L&D leaders built a program to demystify the technology, enabling staff to understand how it would increase their sales and give them more job security rather than less.
Elsewhere, HR leaders are using analytics tools to work out how to deploy staff with technology skills to maximum effect. In the past, the tendency has been to locate data and analytics expertise in the IT department. When such expertise is deployed and embedded across the business, in areas where it can have influence, it can deliver even more impressive results.
The best advice for HR leaders is to start small. Modest internal projects with crystal-clear objectives provide an opportunity to experiment and learn in a safe space. As the organization’s experience and understanding of what is possible grow, it can begin to plan more ambitious initiatives with confidence. Inevitably, CHROs will look to their IT colleagues to manage the integration of these technologies but, as HR becomes more confident in their use, the deployment should become more of a cross-functional collaboration.
In practice, however, data analytics skills are in short supply. Indeed, developing them may require HR leaders to think more imaginatively about recruitment and training programs. For example, somewhat counterintuitively, the data indicates that History and Philosophy majors are particularly quick to acquire data skills, suggesting that a technical IT background may not be an indispensable prerequisite.
By building competency to support analytics in both HR and throughout the wider business, organizations can drive significant value.
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