The big data wave has been crashing on the shores of the business and media worlds for years, and now it has reached the shores of HR. Instead of stepping in, it seems that HR practitioners are getting cold feet and moving further up the beach, leaving big data to the tech and data folks. The problem is that the beach is running out, and it’s actually HR’s problem to solve.
CEOs are starting to call time on the lack of big data in HR, as evidenced by this revealing study by KPMG, which found that 85 percent of those surveyed believe that HR teams “fail to provide insightful analytics,” which creates a lack of trust.
According to Dave Ulrich, in his State of the HR Profession research paper, this lack of informed, data-backed insight has been hampering HR’s attempts to enter the boardroom and be seen as a credible high-level business partner. It limits HR influence, as shown by this Bersin paper, which suggests that HR teams are, “4 times more likely to be respected by business counterparts” if they use data-driven decision making.
Of course, many of the HR professionals who provide some data analytics may see this as an unfair judgement, but the research didn’t say there weren’t any analytics produced — it’s just that they aren’t compelling enough. In what way weren’t they compelling enough? What type of analytics does HR need to produce?
Dave Ulrich gives some insight into the kind of data that HR needs to be producing in The State of the HR Profession. He asserts that, if HR wants to be taken seriously, it needs to start developing insights and decision based on global data (big data), and not on personal perceptions and hunches, as it currently does.
More detailed insight into the type of data that CEOs want from HR can be found in this research piece, Big Data In Human Resources,: A World of Haves and Have-Nots. It seems that the majority of HR professionals are stuck in “level 1: reactive-operational reporting.” This means the profession is already behind the curve, as CEOs want more than this as of today.
At the very least, CEOs want level 2: proactive-advanced reporting,” which includes digital dashboards, multi-dimensional analysis, and operational reports for decision-making and benchmarking. Doing this puts you just ahead of the curve, as just 30 percent of HR practitioners deliver this. This level is the minimum you’ll need to be producing to be taken seriously.
For an HR practitioner to get ahead of the curve, they’ll need to be producing “level 3 and 4 strategic and predictive analytics,” which just 14 percent of HR practitioners do. This includes things like segmentation, “people models,” predictive models, scenario planning, and risk analysis and mitigation. This is the kind of data-backed insight and decision-making that will really create waves — if not tsunamis — in the boardroom.
This is heavy stuff that might make the level 1 HR professional want to roll over and go to back to sleep. Of course, that would be disastrous, as all the research suggests that it is the profession’s failure to move to the upper levels of data-based decision-making that is holding the profession back. And only when HR fully embraces big data will it be able to not just hold, but command, a seat in the boardroom.