Big Data and HR: Why HR Needs to Enter the Game

by Cathy Missildine | Posted | Business Impact

Big Data and HR: Why HR Needs to Enter the Game

Big data is everywhere. For years, big data seemed to be for the data geeks and the super quant jocks, but today it’s used in marketing, customer service, operations and even human resources.

If you haven’t explored the benefits of big data it's definitely time.

“Big data” describes the sheer volume, variety, and velocity of data that resides in most companies. This mega information is difficult to store, search, and analyze, especially with disparate systems and tools. There are challenges, but I feel the rewards far outweigh the hard work involved.

In this two-part series we'll discuss WHY HR needs to enter the big data game and HOW HR can begin playing the big data game.

Why does HR need to leverage big data?

According to Harvard Business review, 71% of CEOs surveyed believe that human capital is the TOP contributing factor to sustainable economic value.

Given the importance of human capital in our economy, HR must enter the big data game in order to make sure organizations remain competitive and that top talent is both acquired and retained.

Big data means big data analytics for HR

When I think of the big data trend in HR I automatically think about human capital analytics.

Big data analytics for HR is the process of looking at big data in search of trends, patterns, correlations and insights about human behavior. The goal is to uncover something that the business didn’t know and to be predictive when it comes to certain HR functions like hiring, training and choosing between HR initiatives.

Not everyone in Human Resources gets as excited as I do when it comes to data and analytics. In fact, some just hope that big data is just a trend that will go away.

I believe the big data trend in HR is here to stay. We're a knowledge-based economy that needs better decision-making capabilities. Big data presents a new set of opportunities for data-driven decisions to be tied to business strategy across the organization.

So let's look at the big data trend in HR.

The demand for insightful data about employees is high

I believe leaders are less risk tolerant than even ten years ago due to the wide spread implications of the recession. CEOs and other leaders no longer base decisions on previous experiences and their gut; leaders now want to see the facts and data that lend support to their particular position.

And often, the data leaders need is either related to customers or employees.

Being able to predict which of your high performers may be at risk for leaving is just one area HR can analyze and bring insight to leaders. By analyzing turnover trends, engagement patterns and performance scores, HR could intervene BEFORE a regretful resignation happens.

There's increasing pressure for a higher ROI on Human Capital

If you think about a service based company’s annual budget, anywhere form 60-80% of that budget is related to human capital related costs. That figure can be daunting depending on company size.

Human capital costs coupled with “have to do more with less” puts pressure on managers to get the most out of the people investment. So I see performance data becoming significantly more important as linking performance to employee costs is one of the best ways to calculate ROI.

In a sales driven organization, this calculation is relatively easy. The calculation gets slightly messy when you are analyzing a manufacturing, non-profit or government agency.

The performance data set can be big data on its own, depending on the number of employees a company has and how many years of performance data exists. I’ve said many times that this is a underutilized data set that has great potential for insight on what drives high performers, what their competencies/behaviors are, and how long you can expect high performance from this group.

It’s all about the talent

In the next five years I strongly believe that HR’s focus must be around talent management. It’s about acquiring the best, retaining the best, recognizing the best and developing all of our talent.

Because these processes are an expensive endeavor, HR must look at talent management in a strategic light. HR needs to understand where the company is headed and what skills and competencies will enable the company to reach its goals.

We need to do better workforce planning

Workforce planning is a major part of the alignment between what the business needs and how HR can supply that need. Big data plays a critical role in the workforce planning area as trends and patterns of employee movement are the basis for forecasting future need. (headcount)

By examining workforce planning information along with current staffing levels, HR can pinpoint critical staffing peaks and adjust recruitment levels accordingly. This process is proactive, but is also a cost savings technique.

The game for big data and HR has started

Not only is data critical on the front end with recruiting, but also during the employee lifecycle. It is so important to use multiple data sets together to determine peak performance and critical competencies.

I recommend analyzing employee performance data, engagement data, productivity data and movement data (promotions, laterals, etc.) to uncover valuable insights about what keeps an employee engaged and productive. Believe it or not, it’s different across organizations and even departments.

The big data game has started, we're in the fourth inning… It’s past time for HR to enter the game. There are so many ways to score a home run with low hanging fruit. Analyzing just the root cause of turnover and how much that costs is one way to start.

In part two we'll discuss how HR can get started and what some common challenges have been. In the meantime, get your calculator and excel spreadsheets it’s time to play big data.

HR's 5 most important roles in managing talent

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HR's 5 most important roles in managing talent

Learn why, as an HR professional, you need to be a business person first and an HR person second.


Watch Now


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