There are three common challenges for HR in people analytics, according to an expert in the space, who said HR needs to think outside the functional box in order to get the most benefit out of any people analytics strategy.
The first and most common people analytics issue is thinking narrowly about HR and constraining it to a set of largely fixed processes that run in response to a calendar or in response to problems, said Peter O’Hanlon, founder and managing director of Lever Analytics.
“Most HR leaders are keen to drive the organisation and be an important voice at the table, and thinking broadly and creatively about how to leverage data to drive the people function for better business outcomes can really help break out,” he said.
The second challenge is a perceived technology and data barrier.
“People have been burned by big expensive IT projects and there is an incorrect assumption in some quarters that you need to spend big to get started,” said O’Hanlon, who was speaking ahead of People Analytics & the Future of Talent 2017, which will be held in Sydney from 17-18 October 2017.
“This needs to be turned upside down so that by the time you do spend, you’ve done as much as you can with what you’ve got and that informs what you spend on; it’s probably not a single big HR system.”
O’Hanlon also said it is critical to find the people who can combine the people understanding with data and analytics skills.
“Often these skill sets sit inside different brains, so finding people with both capabilities in the one skill is unfortunately harder than it should be – but thankfully that’s changing,” said O’Hanlon, who also serves as a board member of the Institute of Analytics Professionals.
“People have been burned by big expensive IT projects and there is an incorrect assumption in some quarters that you need to spend big to get started”
O’Hanlon observed that most large Australian businesses are starting to think through how they might use data more effectively to enhance both their people strategy and operations. “It’s been bubbling away as an interesting idea for a few years, with some very interesting applications emerging – mostly from the larger more digitally minded businesses,” said O’Hanlon.
“And most other parts of businesses have had some degree of data-first digital transformation.”
Because a workforce is the biggest cost in most businesses, O’Hanlon said it’s now making sense to look more deeply at how to better harness this investment.
“It’s fair to say though that at this stage most businesses still know more about their customers than their people, but that will change quickly with a surge in interest in people analytics,” he said.
Starting the people analytics journey
With many organisations starting to think about people analytics, O’Hanlon explained that starting small is usually the best approach.
“I’m a fan of agile methods and having inexpensive and short bursts of activity that are driven by business needs reduces the chance of people analytics projects failing to deliver,” he said.
“Some of my clients have picked a significant business problem for them such as workplace stress, transformation, meeting productivity or leadership.
“They’ve run a short exercise using data that is readily available and not necessarily from their HR systems to see what they can find and performed a few iterations, until they have a way of providing new value in the form of savings or unlocking productivity into their organisation.”
“It’s fair to say though that at this stage most businesses still know more about their customers than their people”
After picking a problem that is tangible and meaningful (and these are usually meaningful because they are part of someone’s KPIs) O’Hanlon recommended including the person or people who should benefit to guide the activity.
“In picking the problem you should involve those that will be involved in the analysis process, as they will help you pick a topic that’s likely to succeed in a reasonable time,” he said.
“Then you’ll want to mobilise people that look after the systems or data that you’ll need access to.
“These are important people as they can block or enable your objectives, and if you find something very useful it will likely be them that will need to make and look after any system changes that you need down the track.
“Typically what I see is that most businesses have the necessary technology already under their roof, but it’s a question of brokering the discussion across the various parties to get agreement about what’s going to happen.”
O’Hanlon suggested partnering with another analytical team within the organisation which can offer some support.
“Finally, it’s setting up a process that will allow that group of people to work together or stay in touch while the analysis is conducted so there are no surprises at the end,” he said.
People analytics and value for HR
Using people analytics provides value via improvements to a number of existing HR functions, O’Hanlon explained.
For example, hiring efficiently and well has been firmly in the sights of people analytics people for years, he said.
And using social data to attract and search, quantify employee fit, and run efficient recruitment processes have all been digitised in one form or another for most businesses now. “But where I think the real value is in business transformation and boosting productivity,” said O’Hanlon.
“Where I think the real value is in business transformation and boosting productivity”
There is also a move toward quantifying and changing culture to prevent corporate misconduct, build teamwork and highlight operational deficiencies and drag, and O’Hanlon said that combining different sources of data like feedback, performance and organisational networks shines a light on ways to look after the top and bottom lines of a business.
“It’s also interesting to see businesses now tackling questions that have been historically very difficult and measuring the change brought about by learning and development activities and adjusting their spend to focus on areas that tangibly provide better results,” he said.
“I think that is starting to change how businesses run L&D.”
Some organisations are actively looking at creating a centralised analytics function, and O’Hanlon said that there is often benefit in this – mostly derived from cost savings from sharing.
“The other main benefit that I’m seeing more now is that data governance can operate more effectively if done once at an enterprise level,” he said.
However, O’Hanlon observed there are some serious downsides to centralised analytics functions that are worth considering.
These include a separation between analytics and the ownership of some business outcome. “It’s hard for an internal service provider to look after a customer (such as HR or risk or marketing) the way that customer could look after itself, if it had its own capability,” he said.
“Generally there is some hybrid model in larger organisations with a community of practice operating across teams, but some deep tech, data management, and investment decisions being made centrally.
“It depends on a few things like how big an organisation is, how diverse its data holdings are, and how mature it is with analytics,” said O’Hanlon.
People Analytics & the Future of Talent 2017 will be held in Sydney from 17-18 October 2017 at Amora Hotel Jamison Sydney. For more information visit the website and register with the code INSIDEHR to save 10 per cent. Image source: iStock