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Does HR Analytics Actually Work?

Is it just a passing fad?

27Jan

Investment in HR analytics has increased significantly over the last five years, with over 60% of companies investing in the space. Because of this, a great divide has emerged between companies that have HR analytics and those who don't.

With analytics within HR picking up steam all the time, there is now a real emphasis on HR managers to become 'data interpreters', with the advantages that come from analytics systems often negated by poor levels of expertise.

The phrase 'All the gear but no idea' has been bandied about as a way of encapsulating the current state of HR analytics. Ron Thomas, Director of Talent at Buck-Consultants states, 'When you think in terms of all the information HR collects in a year, there's enough right there if it's used properly. But the key to analytics is interpretation" . Thomas also goes onto state that 'You can have all the data in the world and still not know how to use it'

Much of the concern around HR analytics is that its existence is to measure meaningless metrics that have little bearing on a company's ability to manage its workforce. Clearly there's a lot to gain from quantitative measurements, but at the same time, this shouldn't be used as an excuse for data scientists to track and measure everything that both their prospective and current employees do. Simply put, deriving a value added from HR analytics is difficult - measuring absenteeism for example is useful, but it doesn't really add anything to the company in terms of value added.

The easy way out for companies is to measure metrics that are concerned with time and cost, not metrics that are concerned with quality of hire. Metrics which are concerned with measuring how people are operating within their role add value to the organisation and should be prioritised.

It's probable that the concept of HR analytics still has an awful long way to go in terms of its development, but with all things Big Data, its potential going into the next five to ten years is likely to astound and worry many of us. 'People analytics', will be based around mapping how we flourish as individuals and in what environments. 'People analytics' is still very much in its infancy, but in the not too distance future companies will be able to decode us on sight.

The question as to whether HR analytics works is something that will be different depending on the company you work for. Those that emphasis the importance of making their HR officers 'data interpreters' will unquestionably benefit. The space will definitely develop over the next decade and it'll be fascinating to see whether we'll become the equivalent of an open-book for organisations. 

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