How Analytics Is Reinvigorating HR

We spoke to Edward Houghton, Senior Research Advisor for Human Capital and Governance for CIPD, about the potential being unlocked by analytics for HR professionals

26Mar

HR departments are generally among the more underutilized. Employees and managers alike often see HR as the resident spoil-sports, the ones brought in when someone has done something wrong. Yet, HR is essential to every company because their focus is on the employees, and people make the companies they work for.

However, the rise of big data is enabling more companies to realize HR's potential. Issues like job satisfaction, recruitment, and retainment are being re-envisioned in new, more effective ways, and HR professionals are providing added value to the lives of both leaders and staff. In an effort to explore this further, we sat down with Edward Houghton, Senior Research Advisor for Human Capital and Governance for CIPD, a professional body for HR and people development, at one of our HR & Workforce Analytics Innovation Summits.

What benefits do you see a greater focus on data having specifically on human resource departments?

I think it's all about being evidence-based. HR departments have traditionally been about judgment and professional understanding and less about evidence around data. There's a great opportunity in the profession to think about analytics as a way of bringing more evidence into the profession in order to help us to make better, evidence-based decisions. To be really critical of the work that we do and to help organizations to think about performance and productivity through the lens of evidence. That allows us to use our professional skills and capability more effectively and talk about what makes organizations work better from a place of evidence.

But people are so complex. In terms of hard evidence regarding why people make certain decisions and take certain career paths, is it difficult to actually draw insights from people data?

It just means that people data is as complex as people are. The way people behave as individuals or in groups within organizations is very hard to measure. However, there are ways you can do it through different types of technology and analytics. Over time, as we've started to use analytics in organizations, we've become more aware of how to do this in a really robust way.

One good way to look at performance, for example, is through people and their relationships. Along with quantifying these relationships, we also have to think about the quality of those relationships too, and this is an area where analytics can really help.

Do you feel like HR is still behind other departments when it comes to implementing data initiatives? Because it's difficult to take personal data as a lot of employees might find it invasive, especially when you start branching into areas like biometric data. How do you think they can catch up?

It's all about asking senior leaders to invest time, energy, and resources into doing analytics. They are the ones who need to make the case to the people about how the data will connect to things like organizational performance or effectiveness areas around engagement and well-being. These are all really important because they help us to articulate what and how people add value to the business. We can invest a lot of time and energy in doing this because there are now senior groups of leaders out there who are interested in reaching the next level of competitive advantage. Once you start looking more closely and frequently at what makes an organization effective, you often find it's the people. This means that we have to collect even more data and do more analysis on what makes organizations work really well, and looking into people is a really interesting way of doing that.

Obviously, the whole debate around data protection is huge and we also need to invest time to understand that more clearly, otherwise we can get ourselves into all sorts of big issues. Most organizations aren't at that point yet because it requires a laser focus on how you understand data and how it interacts with organizations. But being clear on what your purpose for doing analytics is can help you overcome that barrier.

What do you see to be the most important metrics when gauging employee engagement satisfaction?

There are loads of measures you can use to understand employee satisfaction levels. For example, asking employees whether they would recommend their workplace as a place to work is a really interesting way of looking at employee satisfaction. You can now also get a lot of this kind of data from external sources, such as online recruitment services. They offer transparent reviews by individuals who previously, currently or, are in the recruitment process to join a company.

Understanding whether employees are satisfied has moved beyond simply asking if they are happy or not. It now also involves looking at all sorts of other data around the system which might indicate satisfaction. Think about it, most people don't leave a workplace, they leave their manager. Hence, thinking about what makes people want to stay in work and looking at data around the manager-employee relationship, can help you gain deeper understanding around satisfaction.

What technology do you see having an impact on HR in the near future?

There's going to be a lot of growth in areas like biometrics and using wearable technology. I also think that's going to be a huge area of risk and we're going to need a lot of forethought with regards to the way we implement those kinds of technologies. There's an ethical issue around how we collect data and use data, and whether it's even ethical to impose that type of technology on workers in the first place.

These are huge decisions within the workforce and a boundary will need to be set to make sure everyone is happy with the kind of data being used. However, as you know, many employees are on social media where they share their personal data all the time. It's all about consent essentially, whether you consent to it and whether you know how your data is being used.

The other area that's going to be a huge opportunity to understand performance is through Fitness measures like Fitbits. However, we also have to approach this with an ethical mindset, we have to challenge some of the decisions we make as they may contravene our ideas around what makes people happy at work. It might be that we don't give everybody a Fitbit because that may be countering some other parts of well-being for those individuals. We have to be really clear about how and when we use these types of technology.

Do you personally think employees will buy into wearing this sort of tech? In principle, I'm not sure how comfortable I would be with a company I worked for measuring my biometrics...

It's interesting, I think you see large growth in certain types of technology being used by certain types of organizations. For knowledge-based organizations like professional service firms, where it's all about performance and quantifying performance, it's just another level of performance measurement. For some individuals, their natural predilection for fitness and health also makes them open to it. There are certain cultures of organizations where these wearable technologies can really work. However, there are organizations where this just wouldn't fly, so the main thing is that we have a discussion with workers about what the consequences are and who owns the data.

it's really crucial that organizations are upfront about these kinds of technology. Many of these ideas have been around since the dawn of the mobile phones. We all carry a work mobile around with us so there are issues around data that have been overcome. I think with this kind of technology, it can also be overcome, but it's different because we're talking about biometrics; measuring heart rates, location, etc. There simply are big areas of the debate which we just don't have an answer to yet.

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