Why Don't More HR Strategies Use Data?

Despite data becoming central to companies today, the HR department needs to catch up


HR departments have a reputation as laggards when it comes to implementing new technologies, and it appears that data analytics is no exception. According to PwC US’s latest Annual HR Technology Survey, produced in conjunction with Oxford Economics, just 40% of US organizations have an HR analytics strategy in place. This means that almost two-thirds of companies are missing out on the benefits to hiring and retaining employees that looking at the data can bring.

The nature of employment is changing, and HR departments are faced with a number of challenges. For one, millennials are now entering the workforce in their droves, and they have vastly different expectations of what they want from a career compared with Gen Xers and Baby Boomers. To recruit and retain the best of these, HR professionals need to understand what they want and how they can meet it, and identify indicators that someone may be considering leaving their role. In terms of recruitment, many industries are also facing a severe skills gap among candidates, and identifying the candidate who would do the best job - perhaps in spite of appearances - is vital to a firm’s continued success. HR professionals not looking at the wealth of data they now have available to them, and the predictive analytics tools to make sense of it and generate actionable insights, are missing out on a valuable resource that can help them understand and meet these challenges.

But what are the reasons behind the sluggish uptake?

Many cite a lack of analytical capability among HR staffers. According to a Pulse survey conducted by Harvard Business Review, HR departments often lack the analytics skills necessary to convert the data into anything useful. Josh Bersin, president and CEO of Oakland, Calif.-based consultancy Bersin and Associates, agrees, noting that ‘HR teams are not very analytical in their thinking yet. That is holding them back from doing more data-driven decision making.’

HR professionals are used to thinking in terms of intangibles. People are not numbers, and finding the best fit often comes down to intuition and gut instinct. However, people can be broken down into numbers, and HR need to start seeing the value in doing this, no matter how distasteful it may be. Many are, perhaps, reluctant to change their way of thinking for fear that it will render their skill set irrelevant, but this is not the case, as to best understand data, you need good knowledge of the area in the first place.

Of course, there are many in HR who are perfectly capable of making sense of the data, and it may actually be a common prejudice that they can’t, as Bersin demonstrates, that’s holding them back. Those in the top tier leadership positions, particularly those in the finance function, often see HR as a bit of a foot note, both of which may be contributing to the impression that spending money on HR tools will be wasted. Predictive analytics tools require investments of both time and money, and perhaps the biggest problem is that not enough in the C-suite see the value in HR - value that is ironically best demonstrated to them by looking at the data.

The rise in the use of analytics is one of the top 10 trends in human resources, according to the report, Global Human Capital Trends 2016, produced by Deloitte Consulting and Bersin by Deloitte. Change is coming, but not at the pace that many would like. Whether it comes down to HR departments ‘borrowing’ experience in data from other departments to come in and help ease the transition, or whether it’s that budgets need to increase and HR departments need to force management to see that they need the tools, something needs to change.

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