Has digital HR come of age?

HR analytics is moving into the mainstream, though it takes more than just technology to realise its full potential.

Digital technology is transforming customer profiling, product development and distribution. A survey of more than a thousand business leaders carried out by PwC found that over 70% believe that digital technologies can help them to enhance innovation, customer experience and operational efficiency.

Yet despite sitting on a wealth of data, HR has been slow to move up the digital curve. The PwC CEO survey found that less than half are making major use of data analytics to provide better insights into how effectively skills are being deployed within their organisation, for example. Of these, most were large corporations. The only sector where more than 60% of survey participants are making extensive use of it is telecommunications.

We may have reached the tipping point, however. HR analytics software is coming down in price and getting easier to use, bringing it on to the radar of even relatively small companies. A lot of the programmes come with snappy visualisation, helping analysts to convey the results in appealing and accessible ways. The growing use of software as a service (SAAS) and cloud-based platforms can not only boost data capture and storage capacity, but also pave the way for cheaper, more frequent and less operationally disruptive implementation and updates – typically four months for the change-over. The other big change is that many boards are coming to recognise the importance of sharper and more forward-looking workforce planning and performance management as the job market and wider economy evolve, which is making it easier to make the business case for investment. Predictive analytics can not only anticipate what people will be needed to meet future business objectives, but also judge how they will perform and interact. Among the questions that can now be answered are what kind of people would be most compatible and what customised training would help an employee develop into a star performer.

So how can you make the most of the digital potential? The right fit for your organisation: there is growing choice on the market, especially now big enterprise resource planning (ERP) vendors are looking to build HR analytics into their capabilities. It’s important to weigh up the advantages of integrating HR analytics with other business systems against the flexibility and easier updates that come with standalone capabilities.

Clean up the data feeds: the choice of technology is just the start. Analytics are only as good as the data that feeds them – rubbish in will generate rubbish out. To be effective, HR analytics is most valuable when it’s aligned with an overhaul of data sourcing. Key issues to overcome include inconsistent data feeds and extracting the data locked up in siloes within the organisation. Make it easier to contribute: self-service capabilities are crucial in encouraging business teams to supply the necessary data in return for taking some of the burden off HR in areas such as information updates, holiday requests etc. Enabling staff around the organisation to interact on their mobiles would make it easier for them to supply HR with the information it needs and for them to get what they want in areas such as information on pay, vacancies, etc. Turn data into genuine insights: key challenges include ensuring HR teams have the skills and culture to support effective analytics. It’s also important to ensure that analytics provide actionable insights and solutions, rather than just reams of superfluous and probably unread data.