HR already sits on a lot of employee and business data, but it is the growth of this data that will present both the real challenge and the real opportunity for HR and the wider business.
This is according to Matthew Hanwell, HR technology, collaboration and social media professional at HR software provider NorthgateArinso, who opened the HR Tech Europe Spring Warm-Up in London in March.
With 1.8 zettabytes - that's 1.8 trillion gigabytes - of data being produced each year, HR teams need to understand the scale of the data being produced, as well as the speed at which it is being created and the range of data points from which that data will come. This point was echoed by HR technology consultant John Sumser, who said the doubling of data each year is a game changer for HR.
|Quotes from the HR Tech Europe conference|
| "HR systems need to be usable, single instance, object oriented, SaaS systems in the cloud. Not legacy databases."|
Mark Martin, group HR director, Direct Line Group
"Predictive analytics will be hugely important for HR to predict development needs, attrition rates and target resources to proactively intervene before we have a problem."
Matthew Hanwell, HR technology, collaboration and social media professional, NorthgateArinso
"You need to know what to measure - what will drive competitive advantage. Measure what you are trying to do and measure what you want to be great at."
Jason Averbrook, chief innovation officer, Appirio
"In the people analytics team we have researchers, HR experts and data analysts. We are all data geeks."
Caitlin Hogan, people analyst, Google
"There is no value in data and facts. By processing data you can attach meaning and by adding contextual information and experience you turn it into knowledge. You can use that knowledge to solve problems."
Morten Kamp Andersen, chief executive, Aspector
"We need to refine, process and interpret the data and decide what's relevant for the business. The tools are there to do this, and on a massive scale. But the processing is beyond the Excel spreadsheet, which is the old way of looking at HR data. Think of data as more of an MRI scan, which is multi-dimensional," Hanwell, previously HR director at Nokia, told delegates.
The old ways of looking at data need to be left behind, such as aggregating data. Hanwell gave the example of the pitfalls of aggregating employee data. A company that had a 5.2% global employee attrition rate thought this was an acceptable rate and so felt no need to act on it. However, on further analysis the aggregated data hid a 40% attrition rate in one part of the company and a 0.02% attrition rate in another part of the business.
Hanwell said this situation was "like having one hand in the oven and the other in the freezer while the rest of the body feels fine". HR needs to seek out insights from the data, he said.
This point was echoed by Mark Martin, group HR director at Direct Line Group, who said that collecting the right data will enable managers to run the business more effectively. He outlined two roles for HR in the digital age: "The first will be to enable managers to manage the capability and engagement of their people. The second will be strategic risk management, ensuring there is the right capability and engagement to deliver the business strategy.
"The business will demand simple, usable systems so mangers have the data they need. Once they have that the data, they can manage the business more effectively."
How Google measures and tracks data effectively
One employer who puts data at the heart of what they do is technology giant Google. People analyst Caitlin Hogan told delegates that all people decisions at Google are based on data and analytics. Google measures and tracks everything, she said.
She shared how Google develops managers using data. The company started by testing the assumption that managers help improve performance; it took a top-down and bottom-up approach by analysing performance scores of managers and team scores on annual employee surveys.
At a first glance, 75% of managers were performing well. But after splitting out the top and bottom quartile of performers it became clear that the top performing managers had higher performing teams.
Google then carried out a qualitative analysis of managers that looked at:
- what team members thought of their managers;
- the annual review;
- manager reviews in appraisals; and
- double blind interviews of managers.
As well as being able to identify managers who are doing well, Google is now better able to find those who are not doing so well, support them more and identify those people who are not suitable for management. Hogan said it can be difficult to link this activity to business impact adding that it is easier in a sales environment but harder across engineering disciplines.
Many speakers cautioned against seeing technology as the saviour for HR teams looking to capitalise on big data. Big data represents a fundamental shift, according to Jason Averbrook, chief innovation officer at cloud services provider Appirio: "HR has to reimagine the function then think about big data. It has to move from counting heads to making heads count."
Jeremy Shapiro, executive director at Morgan Stanley, agreed: "HR is changing from gut-based decision makers to data-based decision makers. How many of HR people have joined because they love maths?"
This sentiment was supported by Nick Holley, director of the Henley Business School's Centre for HR Excellence: "Big data provides the greatest opportunity HR has had in years to become relevant by using the data to provide insights that make a difference to the business.
"Big data is also the biggest single threat to individuals in the function because a lot of HR people base their success on gut feeling and intuition and relationships, and actually proper data analytics can make that irrelevant."