Everyone knows that functions such as Finance, Operations and Marketing have adapted well to the new data driven environment.
Most people believe that HR has the potential to be data driven as well.
But it is not quite there.
About a decade ago HR functions started dabbling with analytics. It was mostly reporting on productivity, level of employee engagement, motivation, compensation and performance.
Very little predictive analytics was being used. Few companies had a dedicated analytics person.
A survey was done recently under the supervision of Dr. Thomas Davenport, a research Fellow at the MIT Initiative on Digital Economy and a senior advisor at Deloitte Analytics.
It covered 1500 respondents in 23 countries across five continents.
The survey made a rather counter intuitive discovery. The respondents were typically senior executives like directors and vice presidents. The companies had revenues in excess of $100 Mn.
The survey revealed that:
- Most companies had at-least a small group of dedicated analytics persons to handle HR Analytics.
- Over half the HR respondents said they could do predictive analytics. Only about a third of the Finance professionals said they could.
- Almost 95% were able to predict the likelihood of turnover in critical roles with a high degree of confidence.
- Almost 95% said they have a good insight into the career goals of employees.
- Almost a third were using Artificial Intelligence.
- The Analytics Applications addressed the HR Manager’s most pressing concerns. The applications were AI assisted tasks performed by the majority of respondents such as:
- At Risk Talent through Attrition Modelling
- Predicting which candidates would do well
- Sourcing best fit candidates by analyzing resumes
- The industries where the use of HR Analytics was most pronounced were Financial Services, Energy and Utilities, Professional services and Wholesale distribution.
- Typically analytics awareness was comparatively low in Asian and European companies.
- In an overall sense, the HR function seems to be ahead of the Finance function in the use of predictive analytics.
What is the way forward? It appears while capabilities are being built to predict future occurrences, the ability to interpret findings and to act on them is not adequately in place.
When queried, most respondents agreed that
- There was a need to improve.
- There was a need to develop quantitative analysis and reasoning capabilities.
- Business Leaders needed to be explained scenarios emerging from the data.
HR Managers are up against a challenge they never tire of advising other functions to guard against. Build depth of talent. It will be in short supply.
The leadership in the HR Function is keen to do more and is finding that the talent is in short supply.
A lesson for those looking for careers in Analytics.
Look beyond Finance, Marketing and Operations if you want to build a career in Analytics.